DEUTSCHE MORTGAGE SECURITIES, INC.

                                    Depositor

                                       and

                             WELLS FARGO BANK, N.A.

                  Master Servicer and Securities Administrator

                                       and

                                  HSBC BANK USA

                                     Trustee

                              ---------------------

                         POOLING AND SERVICING AGREEMENT

                            Dated as of April 1, 2004

                              ---------------------

                       Mortgage Pass-Through Certificates

                                  Series 2004-3






<PAGE>

<TABLE>
<CAPTION>



                                TABLE OF CONTENTS

                                    ARTICLE I
                                   DEFINITIONS


<S>   <C>                                                                                                       <C>
      Section 1.1    DEFINITIONS..................................................................................6

      Section 1.2    ALLOCATION OF CERTAIN INTEREST SHORTFALL....................................................56

                                   ARTICLE II
           CONVEYANCE OF TRUST FUND; ORIGINAL ISSUANCE OF CERTIFICATES


      Section 2.1    CONVEYANCE OF TRUST FUND....................................................................59

      Section 2.2    ACCEPTANCE BY TRUSTEE.......................................................................59

      Section 2.3    REPURCHASE OR SUBSTITUTION OF LOANS.........................................................59

      Section 2.4    AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF CERTIFICATES AS REMIC REGULAR
                     AND RESIDUAL INTERESTS......................................................................62

      Section 2.5    REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER.......................................62

      Section 2.6    ESTABLISHMENT OF THE TRUST..................................................................64

                                   ARTICLE III
               ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS


      Section 3.1    MASTER SERVICER.............................................................................65

      Section 3.2    REMIC-RELATED COVENANTS.....................................................................66

      Section 3.3    MONITORING OF SERVICERS.....................................................................66

      Section 3.4    FIDELITY BOND...............................................................................67

      Section 3.5    POWER TO ACT; PROCEDURES....................................................................67

      Section 3.6    DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS..................................................68

      Section 3.7    RELEASE OF MORTGAGE FILES...................................................................69

      Section 3.8    DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER TO BE HELD FOR TRUSTEE........69

      Section 3.9    STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES......................................70

      Section 3.10   PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS............................................71

      Section 3.11   MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES......................................71

      Section 3.12   TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS....................71

      Section 3.13   REALIZATION UPON DEFAULTED LOANS............................................................72

      Section 3.14   COMPENSATION FOR THE MASTER SERVICER........................................................72

      Section 3.15   REO PROPERTY................................................................................72

      Section 3.16   ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE...............................................73

      Section 3.17   ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT............................................74
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<CAPTION>

<S>                  <C>
      Section 3.18   REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.......................................74

      Section 3.19   UCC.........................................................................................75

      Section 3.20   OBLIGATION OF THE MASTER SERVICER IN RESPECT OF COMPENSATING INTEREST.......................75

      Section 3.21   RESERVED....................................................................................75

      Section 3.22   PROTECTED ACCOUNTS..........................................................................75

      Section 3.23   DISTRIBUTION ACCOUNTS.......................................................................77

      Section 3.24   PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNTS..........................78

      Section 3.25   RESERVE FUNDS...............................................................................80

      Section 3.26   PREPAYMENT PENALTY VERIFICATION.............................................................81

                                                   ARTICLE IV
                         PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES; STATEMENTS AND REPORTS


      Section 4.1    DISTRIBUTIONS TO GROUP I CERTIFICATEHOLDERS.................................................83

      Section 4.2    ALLOCATION OF REALIZED LOSSES ON THE GROUP I LOANS..........................................89

      Section 4.3    DISTRIBUTIONS TO GROUP II CERTIFICATEHOLDERS................................................91

      Section 4.4    ALLOCATION OF REALIZED LOSSES ON THE GROUP II LOANS.........................................96

      Section 4.5    EFFECT OF DISTRIBUTIONS AND REALIZED LOSSES; FINAL DISTRIBUTIONS ON CERTIFICATES............98

      Section 4.6    STATEMENTS TO CERTIFICATEHOLDERS............................................................99

      Section 4.7    ADVANCES...................................................................................104

      Section 4.8    COMPLIANCE WITH WITHHOLDING REQUIREMENTS...................................................105

      Section 4.9    REMIC DISTRIBUTIONS........................................................................105

                                    ARTICLE V
                                THE CERTIFICATES


      Section 5.1    THE CERTIFICATES...........................................................................111

      Section 5.2    CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF PRINCIPAL AND INTEREST; AUTHORIZED
                     DENOMINATIONS..............................................................................111

      Section 5.3    REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES......................................112

      Section 5.4    MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES..........................................117

      Section 5.5    PERSONS DEEMED OWNERS......................................................................117

                                             ARTICLE VI
                            THE DEPOSITOR, MASTER SERVICER AND THE CREDIT RISK MANAGER


      Section 6.1    LIABILITY OF THE DEPOSITOR AND THE MASTER SERVICER.........................................118

      Section 6.2    MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER SERVICER............................118

      Section 6.3    LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER SERVICER, THE SERVICERS, THE SECURITIES
                     ADMINISTRATOR AND OTHERS...................................................................118
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<CAPTION>

<S>                  <C>
      Section 6.4    LIMITATION ON RESIGNATION OF THE MASTER SERVICER...........................................119

      Section 6.5    ASSIGNMENT OF MASTER SERVICING.............................................................119

      Section 6.6    RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER..................................120

      Section 6.7    DUTIES OF THE CREDIT RISK MANAGER..........................................................120

      Section 6.8    LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.......................................121

      Section 6.9    REMOVAL OF THE CREDIT RISK MANAGER.........................................................121

                                   ARTICLE VII
                                     DEFAULT


      Section 7.1    MASTER SERVICER EVENTS OF DEFAULT..........................................................122

      Section 7.2    TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR...................................................123

      Section 7.3    NOTIFICATION TO CERTIFICATEHOLDERS.........................................................124

      Section 7.4    WAIVER OF MASTER SERVICER EVENTS OF DEFAULT................................................125

                                  ARTICLE VIII
             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR


      Section 8.1    DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.............................................126

      Section 8.2    CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES ADMINISTRATOR.............................127

      Section 8.3    TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR CERTIFICATES OR LOANS..................129

      Section 8.4    TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES.................129

      Section 8.5    FEES AND EXPENSES OF TRUSTEE AND SECURITIES ADMINISTRATOR..................................129

      Section 8.6    ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES ADMINISTRATOR..........................130

      Section 8.7    RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES ADMINISTRATOR............................130

      Section 8.8    SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR..............................................131

      Section 8.9    MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES ADMINISTRATOR.............................132

      Section 8.10   APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE..............................................132

      Section 8.11   APPOINTMENT OF OFFICE OR AGENCY............................................................133

      Section 8.12   REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE..............................................133

                                   ARTICLE IX
                                   TERMINATION


      Section 9.1    TERMINATION UPON PURCHASE OR LIQUIDATION OF LOANS..........................................135

      Section 9.2    ADDITIONAL TERMINATION REQUIREMENTS........................................................137

                                    ARTICLE X
                                REMIC PROVISIONS
</TABLE>


                                      -iii-

<PAGE>


<TABLE>
<CAPTION>

<S>                  <C>
      Section 10.1   REMIC ADMINISTRATION.......................................................................139

      Section 10.2   PROHIBITED TRANSACTIONS AND ACTIVITIES.....................................................141

      Section 10.3   INDEMNIFICATION............................................................................142

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS


      Section 11.1   AMENDMENT..................................................................................143

      Section 11.2   RECORDATION OF AGREEMENT; COUNTERPARTS.....................................................144

      Section 11.3   LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.................................................144

      Section 11.4   GOVERNING LAW..............................................................................145

      Section 11.5   NOTICES....................................................................................145

      Section 11.6   SEVERABILITY OF PROVISIONS.................................................................146

      Section 11.7   NOTICE TO RATING AGENCIES..................................................................146

      Section 11.8   ARTICLE AND SECTION REFERENCES.............................................................147

      Section 11.9   GRANT OF SECURITY INTEREST.................................................................147

                                   ARTICLE XII
                         CERTAIN MATTERS REGARDING AMBAC


      Section 12.1   RIGHTS OF AMBAC TO EXERCISE RIGHTS OF INSURED CERTIFICATEHOLDERS...........................148

      Section 12.2   CLAIMS UPON THE POLICY; INSURANCE ACCOUNT..................................................148

      Section 12.3   EFFECT  OF PAYMENTS BY THE INSURER; SUBROGATION............................................149

      Section 12.4   NOTICES AND INFORMATION TO AMBAC...........................................................149

      Section 12.5   TRUSTEE TO HOLD POLICY.....................................................................150

      Section 12.6   PAYMENT OF INSURANCE PREMIUM...............................................................150
</TABLE>




                                      -iv-

<PAGE>


<TABLE>
<CAPTION>


                                    EXHIBITS

<S>                  <C>   <C>
Exhibit A-1          -     Forms of Class A Certificates (other than the Class I-A-IO Certificates)
Exhibit A-2          -     Forms of Class I-A-IO Certificates
Exhibit A-3          -     Forms of Class M Certificates
Exhibit A-4          -     Forms of Class CE Certificates
Exhibit A-5          -     Forms of Class P Certificates
Exhibit A-6          -     Forms of Class R Certificates
Exhibit  B           -     [Reserved]
Exhibit C            -     Form of Transfer Affidavit
Exhibit D            -     Form of Transferor Certificate
Exhibit E            -     Form of Investment Letter (Non-Rule 144A)
Exhibit F            -     Form of Rule 144A Investment Letter
Exhibit G            -     Form of Benefit Plan Affidavit
Exhibit H                  Policy
Schedule One         -     Loan Schedule
Schedule Two         -     Prepayment Charge Schedule


</TABLE>

                                      -v-
<PAGE>




         This Pooling and Servicing Agreement, dated and effective as of April
1, 2004 (this "Agreement"), is executed by and among Deutsche Mortgage
Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N. A., as
master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), and HSBC Bank USA, as trustee (the "Trustee").
Capitalized terms used in this Agreement and not otherwise defined have the
meanings ascribed to such terms in Article I hereof.

                              PRELIMINARY STATEMENT

         The Depositor at the Closing Date is the owner of the Loans and the
other property being conveyed by it to the Trustee for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from the
Trust Fund as consideration for its transfer to the Trust Fund of the Loans and
certain other assets, and will be the owner of the Certificates. The Depositor
has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Trustee of the Loans and the issuance to the Depositor of
the Certificates representing in the aggregate the entire beneficial ownership
of the Trust Fund. All covenants and agreements made by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee herein with
respect to the Loans and the other property constituting the Trust Fund are for
the benefit of the Holders from time to time of the Certificates. The Depositor,
the Master Servicer the Securities Administrator and the Trustee are entering
into this Agreement, and the Trustee is accepting the trust created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.

         The Certificates issued hereunder, other than the Class CE, Class P and
Class R Certificates, have been offered for sale pursuant to a Prospectus, dated
January 28, 2004, and a Prospectus Supplement, dated April 22, 2004 of the
Depositor (together, the "Prospectus"). The Trust Fund created hereunder is
intended to be the "Trust" as described in the Prospectus and the Certificates
are intended to be the "Certificates" described therein.

                                     REMIC I
                                     -------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the Group I Loans and other related assets (other
than the related Reserve Fund and the related Cap Contract) in the Trust Fund
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets shall be designated as "REMIC I." Component R-1 of the
Class R Certificate shall represent the sole class of "residual interests" in
REMIC I for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, the Uncertificated REMIC
I Pass-Through Rate, the initial Uncertificated Principal Balance, and solely
for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC I Regular Interests. None
of the REMIC I Regular Interests will be certificated.

<TABLE>
<CAPTION>

                                     Initial
                                  Uncertificated        Uncertified REMIC 1        Assumed Final Maturity
         Designation            Principal Balance        Pass-Through Rate                 Date(1)
<S>       <C>                      <C>                      <C>                       <C>
            LTI-1                   $218,749,958.00         Variable(2)                March 25, 2034
          LTI-IO-1                    $6,250,000.00         Variable(2)                March 25, 2034
          LTI-IO-2                    $6,250,000.00         Variable(2)                March 25, 2034
          LTI-IO-3                    $6,250,000.00         Variable(2)                March 25, 2034


                                      -1-
<PAGE>


          LTI-IO-4                   $12,500,000.00         Variable(2)                March 25, 2034
            LTI-P                           $100.00         Variable(2)                March 25, 2034
         ---------------
</TABLE>

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Group I Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates that represents one or more of the "regular interests" in
         REMIC I.


(2)      Calculated in accordance with the definition of "Uncertificated REMIC I
         Pass-Through Rate" herein.


                                    REMIC II
                                    --------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the Group II Loans and other related assets (other
than the related Reserve Fund and the related Cap Contracts) in the Trust Fund
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets shall be designated as "REMIC II." Component R-2 of
the Class R Certificate shall represent the sole class of "residual interests"
in REMIC II for purposes of the REMIC Provisions under federal income tax law.
The following table irrevocably sets forth the designation, the Uncertificated
REMIC II Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
II Regular Interests. None of the REMIC II Regular Interests will be
certificated.
<TABLE>
<CAPTION>

                                     Initial
                                  Uncertificated        Uncertified REMIC II       Assumed Final Maturity
         Designation            Principal Balance        Pass-Through Rate                 Date(1)
<S>       <C>                   <C>                         <C>                       <C>
           LTII-1                   $104,050,337.00         Variable(2)                March 25, 2034
           LTII-2                   $145,949,950.00         Variable(2)                March 25, 2034
           LTII-P                           $100.00         Variable(2)                March 25, 2034
         ---------------
</TABLE>


(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Group II Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates that represents one or more of the "regular interests" in
         REMIC II.


(2)      Calculated in accordance with the definition of "Uncertificated REMIC
         II Pass-Through Rate" herein.


                                    REMIC III

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the REMIC I Regular Interests and the REMIC II
Regular Interests as a REMIC for federal income tax purposes, and such
segregated pool of assets shall be designated as "REMIC III". Component R-3 of
the Class R Certificate shall represent the sole class of "residual interests"
in REMIC III for purposes of the REMIC Provisions under federal income tax law.
The following table irrevocably sets forth the designations, the Uncertificated
REMIC III Pass-Through Rate, the initial Uncertificated Principal Balance, and
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC
III Regular Interests. None of the REMIC III Regular Interests will be
certificated.

                                      -2-
<PAGE>



<TABLE>
<CAPTION>


                                 Uncertificated REMIC     Initial Uncertificated           Latest
           Designation          III Pass-Through Rate       Principal Balance         Possible Maturity(1)
           -----------------    ---------------------   --------------------------  -----------------------
<S>      <C>                       <C>                   <C>                          <C>
          LTIII-1AA                      (2)               $   244,999,958.84            March 25, 2034
          LTIII -1A1                     (2)               $       865,690.00            March 25, 2034
          LTIII -1A2                     (2)               $       127,790.00            March 25, 2034
          LTIII -1A3                     (2)               $       232,920.00            March 25, 2034
          LTIII -1A4                     (2)               $       166,850.00            March 25, 2034
          LTIII -1A5                     (2)               $       225,510.00            March 25, 2034
          LTIII -1A6                     (2)               $       250,000.00            March 25, 2034
          LTIII -1A7                     (2)               $       500,000.00            March 25, 2034
          LTIII -1M1                     (2)               $        60,000.00            March 25, 2034
          LTIII -1M2                     (2)               $        43,750.00            March 25, 2034
          LTIII -1M3                     (2)               $        18,750.00            March 25, 2034
          LTIII -ZZ                      (2)               $     2,508,739.16            March 25, 2034
         LTIII -IO-A                     (3)                       (4)                   March 25, 2034
         LTIII -IO-B                     (5)                       (6)                   March 25, 2034
           LTIII-1P                      (2)               $           100.00            March 25, 2034
          LTIII-2AA                      (2)               $   122,500,140.63            March 25, 2034
          LTIII-2AR1                     (2)               $       479,930.00            March 25, 2034
          LTIII-2AR2                     (2)               $       673,195.00            March 25, 2034
          LTIII-2MR1                     (2)               $        43,125.00            March 25, 2034
          LTIII-2MR2                     (2)               $        29,375.00            March 25, 2034
          LTIII-2MR3                     (2)               $        24,375.00            March 25, 2034
          LTIII-2ZZ                      (2)               $     1,250,002.87            March 25, 2034
         LTIII-2SUB1                     (2)               $           806.43            March 25, 2034
         LTIII-2GRP1                     (2)               $        10,405.04            March 25, 2034
         LTIII-2SUB2                     (2)               $         1,131.10            March 25, 2034
         LTIII-2GRP2                     (2)               $        14,595.00            March 25, 2034
          LTIII-2XX                      (2)               $   124,973,205.93            March 25, 2034
           LTIII-2P                      (2)               $           100.00            March 25, 2034
-------------------
</TABLE>

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Loan with the latest maturity date has been designated as
         the "latest possible maturity date" for each REMIC III Regular
         Interest.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC
         III Pass-Through Rate" herein. (3) REMIC III Regular Interest
         LTIII-IO-A will accrue interest at a rate of (i) for the first twelve
         Distribution Dates, 1.00% and (ii) thereafter, 0.00%.
(4)      REMIC III Regular Interest LTIII-IO-A will not have an Uncertificated
         Principal Balance, but will accrue interest on its Uncertificated
         Notional Amount, as defined herein.
(5)      REMIC III Regular Interest LTIII-IO-B will accrue interest at a rate of
         (i) for the first twenty-four Distribution Dates, 3.50% and (ii)
         thereafter, 0.00%.
(6)      REMIC III Regular Interest LTIII-IO-B will not have an Uncertificated
         Principal Balance, but will accrue interest on its Uncertificated
         Notional Amount, as defined herein.

                                    REMIC IV
                                    --------

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the REMIC III Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets shall be
designated as "REMIC IV". Component R-4 of the Class R Certificate shall
represent the sole class of "residual interests" in REMIC IV for purposes of the
REMIC Provisions under federal income tax law. The following table irrevocably
sets forth the designations, the Pass-through Rate and initial Certificate
Principal Balance for each Class of Certificates which, together with the Class
R-4 Component, constitute the entire beneficial



                                      -3-
<PAGE>

interests in REMIC IV. Determined solely for purposes of satisfying Treasury
regulation section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each Class of Certificates shall be the first Distribution Date that is two
years after the end of the remaining amortization schedule of the Loan in the
Mortgage Pool that has, as of the Closing Date, the longest remaining
amortization schedule, irrespective of its scheduled maturity:
<TABLE>
<CAPTION>

                                     Initial
                                   Certificate                                            Assumed Final
          Class Designation     Principal Balance          Pass-Through Rate            Maturity Date(1)
          -----------------     -----------------          -----------------            ----------------
<S>        <C>                   <C>                 <C>                                <C>
             Class I-A-1               $86,569,000    One Month LIBOR + 0.18% (2)        March 25, 2034
             Class I-A-2               $12,779,000             2.91% (2)                 March 25, 2034
             Class I-A-3               $23,292,000             3.59% (2)                 March 25, 2034
             Class I-A-4               $16,685,000             4.60% (2)                 March 25, 2034
             Class I-A-5               $22,551,000             5.36% (2)                 March 25, 2034
             Class I-A-6               $25,000,000             4.36% (2)                 March 25, 2034
             Class I-A-7               $50,000,000             3.75% (2)                 March 25, 2034
             Class I-A-IO                 Notional           4.50% (2) (3)               April 25, 2006
             Class I-M-1                $6,000,000             4.87% (2)                 March 25, 2034
             Class I-M-2                $4,375,000             5.32% (2)                 March 25, 2034
             Class I-M-3                $1,875,000             6.07% (2)                 March 25, 2034
              Class I-CE                  $873,958                (4)                    March 25, 2034
              Class I-P                       $100               N/A(6)                  March 25, 2034
            Class II-AR-1              $95,986,000    One Month LIBOR + 0.27% (2)         May 25, 2034
            Class II-AR-2             $134,639,000    One Month LIBOR + 0.39% (2)         May 25, 2034
            Class II-MR-1               $8,625,000    One Month LIBOR + 0.60% (2)         May 25, 2034
            Class II-MR-2               $5,875,000    One Month LIBOR + 1.25% (2)         May 25, 2034
            Class II-MR-3               $4,875,000    One Month LIBOR + 2.00% (2)         May 25, 2034
             Class II-CE                      $287                (5)                     May 25, 2034
              Class II-P                      $100               N/A(6)                   May 25, 2034
-------------------
</TABLE>


(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Loan in the related Loan Group with the latest maturity
         date has been designated as the "latest possible maturity date" for
         each related Class of Certificates.
(2)      Subject to a rate cap as described herein.
(3)      The Class I-A-IO Certificates will accrue interest at their
         Pass-Through Rate on the Notional Amount of the Class I-A-IO
         Certificates calculated in accordance with the definition of "Notional
         Amount" herein. The Pass-Through Rate on the Class I-A-IO Certificates
         will equal 4.50% per annum for the first 12 months following the
         Closing Date, 3.50% per annum for the next 12 months and 0.00% per
         annum for each month thereafter. The Class I-A-IO Certificates will not
         be entitled to distributions in respect of principal. For federal
         income tax purposes, the Class I-A-IO Certificates will not have a
         Notional Amount, but will be entitled to 100% of amounts distributed on
         REMIC III Regular Interest LTIII-IO-A and REMIC III Regular Interest
         LTIII-IO-B.
(4)      The Class I-CE Certificates will not accrue interest on their
         Certificate Principal Balance, but will accrue interest at their
         Pass-Through Rate on the Notional Amount of the Class I-CE Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC III Group I Regular
         Interests (other than REMIC III Regular Interest LTIII-P, REMIC III
         Regular Interest LTIII-IO-A and REMIC III Regular Interest LTIII-IO-B).
(5)      The Class II-CE Certificates will not accrue interest on their
         Certificate Principal Balance, but will accrue interest at their
         Pass-Through Rate on the Notional Amount of the Class II-CE
         Certificates outstanding

                                      -4-
<PAGE>

         from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC III Group II Regular
         Interests (other than REMIC III Regular Interest LTIII-P).

(6)      The Class P Certificates are not entitled to distributions in respect
         of interest.


                                      -5-
<PAGE>

                               W I T N E S S E T H
                               -------------------

         In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

Section 1.1       DEFINITIONS.

         Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article:

         ACCEPTED MASTER SERVICING PRACTICES: With respect to any Loan, as
applicable, those customary mortgage servicing practices of prudent mortgage
servicing institutions that master service mortgage loans of the same type and
quality as such Loan in the jurisdiction where the related Mortgaged Property is
located, to the extent applicable to the Master Servicer (except in its capacity
as successor to a Servicer).

         ACCOUNT: The Distribution Accounts and any Protected Account as the
context may require.

         ADJUSTABLE RATE LOAN:  Each of the Group II Loans.

         ADJUSTMENT DATE: With respect to each Adjustable Rate Loan, the first
day of the month in which the Mortgage Interest Rate of an Adjustable Rate Loan
changes pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-Off Date as to each Adjustable Rate Loan is set forth in the
Loan Schedule.

         ADVANCE: Either (i) a Monthly Advance made by a Servicer as such term
is defined in and pursuant to the related Servicing Agreement or (ii) an advance
made by the Master Servicer pursuant to Section 4.7.

         AFFILIATE: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officer's Certificate of any Servicer or the Depositor to
determine whether any Person is an Affiliate of such party.

         AGGREGATE CERTIFICATE PRINCIPAL BALANCE: At any given time, the sum of
the then current Certificate Principal Balances of all Classes of Certificates.

         AGREEMENT: This Pooling and Servicing Agreement and all amendments and
supplements hereto.

                                      -6-
<PAGE>

         AMBAC: Ambac Assurance Corporation, a Wisconsin-domiciled stock
insurance corporation or its successors in interest.

         ANNIVERSARY: Each anniversary of the Cut-Off Date.

         APPRAISED VALUE: The amount set forth in an appraisal made by or for
the mortgage originator in connection with its origination of each Loan.

         ASSIGNMENT: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Loan to the Trustee, which assignment,
notice of transfer or equivalent instrument may, if permitted by law, be in the
form of one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county.

         ASSIGNMENT AGREEMENTS: Shall mean (i) the Assignment, Assumption and
Recognition Agreement, dated as of April 30, 2004, among the Seller, the
Depositor and Greenpoint pursuant to which the Greenpoint Servicing Agreement
was assigned to the Depositor and (ii) the Assignment, Assumption and
Recognition Agreement, dated as of April 30, 2004, among the Seller, the
Depositor and M&T, pursuant to which the M&T Servicing Agreement was assigned to
the Depositor.

         AUTHORIZED DENOMINATION: With respect to the Class A Certificates and
the Class M Certificates, minimum initial Certificate Principal Balances of
$25,000 and integral multiples of $1.00 in excess thereof. With respect to the
Class P Certificates, minimum initial Certificate Principal Balances of $20 and
integral multiples thereof. With respect to the Class CE Certificates, minimum
initial Certificate Principal Balances of $10,000 and integral multiples of
$1.00 in excess thereof.

         AVAILABLE DISTRIBUTION AMOUNT: The Group I Available Distribution
Amount or the Group II Available Distribution Amount, as applicable.

         BANKRUPTCY LOSS: A loss on a Loan as reported by the related Servicer,
arising out of (i) a reduction in the scheduled Monthly Payment for such Loan by
a court of competent jurisdiction in a case under the United States Bankruptcy
Code, other than any such reduction that arises out of clause (ii) of this
definition of "Bankruptcy Loss," including, without limitation, any such
reduction that results in a permanent forgiveness of principal, or (ii) with
respect to any Loan, the positive difference, if any, resulting from the
outstanding Principal Balance on a Loan and the valuation, by a court of
competent jurisdiction in a case under such Bankruptcy Code, of the related
Mortgaged Property.

         BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a Depository Participant or an Indirect
Depository Participant or a Person holding a beneficial interest in any
Definitive Certificate.

         BOOK-ENTRY CERTIFICATES: The Class A Certificates and the Class M
Certificates beneficial ownership and transfers of which shall be made through
book entries as described in Section 5.1 and Section 5.3.

         BUSINESS DAY: Any day other than a Saturday, a Sunday, or a day on
which banking institutions in Maryland, Minnesota or New York are authorized or
obligated by law or executive order to be closed.

                                      -7-
<PAGE>

         CAP CONTRACTS: Any of the Class I-A-1 Cap Contract, Class II-AR-1 Cap
Contract, Class II-AR-2 Cap Contract, Class II-MR-1 Cap Contract, Class II-MR-2
Cap Contract and Class II-MR-3 Cap Contract.

         CAP PROVIDER: Swiss Re Financial Products Corporation, or any successor
thereto.

         CERTIFICATE: Any one of the Certificates issued pursuant to this
Agreement, executed and authenticated by or on behalf of the Securities
Administrator hereunder in substantially one of the forms set forth in Exhibits
A-1, A-2, A-3, A-4, A-5 and A-6 hereto.

         CERTIFICATE PRINCIPAL BALANCE: With respect to a Senior Certificate
(other than the Class I-A-IO Certificates, which have no Certificate Principal
Balance), Class M Certificate or Class P Certificate outstanding at any time,
the then maximum amount that the holder of such certificate is entitled to
receive as distributions allocable to principal from the cash flow on the
related Loans and the other assets in the Trust Fund. The Certificate Principal
Balance of a Senior Certificate, Class M Certificate or Class P Certificate as
of any date of determination is equal to the initial Certificate Principal
Balance of such Certificate plus, in the case of a Class M Certificate, any
Subsequent Recoveries added to the Certificate Principal Balance of such
certificate pursuant to Section 4.2 or 4.4, as applicable, reduced by the
aggregate of (i) all amounts allocable to principal previously distributed with
respect to that Certificate and (ii) with respect to the Class M Certificates,
any reductions in the Certificate Principal Balance of such certificate deemed
to have occurred in connection with allocations of Realized Losses, if any;
provided, however, that solely for purposes of determining Ambac's rights as
subrogee to the Holders of the Insured Certificates, the Certificate Principal
Balance of any Insured Certificate shall be deemed not to be reduced by any
principal amounts paid to the Holder thereof from Insurance Payments, unless
such amounts have been reimbursed to Ambac pursuant to Section 4.1(a)(iii)(B).
The Certificate Principal Balance of each Class CE Certificate as of any date of
determination is equal to the excess, if any, of (i) the then aggregate
Principal Balance of the related Loans over (ii) the then aggregate Certificate
Principal Balance of the related Senior Certificates, the related Class M
Certificates and the related Class P Certificates. The initial Certificate
Principal Balance of each Class of Certificates is set forth in the Preliminary
Statement hereto.

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.3.

         CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor, the Master Servicer, the Securities Administrator, the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests necessary
to effect any such consent has been obtained. The Trustee or the Securities
Administrator may conclusively rely upon a certificate of the Depositor, the
Seller or the Master Servicer in determining whether a Certificate is held by an
Affiliate thereof. All references herein to "Holders" or



                                      -8-
<PAGE>

"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein; provided, however, that the
Trustee or the Securities Administrator shall be required to recognize as a
"Holder" or "Certificateholder" only the Person in whose name a Certificate is
registered in the Certificate Register.

         CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate as reflected on the books of the
Depository or on the books of a Depository Participant or on the books of an
Indirect Depository Participant.

         CLASS: All Certificates having the same priority and rights to payments
from the Available Distribution Amount, designated as a separate Class, as set
forth in the forms of Certificates attached hereto as Exhibits A-1, A-2, A-3,
A-4, A-5 and A-6, as applicable.

         CLASS A CERTIFICATES: The Class I-A-1, I-A-2, I-A-3, I-A-4, I-A-5,
I-A-6, I-A-7, I-A-IO II-AR-1, and II-AR-2 Certificates, collectively, and
designated as such on the face thereof in substantially the forms attached
hereto as Exhibit A-1 or A-2, as applicable.

         CLASS CE CERTIFICATES: The Class I-CE Certificates and Class II-CE
Certificates, collectively, and designated as such on the face thereof in
substantially the form attached hereto as Exhibit A-4.

         CLASS I-A-1 CAP CONTRACT: The cap contract between the Trustee and the
Cap Provider, for the benefit of the Holders of the Class I-A-1 Certificates.

         CLASS I-A-6 LOCKOUT DISTRIBUTION AMOUNT: For any Distribution Date
shall be the Class I-A-6 Lockout Distribution Percentage for that Distribution
Date multiplied by the product of (x) a fraction, the numerator of which is the
Certificate Principal Balance of the Class I-A-6 Certificates and the
denominator of which is the aggregate Certificate Principal Balance of all of
the Group I Senior Certificates, in each case immediately prior to such
Distribution Date and (y) the Group I Senior Principal Distribution Amount for
such Distribution Date.

         CLASS I-A-6 LOCKOUT DISTRIBUTION PERCENTAGE: For each Distribution
Date, the applicable percentage set forth below:

  ------------------------------------------------------------------------------
                                                        CLASS I-A-6 LOCKOUT
                                                        -------------------
                      DISTRIBUTION DATES               DISTRIBUTION PERCENTAGE
                      ------------------               -----------------------
  ------------------------------------------------------------------------------
  May 2004 through and including April 2007                    0%
  ------------------------------------------------------------------------------
  May 2007 through and including April 2009                   45%
  ------------------------------------------------------------------------------
  May 2009 through and including April 2010                   80%
  ------------------------------------------------------------------------------
  May 2010 through and including April 2011                  100%
  ------------------------------------------------------------------------------
  May 2011 and thereafter                                    300%
  ------------------------------------------------------------------------------


                                      -9-
<PAGE>

         CLASS I-M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Group I Senior Principal
Distribution Amount or (ii) on or after the Group I Stepdown Date if a Group I
Trigger Event is not in effect for that Distribution Date, the lesser of:

          o    the remaining Group I Principal Distribution Amount for that
               Distribution Date after distribution of the Group I Senior
               Principal Distribution Amount; and

          o    the excess of (A) the aggregate Certificate Principal Balance of
               the Class I-M-1 Certificates immediately prior to that
               Distribution Date over (B) the positive difference between (i)
               the aggregate Principal Balance of the Group I Loans as of the
               last day of the related Due Period (after reduction for Realized
               Losses on the Group I Loans incurred during the related
               Prepayment Period) and (ii) the sum of (x) the aggregate
               Certificate Principal Balance of the Group I Senior Certificates
               (after taking into account the payment of the Group I Senior
               Principal Distribution Amount for such Distribution Date) and (y)
               the product of (a) the aggregate Principal Balance of the Group I
               Loans as of the last day of the related Due Period (after
               reduction for Realized Losses on the Group I Loans incurred
               during the related Prepayment Period) and (b) the sum of 5.00%
               and the related Required Overcollateralization Percentage.

         CLASS I-M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Group I Senior Principal
Distribution Amount and the Class I-M-1 Principal Distribution Amount or (ii) on
or after the Group I Stepdown Date if a Group I Trigger Event is not in effect
for that Distribution Date, the lesser of:

          o    the remaining Group I Principal Distribution Amount for that
               Distribution Date after distribution of the Group I Senior
               Principal Distribution Amount and the Class I-M-1 Principal
               Distribution Amount; and

          o    the excess of (A) the aggregate Certificate Principal Balance of
               the Class I-M-2 Certificates immediately prior to that
               Distribution Date over (B) the positive difference between (i)
               the aggregate Principal Balance of the Group I Loans as of the
               last day of the related Due Period (after reduction for Realized
               Losses on the Group I Loans incurred during the related
               Prepayment Period) and (ii) the sum of (x) the aggregate
               Certificate Principal Balance of the Group I Senior Certificates
               and the Class I-M-1 Certificates (after taking into account the
               payment of the Group I Senior Principal Distribution Amount and
               the Class I-M-1 Principal Distribution Amount for such
               Distribution Date) and (y) the product of (a) the aggregate
               Principal Balance of the Group I Loans as of the last day of the
               related Due Period (after reduction for Realized Losses on the
               Group I Loans incurred during the related Prepayment Period) and
               (b) the sum of 1.50% and the related Required
               Overcollateralization Percentage.

                                      -10-
<PAGE>

         CLASS I-M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Group I Senior Principal
Distribution Amount, the Class I-M-1 Principal Distribution Amount and the Class
I-M-2 Principal Distribution Amount or (ii) on or after the Group I Stepdown
Date if a Group I Trigger Event is not in effect for that Distribution Date, the
lesser of:

          o    the remaining Group I Principal Distribution Amount for that
               Distribution Date after distribution of the Group I Senior
               Principal Distribution Amount, the Class I-M-1 Principal
               Distribution Amount and the Class I-M-2 Principal Distribution
               Amount; and

          o    the excess of (A) the aggregate Certificate Principal Balance of
               the Class I-M-3 Certificates immediately prior to that
               Distribution Date over (B) the positive difference between (i)
               the aggregate Principal Balance of the Group I Loans as of the
               last day of the related Due Period (after reduction for Realized
               Losses on the Group I Loans incurred during the related
               Prepayment Period) and (ii) the sum of (x) the aggregate
               Certificate Principal Balance of the Group I Senior, Class I-M-1
               and Class I-M-2 Certificates (after taking into account the
               payment of the Group I Senior Principal Distribution Amount, the
               Class I-M-1 Principal Distribution Amount and the Class I-M-2
               Principal Distribution Amount for such Distribution Date) and (y)
               the product of (a) the aggregate Principal Balance of the Group I
               Loans as of the last day of the related Due Period (after
               reduction for Realized Losses on the Group I Loans incurred
               during the related Prepayment Period) and (b) the related
               Required Overcollateralization Percentage.

         CLASS II-AR-1 ALLOCATION PERCENTAGE: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group II
Principal Remittance Amount attributable to the Group II-1 Loans for such
Distribution Date and the denominator of which is (y) the Group II Principal
Remittance Amount for such Distribution Date.

         CLASS II-AR-1 CAP CONTRACT: Shall mean the cap agreement between the
Trustee and the Cap Provider, for the benefit of the Holders of the Class
II-AR-1 Certificates.

         CLASS II-AR-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the Group II-1 Principal Distribution Amount, or (ii) on or
after the Group II Stepdown Date if a Group II Trigger Event is not in effect
for that Distribution Date, the lesser of:

          o    the Group II-1 Principal Distribution Amount for that
               Distribution Date; and

          o    the product of the Class II-AR-1 Allocation Percentage and the
               excess (if any) of (A) the sum of the Certificate Principal
               Balances of the Class II-AR-1 Certificates and Class II-AR-2
               Certificates immediately prior to such Distribution Date over (B)
               the positive difference between (i) the aggregate Principal
               Balance of the



                                      -11-
<PAGE>

               Group II Loans as of the last day of the related Due Period
               (after reduction for Realized Losses on the Group II Loans
               incurred during the related Prepayment Period) and (ii) the
               product of (x) aggregate Principal Balance of the Group II Loans
               as of the last day of the related Due Period (after reduction for
               Realized Losses on the Group II Loans incurred during the related
               Prepayment Period) and (y) the sum of (A) 15.50% and (B) the
               related Required Overcollateralization Percentage.

         CLASS II-AR-2 CAP CONTRACT: The cap agreement between the Trustee and
the Cap Provider, for the benefit of the Holders of the Class II-AR-2
Certificates.

         CLASS II-AR-2 ALLOCATION PERCENTAGE: For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group II
Principal Remittance Amount attributable to the Group II-2 Loans for such
Distribution Date and the denominator of which is (y) the Group II Principal
Remittance Amount for such Distribution Date.

         CLASS II-AR-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the Group II-2 Principal Distribution Amount, or (ii) on or
after the Group II Stepdown Date if a Group II-2 Trigger Event is not in effect
for that Distribution Date, the lesser of:

          o    the Group II-2 Principal Distribution Amount for that
               Distribution Date; and

          o    the product of the Class II-AR-2 Allocation Percentage and the
               excess (if any) of (A) the sum of the Certificate Principal
               Balances of the Class II-AR-1 Certificates and Class II-AR
               Certificates immediately prior to such Distribution Date over (B)
               the positive difference between (i) the aggregate Principal
               Balance of the Group II Loans as of the last day of the related
               Due Period (after reduction for Realized Losses on the Group II
               Loans incurred during the related Prepayment Period) and (ii) the
               product of (x) aggregate Principal Balance of the Group II Loans
               as of the last day of the related Due Period (after reduction for
               Realized Losses on the Group II Loans incurred during the related
               Prepayment Period) and (y) the sum of (A) 15.50% and (B) the
               related Required Overcollateralization Percentage.

         CLASS II-MR-1 CAP CONTRACT: Shall mean the cap agreement between the
Trustee and the Cap Provider, for the benefit of the Holders of the Class
II-MR-1 Certificates.

         CLASS II-MR-1 PRINCIPAL DISTRIBUTION AMOUNT With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Group II Senior Principal
Distribution Amount or (ii) on or after the Group II Stepdown Date if a Group II
Trigger Event is not in effect for that Distribution Date, the lesser of:

          o    the remaining Group II Principal Distribution Amount for that
               Distribution Date after distribution of the Group II Senior
               Principal Distribution Amount; and



                                      -12-
<PAGE>

          o    the excess of (A) the aggregate Certificate Principal Balance of
               the Class II-MR-1 Certificates immediately prior to that
               Distribution Date over (B) the positive difference between (i)
               the aggregate Principal Balance of the Group II Loans as of the
               last day of the related Due Period (after reduction for Realized
               Losses on the Group II Loans incurred during the related
               Prepayment Period) and (ii) the sum of (x) the aggregate
               Certificate Principal Balance of the Group II Senior Certificates
               (after taking into account the payment of the Group II Senior
               Principal Distribution Amount for such Distribution Date) and (y)
               the product of (a) the aggregate Principal Balance of the Group
               II Loans as of the last day of the related Due Period (after
               reduction for Realized Losses on the Group II Loans incurred
               during the related Prepayment Period) and (b) the sum of 8.60%
               and the related Required Overcollateralization Percentage.

         CLASS II-MR-2 CAP CONTRACT: The cap agreement between the Trustee and
the Cap Provider, for the benefit of the Holders of the Class II-MR-2
Certificates.

         CLASS II-MR-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Group II Senior Principal
Distribution Amount and the Class II-MR-1 Principal Distribution Amount or (ii)
on or after the Group II Stepdown Date if a Group II Trigger Event is not in
effect for that Distribution Date, the lesser of:

          o    the remaining Group II Principal Distribution Amount for that
               Distribution Date after distribution of the Group II Senior
               Principal Distribution Amount and the Class II-MR-1 Principal
               Distribution Amount; and

          o    the excess of (A) the aggregate Certificate Principal Balance of
               the Class II-MR-2 Certificates immediately prior to that
               Distribution Date over (B) the positive difference between (i)
               the aggregate Principal Balance of the Group II Loans as of the
               last day of the related Due Period (after reduction for Realized
               Losses on the Group II Loans incurred during the related
               Prepayment Period) and (ii) the sum of (x) the aggregate
               Certificate Principal Balance of the Group II Senior Certificates
               and the Class II-MR-1 Certificates (after taking into account the
               payment of the Group II Senior Principal Distribution Amount and
               the Class II-MR-1 Principal Distribution Amount for such
               Distribution Date) and (y) the product of (a) the aggregate
               Principal Balance of the Group II Loans as of the last day of the
               related Due Period (after reduction for Realized Losses on the
               Group II Loans incurred during the related Prepayment Period) and
               (b) the sum of 3.90% and the related Required
               Overcollateralization Percentage.

         CLASS II-MR-3 CAP CONTRACT: The cap agreement between the Trustee and
the Cap Provider, for the benefit of the Holders of the Class II-MR-3
Certificates.

         CLASS II-MR-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date, or on or after the
Group II Stepdown Date if a Group II



                                      -13-
<PAGE>

Trigger Event is in effect for that Distribution Date, the remaining Group II
Principal Distribution Amount for that Distribution Date after distribution of
the Group II Senior Principal Distribution Amount, the Class II-MR-1 Principal
Distribution Amount and the Class II-MR-2 Principal Distribution Amount or (ii)
on or after the Group II Stepdown Date if a Group II Trigger Event is not in
effect for that Distribution Date, the lesser of:

          o    the remaining Group II Principal Distribution Amount for that
               Distribution Date after distribution of the Group II Senior
               Principal Distribution Amount, the Class II-MR-1 Principal
               Distribution Amount and the Class II-MR-2 Principal Distribution
               Amount; and

          o    the excess of (A) the aggregate Certificate Principal Balance of
               the Class II-MR-3 Certificates immediately prior to that
               Distribution Date over (B) the positive difference between (i)
               the aggregate principal balance of the Group II Loans as of the
               last day of the related Due Period (after reduction for Realized
               Losses on the Group II Loans incurred during the related
               Prepayment Period) and (ii) the sum of (x) the aggregate
               Certificate Principal Balance of the Group II Senior, Class
               II-MR-1 and Class II-MR-2 Certificates (after taking into account
               the payment of the Group II Senior Principal Distribution Amount,
               the Class II-MR-1 Principal Distribution Amount and the Class
               II-MR-2 Principal Distribution Amount for such Distribution Date)
               and (y) the product of (a) the aggregate principal balance of the
               Group II Loans as of the last day of the related Due Period
               (after reduction for Realized Losses on the Group II Loans
               incurred during the related Prepayment Period) and (b) the
               related Required Overcollateralization Percentage.

         CLASS M CERTIFICATES: The Class I-M-1, I-M-2, I-M-3, II-MR-1, II-MR-2
and II-MR-3 Certificates, collectively, and designated as such on the face
thereof in substantially the form attached hereto as Exhibit A-3.

         CLASS P CERTIFICATES: The Class I-P Certificates and the Class II-P
Certificates, collectively, and designated as such on the face thereof in
substantially the form attached hereto as Exhibit A-5.

         CLASS R CERTIFICATE: The Certificate designated as "Class R" on the
face thereof in substantially the form attached hereto as Exhibit A-6, which has
been designated as the sole class of "residual interests" in REMIC I, REMIC II,
REMIC III and REMIC IV, respectively, pursuant to Section 2.4.

         CLASS R CERTIFICATEHOLDER: The registered Holder of the Class R
Certificate.

         CLEANUP CALL: As defined in Section 9.1.

         CLEARING AGENCY: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
which initially shall be the Depository.

         CLOSING DATE: April 30, 2004.

                                      -14-
<PAGE>

         CODE: The Internal Revenue Code of 1986, as amended.

         COMPENSATING INTEREST: For any Distribution Date, (i) with respect to
each Servicer, an amount equal to the lesser of (a) the aggregate Prepayment
Interest Shortfalls and Curtailment Shortfalls for the Group I Loans or Group II
Loans, as applicable, for such Distribution Date and (b) the Servicing Fee
payable to such Servicer, for such Distribution Date and (ii) with respect to
the Master Servicer, the amount described in Section 3.20 for such Distribution
Date.

         COMPONENT R-1: The uncertificated residual interest in REMIC I.

         COMPONENT R-2: The uncertificated residual interest in REMIC II.

         COMPONENT R-3: The uncertificated residual interest in REMIC III.

         COMPONENT R-4: The uncertificated residual interest in REMIC IV.

         CORPORATE TRUST OFFICE: The principal corporate trust office of the
Trustee or the Securities Administrator, as the case may be, at which at any
particular time its corporate trust business in connection with this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at (i) with respect to the Trustee, HSBC Bank USA, 452
Fifth Avenue, New York, New York 10018, or at such other address as the Trustee
may designate from time to time by notice to the Certificateholders, the
Depositor, the Master Servicer and the Securities Administrator, or (ii) with
respect to the Securities Administrator, (A) for Certificate transfer and
surrender purposes, Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: DMSI 2004-3 and (B) for all other
purposes, Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia, Maryland
21045, Attention: DMSI 2004-3, or at such other address as the Securities
Administrator may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Trustee.

         CORRESPONDING CERTIFICATE: With respect to:

          (i)  REMIC III Regular Interest LTIII-1A1, the Class I-A-1
               Certificates,

          (ii) REMIC III Regular Interest LTIII-1A2, the Class I-A-2
               Certificates,

          (iii) REMIC III Regular Interest LTIII-1A3, the Class I-A-3
               Certificates,

          (iv) REMIC III Regular Interest LTIII-1A4, the Class I-A-4
               Certificates,

          (v)  REMIC III Regular Interest LTIII-1A5, the Class I-A-5
               Certificates,

          (vi) REMIC III Regular Interest LTIII-1A6, the Class I-A-6
               Certificates,

          (vii) REMIC III Regular Interest LTIII-1A7, the Class I-A-7
               Certificates,

          (viii) REMIC III Regular Interest LTIII-1M1, the Class I-M-1
               Certificates,

                                      -15-
<PAGE>

          (ix) REMIC III Regular Interest LTIII-1M2, the Class I-M-2
               Certificates,

          (x)  REMIC III Regular Interest LTIII-1M3, the Class I-M-3
               Certificates,

          (xi) REMIC III Regular Interest LTIII-1P, the Class I-P Certificates,

          (xii) REMIC III Regular Interest LTIII-2AR1, the Class II-AR-1
                Certificates,

          (xiii) REMIC III Regular Interest LTIII-2AR2, the Class II-AR-2
                 Certificates,

          (xiv) REMIC III Regular Interest LTIII-2MR1, the Class II-MR-1
                Certificates,

          (xv) REMIC III Regular Interest LTIII-2MR2, the Class II-MR-2
               Certificates,

          (xvi) REMIC III Regular Interest LTIII-2MR3, the Class II-MR-3
                Certificates, and

          (xvii) REMIC III Regular Interest LTIII-2P, the Class II-P
                Certificates.

         CREDIT RISK MANAGEMENT AGREEMENT OR CREDIT RISK MANAGEMENT AGREEMENTS:
Each agreement between the Credit Risk Manager and a Servicer or the Master
Servicer, regarding the loss mitigation and advisory services to be provided by
the Credit Risk Manager.

         CREDIT RISK MANAGEMENT FEE: The amount payable to the Credit Risk
Manager on each Distribution Date as compensation for all services rendered by
it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under any Credit Risk Management Agreement, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the Scheduled Principal Balance of the Loans and any
related REO Properties as of the first day of the related Due Period.

         CREDIT RISK MANAGEMENT FEE RATE: 0.01% per annum.

         CREDIT RISK MANAGER:  The Murrayhill Company, a Colorado corporation,
and its successors and assigns.

         CURTAILMENT: Any voluntary payment of principal on a Loan, made by or
on behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid
Monthly Payment or a Payoff, which is applied to reduce the outstanding
Principal Balance of the Loan.

         CURTAILMENT SHORTFALL: With respect to any Distribution Date and any
Curtailment received during the related Prepayment Period, an amount equal to
one month's interest on such Curtailment at the applicable Mortgage Interest
Rate on such Loan, net of the related Servicing Fee Rate.

         CUSTODIAL AGREEMENT: The Custodial Agreement dated as of April 1, 2004,
among the Trustee, Wells Fargo as Custodian, M&T and Greenpoint as such
agreement may be amended or supplemented from time to time, or any other
custodial agreement entered into after the date hereof with respect to any Loan
subject to this Agreement.

                                      -16-
<PAGE>

         CUSTODIAN: Either Wells Fargo or any other custodian appointed under
any custodial agreement entered into after the date of this Agreement.

         CUT-OFF DATE: April 1, 2004; except that with respect to each
Substitute Loan, the Cut-Off Date shall be the date of substitution.

         DEFINITIVE CERTIFICATES: As defined in Section 5.3.

         DELETED LOAN: A Loan replaced or to be replaced by a Substitute Loan.

         DELINQUENCY PERCENTAGE: With respect to any Loan Group, as of the last
day of the related Due Period, the percentage equivalent of a fraction, the
numerator of which is the Principal Balance of all related Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Principal
Balance of the related Loans and REO Properties as of the last day of the
previous calendar month.

         DEPOSITOR: Deutsche Mortgage Securities, Inc., a Delaware corporation,
or its successor-in-interest.

         DEPOSITORY: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry Certificates, is CEDE &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York and a
Clearing Agency.

         DEPOSITORY AGREEMENT: The Letter of Representations, dated April 29,
2004 by and among the Depository, the Depositor and the Trustee.

         DEPOSITORY PARTICIPANT: A broker, dealer, bank, other financial
institution or other Person for whom the Depository effects book-entry transfers
and pledges of securities deposited with the Depository.

         DETERMINATION DATE: With respect to each Servicer, the day of the month
set forth as the Determination Date in the related Servicing Agreement.

         DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code, and, for purposes of Article V herein, any
Person which is not a Permitted Transferee; provided, that a Disqualified
Organization does not include any Pass-Through Entity which owns or holds a
Class R Certificate and if which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary.

         DISTRIBUTION ACCOUNT: Each trust account or accounts related to the
Group I Loans and each trust account or accounts related to the Group II Loans,
in each case created and maintained by the Securities Administrator pursuant to
Section 3.23 for the benefit of the related Certificateholders and designated
"Wells Fargo Bank, N.A., as Securities Administrator, in trust for registered
holders of Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series
2004

                                      -17-
<PAGE>

-3, Group I Certificates" and "Wells Fargo Bank, N.A., as Securities
Administrator, in trust for registered holders of Deutsche Mortgage Securities,
Inc. Mortgage Loan Trust, Series 2004-3, Group II Certificates". Funds in each
Distribution Account shall be held in trust for the related Certificateholders
for the uses and purposes set forth in this Agreement. Each Distribution Account
must be an Eligible Account.

         DISTRIBUTION ACCOUNT DEPOSIT DATE: The Business Day prior to such
Distribution Date.

         DISTRIBUTION DATE: The 25th day (or, if such 25th day is not a Business
Day, the Business Day immediately succeeding such 25th day) of each month, with
the first such date being May 25, 2004.

         DUE DATE: The first day of each calendar month, which is the day on
which the Monthly Payment for each Loan is due, exclusive of any days of grace.
The "related Due Date" for any Distribution Date is the Due Date immediately
preceding such Distribution Date.

         DUE PERIOD: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.

         ELIGIBLE ACCOUNT: Any account or accounts held and established by the
Securities Administrator in trust for the Certificateholders at any Eligible
Institution.

         ELIGIBLE INSTITUTION: An institution having (i) the highest short-term
debt rating, and one of the two highest long-term debt ratings of each Rating
Agency, (ii) with respect to the Distribution Accounts, an unsecured long-term
debt rating of at least one of the two highest unsecured long-term debt ratings
of each Rating Agency, or (iii) the approval of each Rating Agency.

         ELIGIBLE INVESTMENTS: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date (or, with respect to a
Distribution Account maintained with the Securities Administrator, having a
scheduled maturity on or before the following Distribution Date; provided that,
such Eligible Investments shall be managed by, or an obligation of, the
institution that maintains a Distribution Account if such Eligible Investments
mature on the Distribution Date), regardless of whether any such obligation is
issued by the Depositor, the applicable Servicer, the Trustee, the Master
Servicer, the Securities Administrator or any of their respective Affiliates and
having at the time of purchase, or at such other time as may be specified, the
required ratings, if any, provided for in this definition:

                  (a) direct obligations of, or guaranteed as to full and timely
payment of principal and interest by, the United States or any agency or
instrumentality thereof, provided, that such obligations are backed by the full
faith and credit of the United States of America;

                  (b) direct obligations of, or guaranteed as to timely payment
of principal and interest by, Freddie Mac, Fannie Mae or the Federal Farm Credit
System, provided, that any such obligation, at the time of purchase or
contractual commitment providing for the purchase thereof,

                                      -18-
<PAGE>

is qualified by each Rating Agency as an investment of funds backing securities
rated "AAA" in the case of S&P and Moody's (the initial rating of the Class A
Certificates);

                  (c) demand and time deposits in or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, provided, that the short-term deposit ratings
and/or long-term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institutions in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company) have, in the case of commercial paper, the
highest rating available for such securities by each Rating Agency and, in the
case of long-term unsecured debt obligations, one of the two highest ratings
available for such securities by each Rating Agency, or in each case such lower
rating as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating Agency but in
no event less than the initial rating of the Senior Certificates;

                  (d) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving one of the two
highest long-term debt ratings available for such securities by each Rating
Agency, or such lower rating as will not result in the downgrading or withdrawal
of the rating or ratings then assigned to any Class of Certificates by any
Rating Agency;

                  (e) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) that is rated by each Rating Agency in its highest
short-term unsecured rating category at the time of such investment or
contractual commitment providing for such investment, and is issued by a
corporation the outstanding senior long-term debt obligations of which are then
rated by each Rating Agency in one of its two highest long-term unsecured rating
categories, or such lower rating as will not result in the downgrading or
withdrawal of the rating or ratings then assigned to any Class of Certificates
by any Rating Agency but in no event less than the initial rating of the Senior
Certificates;

                  (f) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in one of the two highest rating
levels available to such issuers by each Rating Agency at the time of such
investment, provided, that any such agreement must by its terms provide that it
is terminable by the purchaser without penalty in the event any such rating is
at any time lower than such level;

                  (g) repurchase obligations with respect to any security
described in clause (a) or (b) above entered into with a depository institution
or trust company (acting as principal) meeting the rating standards described in
(c) above;

                  (h) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States of
America or any State thereof and rated by each Rating Agency in one of its two
highest long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding principal amount
of securities issued



                                      -19-
<PAGE>

by such corporation that are then held as part of a Distribution Account to
exceed 20% of the aggregate principal amount of all Eligible Investments then
held in such Distribution Account;

                  (i) units of taxable money market funds (including those for
which the Trustee, the Securities Administrator, the Master Servicer or any
affiliate thereof receives compensation with respect to such investment) which
funds have been rated by each Rating Agency rating such fund in its highest
rating category or which have been designated in writing by each Rating Agency
as Eligible Investments with respect to this definition;

                  (j) if previously confirmed in writing to the Trustee and the
Securities Administrator, any other demand, money market or time deposit, or any
other obligation, security or investment, as may be acceptable to each Rating
Agency as a permitted investment of funds backing securities having ratings
equivalent to the initial rating of the Class A Certificates; and

                  (k) such other obligations as are acceptable as Eligible
Investments to each Rating Agency;

provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended.

         EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

         EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date and a Loan Group, the lesser of (i) the related Net Monthly Excess Cashflow
for such Distribution Date and (ii) the related Overcollateralization Increase
Amount for such Distribution Date.

         FANNIE MAE: Fannie Mae, formerly known as the Federal National Mortgage
Association, or any successor thereto.

         FDIC:  Federal Deposit Insurance Corporation, or any successor thereto.

         FINAL TERMINATOR: As defined in Section 9.2.

         FREDDIE MAC:  The Federal Home Loan Mortgage Corporation, or any
successor thereto.

         GREENPOINT: Greenpoint Mortgage Funding, Inc. or any successor thereto.

         GREENPOINT SERVICING AGREEMENT: Shall mean the Master Mortgage Loan
Purchase and Servicing Agreement, dated as of February 1, 2004, between the
Seller and Greenpoint (as modified pursuant to the related Assignment
Agreement).

                                      -20-
<PAGE>

         GROSS MARGIN: With respect to each Adjustable Rate Loan, the fixed
percentage set forth in the related Mortgage Note that is added to the Index on
each Adjustment Date in accordance with the terms of the related Mortgage Note
used to determine the Mortgage Interest Rate for such Adjustable Rate Loan.

         GROUP I AVAILABLE DISTRIBUTION AMOUNT: With respect to a Distribution
Date, the sum of the following amounts:

         (1) the total amount of all cash received by or on behalf of the
related Servicer with respect to the Group I Loans by the Determination Date for
such Distribution Date and not previously distributed (including Liquidation
Proceeds, Insurance Proceeds and Subsequent Recoveries), except:

                  (a) all Prepaid Monthly Payments on the Group I Loans;

                  (b) all Curtailments on the Group I Loans received after the
applicable Prepayment Period;

                  (c) all Payoffs on the Group I Loans received after the
applicable Prepayment Period together with all interest paid by the related
Mortgagors in connection with such Payoffs;

                  (d) Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries on the Group I Loans received after the applicable Prepayment Period;

                  (e) all amounts which are due and reimbursable to the related
Servicer pursuant to the terms of the related Servicing Agreement or to the
Master Servicer, the Securities Administrator, the Trustee or the Custodian
pursuant to the terms of this Agreement with respect to the Group I Loans;

                  (f) the Servicing Fee, the Master Servicing Fee and the Credit
Risk Management Fee for each Group I Loan for such Distribution Date;

                  (g) all investment earnings, if any, on amounts on deposit in
the related Distribution Account and each Protected Account;

                  (h) any premiums payable in connection with any lender paid
primary mortgage insurance policies with respect to the Group I Loans;

                  (i) the amount of any Prepayment Charges collected by the
related Servicer in connection with the Principal Prepayment of any of the Group
I Loans.

         (2) to the extent advanced by the related Servicer and/or the Master
Servicer and not previously distributed, the amount of any Advance made by the
related Servicer and/or the Master Servicer with respect to such Distribution
Date relating to the Group I Loans;

         (3) to the extent advanced by the related Servicer and/or the Master
Servicer and not previously distributed, any amount payable as Compensating
Interest by the related Servicer and/or the Master Servicer on such Distribution
Date relating to the Group I Loans; and

                                      -21-
<PAGE>

         (4) the total amount, to the extent not previously distributed, of all
cash received by the Distribution Date by the Trustee or the Master Servicer, in
respect of a Purchase Obligation with respect to a Group I Loan under Section
2.3 or any permitted repurchase of a Group I Loan.

         GROUP I CERTIFICATES: The Class I-A-1, I-A-2, I-A-3, I-A-4, I-A-5,
I-A-6, I-A-7, I-A-IO, I-M-1, I-M-2, I-M-3, I-CE and I-P Certificates.

         GROUP I CLEANUP CALL: As defined in Section 9.1.

         GROUP I CREDIT ENHANCEMENT PERCENTAGE: For any Class of Group I
Certificates and any Distribution Date, the percentage obtained by dividing (x)
the sum of (i) the aggregate Certificate Principal Balances of the Class or
Classes of Group I Certificates subordinate to such Certificate and (ii) the
related Overcollateralization Amount by (y) the aggregate Principal Balance of
the Group I Loans, calculated after taking into account distributions of
principal on the Group I Loans and distribution of the Group I Principal
Distribution Amount to the Holders of the Group I Certificates then entitled to
distributions of principal on such Distribution Date.

         GROUP I LOANS:  Those Loans identified on the Loan Schedule as Group I
Loans.

         GROUP I MARKER RATE: With respect to the Class I-CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC III Pass-Through Rate for each of REMIC III
Regular Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III
Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III
Regular Interest LTIII-1A7, REMIC III Regular Interest LTIII-1M1, Regular
Interest LTIII-1M2, Regular Interest LTIII-1M3 and Regular Interest LTIII-1ZZ,
with the rate on each such REMIC III Regular Interest (other than REMIC III
Regular Interest LTIII-1ZZ) subject to a cap equal to Pass-Through Rate for the
Corresponding Certificate, and with the rate on REMIC III Regular Interest
LTIII-1ZZ subject to a cap of zero for the purpose of this calculation; provided
however, such cap for REMIC III Regular Interest LTIII-1A1 shall be multiplied
by a fraction the numerator of which is the actual number of days in the related
Interest Accrual Period and the denominator of which is 30.

         GROUP I MEZZANINE CERTIFICATES:  The Class I-M-1, I-M-2 and I-M-3
Certificates.

         GROUP I PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution Date the sum
of (i) the principal portion of all scheduled Monthly Payments on the Group I
Loans due during the related Due Period, whether or not received on or prior to
the related Determination Date; (ii) the principal portion of repurchase
proceeds received with respect to any Group I Loan which was repurchased by the
Depositor pursuant to a Purchase Obligation or as permitted by this Agreement
(or, in the case of a substitution, amounts representing a principal adjustment)
during the related Prepayment Period; (iii) the principal portion of all other
unscheduled collections on the Group I Loans, including Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and all Curtailments and Payoffs
received during the related Prepayment Period, to the extent applied as
recoveries of principal on the Group I Loans MINUS (iv) the amount of any
related Overcollateralization Reduction Amount for such Distribution Date and
any amounts payable or reimbursable therefrom to the related Servicer, the
Trustee, the Custodian, the Master Servicer or the Securities Administrator
prior to distributions being made on the Group I Certificates. In no

                                      -22-
<PAGE>

event will the Group I Principal Distribution Amount with respect to any
Distribution Date be (x) less than zero or (y) greater than the then outstanding
aggregate Certificate Principal Balance of the Group I Certificates.

         GROUP I PRINCIPAL REMITTANCE AMOUNT: For any Distribution Date and the
Group I Loans, the sum of the amounts described in clauses (i) through (iii) of
the definition of Group I Principal Distribution Amount, net of any amounts
payable or reimbursable therefrom to the related Servicer, the Trustee, the
Custodian, the Master Servicer or the Securities Administrator.

         GROUP I REO PROPERTY: A Mortgaged Property related to a Group I Loan,
title to which has been acquired by the related Servicer on behalf of the Trust
Fund through foreclosure, deed in lieu of foreclosure or otherwise.

         GROUP I REQUIRED OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date following the Closing Date, an amount equal to approximately
$874,058.

         GROUP I RESERVE FUND: Shall mean the separate trust account created and
maintained by the Securities Administrator pursuant to Section 3.25 hereof on
behalf of the Holders of the Group I Certificates.

         GROUP I SENIOR CERTIFICATES: The Class I-A-1, I-A-2, I-A-3, I-A-4,
I-A-5, I-A-6, I-A-7 and I-A-IO Certificates.

         GROUP I SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the Group I Principal Distribution Amount or (ii) on or after
the Group I Stepdown Date if a Group I Trigger Event is not in effect for that
Distribution Date, the lesser of:

          (a)  the Group I Principal Distribution Amount for that Distribution
               Date; and

          (b)  the excess of (A) the aggregate Certificate Principal Balance of
               the Group I Senior Certificates immediately prior to that
               Distribution Date over (B) the positive difference between (i)
               the aggregate Principal Balance of the Group I Loans as of the
               last day of the related Due Period (after reduction for Realized
               Losses on the Group I Loans incurred during the related
               Prepayment Period) and (ii) the product of (x) the aggregate
               Principal Balance of the Group I Loans as of the last day of the
               related Due Period (after reduction for Realized Losses on the
               Group I Loans incurred during the related Prepayment Period) and
               (y) the sum of 9.80% and the related Required
               Overcollateralization Percentage.

         GROUP I STEPDOWN DATE: The earlier to occur of (1) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Group I Senior Certificates has been reduced to zero and (2) the later to occur
of (x) the Distribution Date in May 2007 and (y) the first Distribution Date on
which the Group I Credit Enhancement Percentage of the Group I Senior
Certificates (calculated for this purpose only after taking into account
distributions of principal on the Group I Loans, but prior to any distribution
of the Group I Principal Distribution Amount



                                      -23-
<PAGE>

to the Holders of the Group I Certificates then entitled to distributions of
principal on the Distribution Date) is greater than or equal to 10.50%.

         GROUP I TERMINATOR: As defined in Section 9.1.

         GROUP I TRIGGER EVENT: With respect to any Distribution Date and the
Group I Certificates, the occurrence of any of the following events: (x) the
related Delinquency Percentage exceeds 50% of the Group I Credit Enhancement
Percentage of the Group I Senior Certificates for the prior Distribution Date,
or (y) the aggregate amount of Realized Losses with respect to the Group I Loans
incurred since the Cut-Off Date through the last day of the related Due Period
divided by the aggregate Principal Balance of the Group I Loans as of the
Cut-Off Date exceeds the applicable percentages set forth below with respect to
such Distribution Date:

------------------------------------------------- -------------------------
                     DISTRIBUTION DATE                   PERCENTAGE
------------------------------------------------- -------------------------
May 2007 to April 2008...........................          0.75%
------------------------------------------------- -------------------------
May 2008 to April 2009...........................          1.00%
------------------------------------------------- -------------------------
May 2009 and thereafter..........................          1.25%
------------------------------------------------- -------------------------


         GROUP II AVAILABLE DISTRIBUTION AMOUNT: With respect to a Distribution
Date, the sum of the following amounts:

         (1) the total amount of all cash received by or on behalf of the
related Servicer with respect to the Group II Loans by the Determination Date
for such Distribution Date and not previously distributed (including Liquidation
Proceeds, Insurance Proceeds and Subsequent Recoveries), except:

                  (a) all Prepaid Monthly Payments on the Group II Loans;

                  (b) all Curtailments on the Group II Loans received after the
applicable Prepayment Period;

                  (c) all Payoffs on the Group II Loans received after the
applicable Prepayment Period together with all interest paid by the related
Mortgagors in connection with such Payoffs;

                  (d) Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries on the Group II Loans received after the applicable Prepayment
Period;

                  (e) all amounts which are due and reimbursable to the related
Servicer pursuant to the terms of the related Servicing Agreement or to the
Master Servicer, the Securities Administrator, the Trustee or the Custodian
pursuant to the terms of this Agreement with respect to the Group II Loans;

                  (f) the Servicing Fee, the Master Servicing Fee and the Credit
Risk Management Fee for each Group II Loan for such Distribution Date;

                                      -24-
<PAGE>

                  (g) all investment earnings, if any, on amounts on deposit in
the related Distribution Account and each Protected Account; and

                  (h) the amount of any Prepayment Charges collected by the
related Servicer in connection with the Principal Prepayment of any of the Group
II Loans.

         (2) to the extent advanced by the related Servicer and/or the Master
Servicer and not previously distributed, the amount of any Advance made by the
related Servicer and/or the Master Servicer with respect to such Distribution
Date relating to the Group II Loans;

         (3) to the extent advanced by the related Servicer and/or the Master
Servicer and not previously distributed, any amount payable as Compensating
Interest by the related Servicer and/or the Master Servicer on such Distribution
Date relating to the Group II Loans; and

         (4) the total amount, to the extent not previously distributed, of all
cash received by the Distribution Date by the Trustee or the Master Servicer, in
respect of a Purchase Obligation with respect to a Group II Loan under Section
2.3 or any permitted repurchase of a Group II Loan.

         GROUP II CERTIFICATES: The Class II-AR-1, II-AR-2, II-MR-1, II-MR-2,
II-MR-3, II-CE and II-P Certificates

         GROUP II CLEANUP CALL: As defined in Section 9.1.

         GROUP II CREDIT ENHANCEMENT PERCENTAGE: For any Class of Group II
Certificates and any Distribution Date, the percentage obtained by dividing (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class or
Classes of Group II Certificates subordinate thereto and (ii) the related
Overcollateralization Amount by (y) the aggregate Principal Balance of the Group
II Loans, calculated after taking into account distributions of principal on the
Group II Loans and distribution of the Group II Principal Distribution Amount to
the Holders of the Group II Certificates then entitled to distributions of
principal on such Distribution Date.

         GROUP II LOANS:  Those Loans identified on the Loan Schedule as Group
II Loans.

         GROUP II MARKER RATE: With respect to the Class II-CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC III Pass-Through Rate for each of REMIC III
Regular Interest LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III
Regular Interest LTIII-2MR1, Regular Interest LTIII-2MR2, Regular Interest
LTIII-2MR3 and Regular Interest LTIII-2ZZ, with the rate on each such REMIC III
Regular Interest (other than REMIC III Regular Interest LTIII-2ZZ) subject to a
cap equal to Pass-Through Rate for the Corresponding Certificate, and with the
rate on REMIC III Regular Interest LTIII-2ZZ subject to a cap of zero for the
purpose of this calculation; provided however, each such cap for each REMIC III
Regular Interest (other than REMIC III Regular Interest LTIII-2ZZ) shall be
multiplied by a fraction the numerator of which is the actual number of days in
the related Interest Accrual Period and the denominator of which is 30.

         GROUP II MEZZANINE CERTIFICATES: The Class II-MR-1, II-MR-2 and II-MR-3
Certificates.

                                      -25-
<PAGE>

         GROUP II PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of the Group II-1 Principal Distribution Amount and Group II-2 Principal
Distribution Amount.

         GROUP II PRINCIPAL REMITTANCE AMOUNT: For any Distribution Date and the
Group II Loans, the sum of the amounts described in clauses (i) through (iii) of
the definition of Group II-1 Principal Distribution Amount and Group II-2
Principal Distribution Amount, net of any amounts payable or reimbursable
therefrom to the related Servicer, the Trustee, the Custodian, the Master
Servicer or the Securities Administrator.

         GROUP II REO PROPERTY: A Mortgaged Property related to a Group II Loan,
title to which has been acquired by the related Servicer on behalf of the Trust
Fund through foreclosure, deed in lieu of foreclosure or otherwise.

         GROUP II REQUIRED OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date (a) if such Distribution Date is prior to the Group II
Stepdown Date, 0.60% of the aggregate Principal Balance of the Group II Loans as
of the Cut-Off Date, or (b) if such Distribution Date is on or after the Group
II Stepdown Date, the greater of (i) 1.20% of the then current aggregate
Principal Balance of the Group II Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses on the Group II Loans incurred during the
related Prepayment Period) and (ii) the Overcollateralization Floor.

         GROUP II RESERVE FUND: Shall mean the separate trust account created
and maintained by the Securities Administrator pursuant to Section 3.25 hereof
on behalf of the Holders of the Group II Certificates.

         GROUP II SENIOR CERTIFICATES: The Class II-AR-1 Certificates and
II-AR-2 Certificates.

         GROUP II SENIOR PRINCIPAL DISTRIBUTION AMOUNT: The sum of the Class
II-AR-1 Principal Distribution Amount and the Class II-AR-2 Principal
Distribution Amount.

         GROUP II STEPDOWN DATE: The earlier to occur of (1) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Group II Senior Certificates has been reduced to zero and (2) the later to occur
of (x) the Distribution Date in May 2007 and (y) the first Distribution Date on
which the Group II Credit Enhancement Percentage of the Group II Senior
Certificates (calculated for this purpose only after taking into account
distributions of principal on the Group II Loans, but prior to any distribution
of the Group II Principal Distribution Amount to the Holders of the Group II
Certificates then entitled to distributions of principal on the Distribution
Date) is greater than or equal to 16.70%.

         GROUP II TERMINATOR: As defined in Section 9.1.

         GROUP II TRIGGER EVENT: With respect to any Distribution Date and the
Group II Certificates, the occurrence of any of the following events: (x) the
related Delinquency Percentage exceeds 38% of the Group II Credit Enhancement
Percentage of the Group II Senior Certificates for the prior Distribution Date,
or (y) the aggregate amount of Realized Losses on the Group II Loans incurred
since the Cut-Off Date through the last day of the related Due



                                      -26-
<PAGE>

Period divided by the aggregate Principal Balance of the Group II Loans as of
the Cut-Off exceeds the applicable percentages set forth below with respect to
such Distribution Date:

-------------------------------------------- -------------------------
                     DISTRIBUTION DATE              PERCENTAGE
-------------------------------------------- -------------------------
May 2007 to April 2008......................          1.00%
-------------------------------------------- -------------------------
May 2008 to April 2009......................          1.50%
-------------------------------------------- -------------------------
May 2009 to April 2010......................          1.75%
-------------------------------------------- -------------------------
May 2010 and thereafter.....................          2.00%
-------------------------------------------- -------------------------


         GROUP II-1 LOANS: Those Loans identified on the Loan Schedule as Group
II-1 Loans.

         GROUP II-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
the sum of (i) the principal portion of all scheduled Monthly Payments on the
Group II-1 Loans due during the related Due Period, whether or not received on
or prior to the related Determination Date; (ii) the principal portion of all
repurchase proceeds received with respect to any Group II-1 Loan which was
repurchased by the Depositor pursuant to a Purchase Obligation or as permitted
by this Agreement (or, in the case of a substitution, certain amounts
representing a principal adjustment) during the related Prepayment Period; (iii)
the principal portion of all other unscheduled collections on the Group II-1
Loans, including Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries
and all Curtailments and Payoffs, received during the related Prepayment Period,
to the extent applied as recoveries of principal on the Group II-1 Loans minus
(iv) the Class II-AR-1 Allocation Percentage of the amount of any
Overcollateralization Reduction Amount for such Distribution Date and any
amounts payable or reimbursable therefrom to the related Servicer, the Trustee,
the Custodian, the Master Servicer or the Securities Administrator. In no event
will the Group II-1 Principal Distribution Amount with respect to any
Distribution Date be (x) less than zero or (y) greater than the then outstanding
aggregate Certificate Principal Balance of the Group II Certificates.

         GROUP II-2 LOANS: Those Loans identified on the Loan Schedule as Group
II-2 Loans.

         GROUP II-2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
the sum of (i) the principal portion of all scheduled Monthly Payments on the
Group II-2 Loans due during the related Due Period, whether or not received on
or prior to the related Determination Date; (ii) the principal portion of all
repurchase proceeds received with respect to any Group II-2 Loan which was
repurchased by the Depositor pursuant to a Purchase Obligation or as permitted
by this Agreement (or, in the case of a substitution, certain amounts
representing a principal adjustment) during the related Prepayment Period; (iii)
the principal portion of all other unscheduled collections on the Group II-2
Loans, including Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries
and all Curtailments and Payoffs, received during the related Prepayment Period,
to the extent applied as recoveries of principal on the Group II-2 Loans minus
(iv) the Class II-AR-2 Allocation Percentage of the amount of any
Overcollateralization Reduction Amount for such Distribution Date and any
amounts payable or reimbursable therefrom to the related Servicer, the Trustee,
the Custodian, the Master Servicer or the Securities Administrator. In no event
will the Group II-2 Principal Distribution Amount with respect to any
Distribution



                                      -27-
<PAGE>

Date be (x) less than zero or (y) greater than the then outstanding aggregate
Certificate Principal Balance of the Group II Certificates.

         GUARANTEED DISTRIBUTION: With respect to any Insured Certificates and
any Distribution Date, as defined in the Policy.

         INDEPENDENT: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor, each Servicer and the
Master Servicer, (ii) does not have any direct financial interest or any
material indirect financial interest in the Depositor, either Servicer or the
Master Servicer or any Affiliate of either and (iii) is not connected with the
Depositor, either Servicer or the Master Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.

         INDEX: As of any Adjustment Date, the index applicable to the
determination of the Mortgage Interest Rate on each Adjustable Rate Loan will
generally be the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in The Wall Street
Journal and as most recently available either (a) as of the first Business Day
45 days prior to such Adjustment Date or (b) as of the first Business Day of the
month preceding the month of such Adjustment Date, as specified in the related
Mortgage Note.

         INDIRECT DEPOSITORY PARTICIPANTS: Entities such as banks, brokers,
dealers or trust companies that clear through or maintain a custodial
relationship with a Depository Participant, either directly or indirectly.

         INSURANCE ACCOUNT: The account established pursuant to Section 12.2(b)
hereof.

         INSURANCE PAYMENT: Any payment made by Ambac with respect to any
Insured Certificates under the Policy.

         INSURANCE PROCEEDS: Proceeds of any title policy, hazard policy,
mortgage guaranty policy or other insurance policy covering a Loan, to the
extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
applicable Servicing Agreement.

         INSURED CERTIFICATES: The Class I-A-5 Certificates and Class I-A-6
Certificates.

         INSURER DEFAULT: The existence and continuance of any failure by Ambac
to make a payment required under the Policy in accordance with its terms.

         INSURER PREMIUM: With respect to the Insured Certificates, the premium
payable to Ambac on each Distribution Date in an amount equal to one-twelfth of
the product of the Insurer Premium Rate and the aggregate Certificate Principal
Balance of the Insured Certificates immediately prior to such Distribution Date.

         INSURER PREMIUM RATE:  The per annum rate specified in the Policy.

         INTEREST ACCRUAL PERIOD: With respect to each Distribution Date and the
Group I Senior Certificates (other than the Class I-A-1 Certificates), and the
Group I Mezzanine Certificates, the

                                      -28-
<PAGE>

calendar month preceding the month in which that Distribution Date occurs. The
Interest Accrual Period for the Class I-A-1, Group II Senior and Group II
Mezzanine Certificates shall be (a) as to the Distribution Date in May 2004, the
period commencing on the Closing Date and ending on the day preceding the
Distribution Date in May 2004, and (b) as to any Distribution Date after the
Distribution Date in May 2004, the period commencing on the Distribution Date in
the month immediately preceding the month in which that Distribution Date occurs
and ending on the day preceding that Distribution Date. Interest on the Group I
Senior Certificates, other than the Class I-A-1 Certificates, and on the Group I
Mezzanine Certificates will be calculated based on a 360-day year consisting of
twelve 30-day months. Interest on the Class I-A-1, Group II Senior and Group II
Mezzanine Certificates will be calculated based on a 360-day year and the actual
number of days elapsed in the related Interest Accrual Period.

         INTEREST CARRY FORWARD AMOUNT: With respect to any Distribution Date
and any Class of Class A Certificates or Class M Certificates, the sum of (i)
the amount, if any, by which (a) the related Interest Distribution Amount for
such Class of Certificates for the immediately preceding Distribution Date
exceeded (b) the actual amount distributed on such Class of Certificates in
respect of interest on such immediately preceding Distribution Date and (ii) the
amount of any related Interest Carry Forward Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date, plus accrued
interest on such sum calculated at the related Pass-Through Rate for the most
recently ended Interest Accrual Period.

         INTEREST DISTRIBUTION AMOUNT: On any Distribution Date, for any Class
of Certificates (other than the Class P Certificates and the Class R
Certificates), the amount of interest accrued on such Class during the related
Interest Accrual Period on the related Certificate Principal Balance or Notional
Amount of that, which shall be an amount, not less than zero, equal to (a) the
product of (1) 1/12th of the Pass-Through Rate for such Class and (2) the
Certificate Principal Balance or Notional Amount, as applicable, for such Class
before giving effect to allocations of Realized Losses in connection with such
Distribution Date or distributions to be made on such Distribution Date, REDUCED
BY (b) Uncompensated Interest Shortfalls allocated to such Class pursuant to
Section 1.2 and the interest portion of Realized Losses allocated to such Class
pursuant to Section 1.2.

         INTEREST REMITTANCE AMOUNT: With respect to any Distribution Date and a
Loan Group, that portion of the related Available Distribution Amount
attributable to interest received or advanced on the Group I Loans or the Group
II Loans, as applicable.

         INVESTMENT WITHDRAWAL DISTRIBUTION DATE:  As defined in Section
3.23(c).

         LAST SCHEDULED DISTRIBUTION DATE: With respect to each Class of Group I
Certificates other than the Class I-A-IO Certificates, March 25, 2034. With
respect to the Class I-A-IO Certificates, April 25, 2006. With respect to each
Class of Group II Certificates, May 25, 2034.

         LIBOR: For the initial Interest Accrual Period, on the Closing Date,
the Securities Administrator will determine the One-Month LIBOR for such
Interest Accrual Period based on information available on the second business
day preceding the Closing Date with respect to the Class I-A-1, Group II Senior
and Group II Mezzanine Certificates, and for any Interest Accrual Period
thereafter, the one month rate which appears on the Dow Jones Telerate System,
page 3750, as of 11:00 a.m., London time on the LIBOR Determination Date. If
such rate is not

                                      -29-
<PAGE>

provided, LIBOR shall mean the rate determined by the Securities Administrator
(or a calculation agent on its behalf) in accordance with the following
procedure:

                  (i) The Securities Administrator on the LIBOR Determination
Date will request the principal London offices of each of four major Reference
Banks in the London interbank market, as selected by the Securities
Administrator, to provide the Securities Administrator with its offered
quotation for deposits in United States dollars for the upcoming one-month
period, commencing on the second LIBOR Business Day immediately following such
LIBOR Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m. London time on such LIBOR Determination Date and in a
principal amount that is representative for a single transaction in United
States dollars in such market at such time. If at least two such quotations are
provided, LIBOR determined on such LIBOR Determination Date will be the
arithmetic mean of such quotations.

                  (ii) If fewer than two quotations are provided, LIBOR
determined on such LIBOR Determination Date will be the arithmetic mean of the
rates quoted at approximately 11:00 a.m. in New York City on such LIBOR
Determination Date by three major banks in New York City selected by the
Securities Administrator for one-month United States dollar loans to lending
European banks, in a principal amount that is representative for a single
transaction in United States dollars in such market at such time; provided,
however, that if the banks so selected by the Securities Administrator are not
quoting as mentioned in this sentence, LIBOR determined on such LIBOR
Determination Date will continue to be LIBOR as then currently in effect on such
LIBOR Determination Date.

         LIBOR BUSINESS DAY: Any day on which dealings in United States dollars
are transacted in the London interbank market.

         LIBOR DETERMINATION DATE: The second LIBOR Business Day before the
first day of the related Interest Accrual Period.

         LIQUIDATED LOAN: A Loan as to which the related Servicer has determined
in accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust Fund shall
not constitute final liquidation of the related Loan.

         LIQUIDATION PROCEEDS: The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the applicable Servicer pursuant to the related
Servicing Agreement or the Master Servicer in connection with (i) the taking of
all or a part of a Mortgaged Property by exercise of the power of eminent domain
or condemnation, (ii) the liquidation of a defaulted Loan through a trustee's
sale, foreclosure sale or otherwise, or (iii) the repurchase, substitution or
sale of a Loan or an REO Property pursuant to or as contemplated by Section 2.3
or Section 9.1.

         LOAN DOCUMENTS: The documents evidencing or relating to each Loan
delivered to the Custodian under the Custodial Agreement on behalf of the
Trustee.

         LOAN GROUP:  The Group I Loans or the Group II Loans, as applicable.

                                      -30-
<PAGE>

         LOAN SCHEDULE: The schedule, as amended from time to time, of Loans,
attached hereto as Schedule One, which shall set forth as to each Loan the
following, among other things:

          (i)  the loan number of the Loan and name of the related Mortgagor;

          (ii) the street address of the Mortgaged Property including city,
               state and zip code;

          (iii) the Mortgage Interest Rate as of the Cut-Off Date;

          (iv) the original term and maturity date of the related Mortgage Note;

          (v)  the original Principal Balance;

          (vi) the first payment date;

         (vii) the Monthly Payment in effect as of the Cut-Off Date;

        (viii) the date of the last paid installment of interest;

          (ix) the unpaid Principal Balance as of the close of business on the
               Cut-Off Date;

          (x)  the Loan-to-Value ratio at origination;

          (xi) the type of property and the Original Value of the Mortgaged
               Property;

         (xii) whether a primary mortgage insurance policy is in effect as of
               the Cut-Off Date;

        (xiii) the nature of occupancy at origination;

         (xiv) a code indicating whether the Loan is subject to Prepayment
               Charge, the term of such Prepayment Charge and the amount of such
               Prepayment Charge;

          (xv) with respect to each Adjustable Rate Loan, the first Adjustment
               Date;

         (xvi) with respect to each Adjustable Rate Loan, the Gross Margin;

        (xvii) with respect to each Adjustable Rate Loan, the Maximum Mortgage
               Interest Rate under the terms of the Mortgage Note; (xviii) with
               respect to each Adjustable Rate Loan, the Minimum Mortgage
               Interest Rate under the terms of the Mortgage Note;

         (xix) with respect to each Adjustable Rate Loan, the Periodic Rate
               Cap;

                                      -31-
<PAGE>

          (xx) with respect to each Adjustable Rate Loan, the first Adjustment
               Date immediately following the Cut-off Date;

          (xxi) with respect to each Adjustable Rate Loan, the Index; and

          (xxii) the related Loan Group.

         LOANS: The Mortgages and the related Mortgage Notes, each transferred
and assigned to the Trustee pursuant to the provisions hereof as from time to
time are held as part of the Trust Fund, as so identified in the Loan Schedule.
Each of the Loans is referred to individually in this Agreement as a "Loan".

         LOAN-TO-VALUE RATIO: The original principal amount of a Loan divided by
the Original Value; however, references to "current Loan-to-Value Ratio" shall
mean the then current Principal Balance of a Loan divided by the Original Value.

         M&T:  M&T Mortgage Corporation, a New York banking corporation, or any
successor thereto.

         M&T SERVICING AGREEMENT: The Interim Servicing and Servicing Rights
Purchase Agreement, dated as of December 1, 2003 between Deutsche Bank AG New
York Branch ("DBNY") and M&T, as assigned, with respect to the Group I Loans, by
DBNY to the Seller pursuant to that certain Assignment, Assumption and
Recognition Agreement, dated as of April 30, 2004, among the Seller, DBNY, M&T
and First National Bank of Nevada, and as modified pursuant to the related
Assignment Agreement.

         MASTER SERVICER: As of the Closing Date, Wells Fargo Bank, N.A. and
thereafter, its respective successors in interest who meet the qualifications of
this Agreement. The Master Servicer and the Securities Administrator shall at
all times be the same Person.

         MASTER SERVICER EVENT OF DEFAULT:  One or more of the events described
in Section 7.1 hereof.

         MASTER SERVICING FEE: As to each Loan and any Distribution Date, an
amount equal to one twelfth of the product of the Master Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Loan as of the Due Date in
the month preceding the month of such Distribution Date.

         MASTER SERVICING FEE RATE:  0.0025% per annum.

         MAXIMUM MORTGAGE INTEREST RATE: With respect to each Adjustable Rate
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Interest Rate thereunder.

         MINIMUM MORTGAGE INTEREST RATE: With respect to each Adjustable Rate
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Interest Rate thereunder.

                                      -32-
<PAGE>

         MONTHLY PAYMENT: The scheduled payment of principal and interest on a
Loan which is due on any Due Date for such Loan after giving effect to any
reduction in the amount of interest collectible from any Mortgagor pursuant to
the Relief Act.

         MOODY'S: Moody's Investors Service, Inc. or its successor in interest.

         MORTGAGE: The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.

         MORTGAGE FILE: The Loan Documents pertaining to a particular Loan.

         MORTGAGE INTEREST RATE: With respect to each Loan, the annual rate at
which interest accrues on such Loan from time to time in accordance with the
provisions of the related Mortgage Note without regard to any reduction thereof
as a result of the Relief Act, which rate with respect to each Adjustable Rate
Loan (A) as of any date of determination until the first Adjustment Date
following the Cut-off Date shall be the rate set forth in the Loan Schedule as
the Mortgage Interest Rate in effect immediately following the Cut-off Date and
(B) as of any date of determination thereafter shall be the rate as adjusted on
the most recent Adjustment Date equal to the sum, rounded to the nearest 0.125%
as provided in the Mortgage Note, of the Index, as most recently available as of
a date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Interest Rate on such
Adjustable Rate Loan on any Adjustment Date shall never be more than the lesser
of (i) the sum of the Mortgage Interest Rate in effect immediately prior to the
Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the related
Maximum Mortgage Interest Rate, and shall never be less than the greater of (i)
the Mortgage Interest Rate in effect immediately prior to the Adjustment Date
less the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage
Interest Rate. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance with
the immediately preceding sentence as of the date such Mortgage Loan became an
REO Property.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of April 30, 2004, between the Depositor and the Seller.

         MORTGAGE NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Loan.

         MORTGAGE POOL: All of the Loans.

         MORTGAGED PROPERTY: With respect to any Loan, the real property,
together with improvements thereto, securing the indebtedness of the Mortgagor
under the related Loan.

         MORTGAGOR: The obligor on a Mortgage Note.

         NET MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date and
a Loan Group, the sum of (i) any related Overcollateralization Reduction Amount
and (ii) the excess of (x) the related Available Distribution Amount for such
Distribution Date over (y) the sum for such Distribution Date of (A) the
aggregate Senior Interest Distribution Amounts payable to the Holders of the
related Senior Certificates, (B) the aggregate Interest Distribution Amounts


                                      -33-
<PAGE>

payable to the Holders of the related Class M Certificates, (C) the related
Principal Remittance Amount and (D) with respect to the Group I Certificates,
the premium payable to Ambac.

         NET MORTGAGE RATE: For each Loan and for any date of determination, a
per annum rate equal to the Mortgage Interest Rate for such Loan less the
related Servicing Fee Rate, the Master Servicing Fee Rate, the Credit Risk
Management Fee Rate and the rate at which the premium payable in connection with
any lender paid primary mortgage insurance policy is paid, if applicable.

         NET WAC PASS-THROUGH RATE:

         (a) For the Group I Senior Certificates (other than the Class I-A-IO
Certificates) and the Group I Mezzanine Certificates for (i) the May 2004
Distribution Date through the April 2006 Distribution Date, a per annum rate
equal to (1) the weighted average of the Net Mortgage Rates of the Group I Loans
as of the first day of the month preceding the month in which such Distribution
Date occurs minus (2) the Pass-Through Rate for the Class I-A-IO Certificates
for such Distribution Date multiplied by a fraction, the numerator of which is
the Notional Amount of the Class I-A-IO Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate Principal
Balance of the Group I Loans before giving effect to distributions on such
Distribution Date and, with respect to the Insured Certificates, minus the
Insurer Premium Rate (ii) any subsequent Distribution Date, a per annum rate
equal to the weighted average of the Net Mortgage Rates of the Group I Loans as
of the first day of the month preceding the month in which such Distribution
Date occurs, minus, with respect to the Insured Certificates, minus the Insurer
Premium Rate; provided that in each case the per annum rate applicable to the
Class I-A-1 Certificates shall be subject to adjustment based on the actual
number of days elapsed in the related Interest Accrual Period. For United States
federal income tax purposes, the equivalent of the foregoing shall be expressed
as the weighted average of the Uncertificated REMIC III Pass-Through Rates on
REMIC III Regular Interest LTIII-1AA, REMIC III Regular Interest LTIII-1A1,
REMIC III Regular Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3,
REMIC III Regular Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5,
REMIC III Regular Interest LTIII-1A6, REMIC III Regular Interest LTIII-1A7,
REMIC III Regular Interest LTIII-1M1, Regular Interest LTIII-1M2, Regular
Interest LTIII-1M3, Regular Interest LTIII-1ZZ and REMIC III Regular Interest
LTIII-1P, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC III Regular Interest, and with respect to the Insured Certificates,
minus the Insurer Premium Rate.

         (b) For any Distribution Date and the Class II-AR-1 Certificates, a per
annum rate (subject to adjustment based on the actual number of days elapsed in
the related Interest Accrual Period) equal to the weighted average of the Net
Mortgage Rates of the Group II-1 Loans. For United States federal income tax
purposes, the equivalent of the foregoing shall be expressed as the weighted
average of the Uncertificated REMIC III Pass-Through Rate on REMIC III Regular
Interest LTIII-2GRP1, weighted on the basis of the Uncertificated Principal
Balance of such REMIC III Regular Interest.

         (c) For any Distribution Date and the Class II-AR-2 Certificates, will
be a per annum rate (subject to adjustment based on the actual number of days
elapsed in the related Interest Accrual Period) equal to the weighted average of
the Net Mortgage Rates of the Group II-2



                                      -34-
<PAGE>

Loans. For United States federal income tax purposes, the equivalent of the
foregoing shall be expressed as the weighted average of the Uncertificated REMIC
III Pass-Through Rate on REMIC III Regular Interest LTIII-2GRP2, weighted on the
basis of the Uncertificated Principal Balance of such REMIC III Regular
Interest.

         (d) For any Distribution Date and the Group II Mezzanine Certificates,
will be a per annum rate (subject to adjustment based on the actual number of
days elapsed in the related Interest Accrual Period) equal to the weighted
average (weighted on the basis of the results of subtracting from the aggregate
Principal Balance of the Group II-1 Loans and Group II-2 Loans the Certificate
Principal Balance of the Class II-AR-1 Certificates and Class II-AR-2
Certificates, respectively) of (i) the weighted average of the Net Mortgage
Rates of the Group II-1 Loans, and (ii) the weighted average of the Net Mortgage
Rates of the Group II-2 Loans. For United States federal income tax purposes,
the equivalent of the foregoing shall be expressed as the weighted average of
the Uncertificated REMIC III Pass-Through Rate on (i) REMIC III Regular Interest
LTIII-2SUB1, subject to a cap and a floor equal to the weighted average of the
Net Mortgage Rates on the Group II-1 Loans, and (ii) REMIC III Regular Interest
LTIII-2SUB2, subject to a cap and a floor equal to the weighted average of the
Net Mortgage Rates on the Group II-2 Loans, weighted, in each case, on the basis
of the Uncertificated Principal Balance of such REMIC III Regular Interest.

         NET WAC RATE CARRYOVER AMOUNT: With respect to the Class A Certificates
(other than the Class I-A-IO Certificates) and the Class M Certificates and any
Distribution Date on which the related Pass-Through Rate is limited to the
related Net WAC Pass-Through Rate, an amount equal to the sum of (i) the excess
of (x) the amount of interest such Certificates would have been entitled to
receive on such Distribution Date if the Net WAC Pass-Through Rate had not been
applicable to such Certificates on such Distribution Date over (y) the amount of
interest accrued on such Distribution Date at the related Net WAC Pass-Through
Rate plus (ii) the related Net WAC Rate Carryover Amount for the previous
Distribution Date not previously distributed together with interest thereon at a
rate equal to the related Pass-Through Rate for such Class of Certificates for
the most recently ended Interest Accrual Period determined without taking into
account the applicable Net WAC Pass-Through Rate.

         NONRECOVERABLE ADVANCE: With respect to any Loan, any Advance or
Servicing Advance which the related Servicer shall have determined to be a
Nonrecoverable Advance as defined in and pursuant to the related Servicing
Agreement, or which the Master Servicer shall have determined to be
nonrecoverable pursuant to Section 4.7, respectively, and which was or is
proposed to be made by such Servicer or the Master Servicer.

         NON-U.S. PERSON: A Person that is not a U.S. Person.

         NOTIONAL AMOUNT: With respect to the Class I-A-IO Certificates will be
as follows: the lesser of (x) from and including the 1st Distribution Date
through and including the 6th Distribution Date, $31,250,000; from and including
the 7th Distribution Date through and including the 18th Distribution Date,
$25,000,000; from and including the 19th Distribution Date through and including
the 22nd Distribution Date, $18,750,000; from and including the 23rd
Distribution Date through and including the 24th Distribution Date, $12,500,000;
thereafter $0 and (y) the then aggregate principal balance of the Group I Loans
(prior to giving effect to



                                      -35-
<PAGE>

scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period). For United States federal income tax purposes,
the Class I-A-IO Certificates will not have a Notional Amount, but will be
entitled to 100% of amounts distributed on REMIC III Regular Interest LTIII-IO-A
and REMIC III Regular Interest LTIII-IO-B. With respect to the Class I-CE
Certificates, immediately prior to any Distribution Date, the aggregate of the
Uncertificated Principal Balances of the REMIC III Group I Regular Interests
(other than REMIC III Regular Interest LTIII-IO-A, REMIC III Regular Interest
LTIII-IO-B and REMIC III Regular Interest LTIII-1P). With respect to the Class
II-CE Certificates, immediately prior to any Distribution Date, the aggregate of
the Uncertificated Principal Balances of the REMIC III Group II Regular
Interests (other than REMIC III Regular Interest LTIII-2P).

         OFFICER'S CERTIFICATE: With respect to any Person, a certificate signed
by the Chairman of the Board, the President or a Vice-President, however
denominated, of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.

         OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, a Servicer, the Securities
Administrator or the Master Servicer, acceptable to the Trustee, except that any
opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or
(b) compliance with the REMIC Provisions must be an opinion of Independent
counsel.

         ORIGINAL VALUE: With respect to any Loan other than a Loan originated
for the purpose of refinancing an existing mortgage debt, the lesser of (a) the
Appraised Value (if any) of the Mortgaged Property at the time the Loan was
originated or (b) the purchase price paid for the Mortgaged Property by the
Mortgagor. With respect to a Loan originated for the purpose of refinancing
existing mortgage debt, the Original Value shall be equal to the lesser of (a)
the Appraised Value of the Mortgaged Property at the time the Loan was
originated or (b) the appraised value at the time the refinanced mortgage debt
was incurred.

         OTS: The Office of Thrift Supervision, or any successor thereto.

         OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date
following the Closing Date, the excess, if any, of (a) the aggregate Principal
Balances of the Loans and REO Properties of a Loan Group immediately following
such Distribution Date over (b) the sum of the aggregate Certificate Principal
Balances of the related Senior Certificates, the related Class M Certificates
and the related Class P Certificates as of such Distribution Date (after taking
into account all payments of principal on such Distribution Date).

         OVERCOLLATERALIZATION FLOOR: For any Distribution Date and the Group II
Certificates, 0.50% of the aggregate Principal Balance of the Group II Loans as
of the Cut-off Date.

         OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution
Date and a Loan Group, the amount, if any, by which the related Required
Overcollateralization Amount exceeds the related Overcollateralization Amount
for such Distribution Date (calculated for this purpose only after assuming that
100% of the related Principal Remittance Amount on such Distribution Date has
been distributed).

                                      -36-
<PAGE>

         OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any
Distribution Date and a Loan Group, the lesser of (i) the related Principal
Remittance Amount on such Distribution Date and (ii) the excess, if any, of (a)
the related Overcollateralization Amount for such Distribution Date (calculated
for this purpose only after assuming that 100% of the related Principal
Remittance Amount on such Distribution Date has been distributed over (b) the
related Required Overcollateralization Amount for such Distribution Date;
provided however that on any Distribution Date on which a Group I Trigger Event
or Group II Trigger Event, as applicable, is in effect, the
Overcollateralization Reduction Amount shall equal zero.

         OWNERSHIP INTEREST: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including any
interest in a Residual Certificate as the Holder thereof and any other interest
therein whether direct or indirect, legal or beneficial, as owner or as pledge.

         PASS-THROUGH ENTITY: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.

         PASS-THROUGH RATE: With respect to the Class A Certificates (other than
the Class I-A-IO Certificates) and Class M Certificates and any Distribution
Date, the lesser of (i) the interest rate listed in the Preliminary Statement
hereto and (ii) the related Net WAC Pass-Through Rate; provided, that with
respect to the Class I-A-5, Class I-A-6, Class I-M-1, Class I-M-2 and Class
I-M-3 Certificates, the interest rate listed in the Preliminary Statement hereto
shall be increased by 0.50% per annum on the Distribution Date following the
date of the first possible Group I Cleanup Call; provided, further, that the
margin applicable to the interest rate listed in the Preliminary Statement
hereto with respect to the Class II-AR-1 Certificates and Class II-AR-2
Certificates will increase by 100% per annum, and the margin applicable to the
interest rate listed in the Preliminary Statement hereto with respect to the
Group II Mezzanine Certificates will increase by 50% per annum, on the
Distribution Date following the date of the first possible Group II Cleanup
Call. With respect to the Class I-A-IO Certificates (i) for the first twelve
Distribution Dates, 4.50% per annum, (ii) for the next twelve Distribution
Dates, 3.50% per annum and (iii) for any Distribution Date thereafter, 0.00%.
For United States federal income tax purposes, however, the Class I-A-IO
Certificates will not have a Pass-Through Rate, and the Interest Distribution
Amount for the Class I-A-IO Certificates and any Distribution Date will be
deemed to be 100% of the amount distributed on REMIC III Regular Interest
LTIII-IO-A and REMIC III Regular Interest LTIII-IO-B for such Distribution Date.

         With respect to the Class I-CE Certificates, on any Distribution Date,
a per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is (x) the sum of the amounts calculated pursuant to clauses (A)
through (M) below, and the denominator of which is (y) the aggregate of the
Uncertificated Principal Balances of the REMIC III Group I Regular Interests
(other than REMIC III Regular Interest LTIII-IO-A, REMIC III Regular Interest
LTIII-IO-B and REMIC III Regular Interest LTIII-1P). For purposes of calculating
the Pass-Through Rate for the Class I-CE Certificates, the numerator is equal to
the sum of the following components:



                                      -37-
<PAGE>

                  (A) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1AA minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1AA;

                  (B) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A1 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1A1;

                  (C) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A2 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1A2;

                  (D) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A3 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1A3;

                  (E) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A4 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1A4;

                  (F) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A5 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1A5;

                  (G) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A6 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1A6;

                  (H) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1A7 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1A7;

                  (I) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1M1 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1M1;

                  (J) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1M2 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1M2;

                  (K) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1M3 minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1M3;

                  (L) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1ZZ minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1ZZ;
and

                                      -38-
<PAGE>

                  (M) 100% of the interest distributable on REMIC III Regular
Interest LTIII-1P.

         With respect to the Class II-CE Certificates, on any Distribution Date,
a per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is (x) the sum of the amounts calculated pursuant to clauses (A)
through (H) below, and the denominator of which is (y) the aggregate of the
Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA, REMIC
III Regular Interest LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC
III Regular Interest LTIII-2MR1, Regular Interest LTIII-2MR2, Regular Interest
LTIII-2MR3 and Regular Interest LTIII-2ZZ. For purposes of calculating the
Pass-Through Rate for the Class II-CE Certificates, the numerator is equal to
the sum of the following components:

                  (A) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AA minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-2AA;

                  (B) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AR1 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC III Regular Interest
LTIII-2AR1;

                  (C) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AR2 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC III Regular Interest
LTIII-2AR2;

                  (D) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2MR1 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC III Regular Interest
LTIII-2MR1;

                  (E) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2MR2 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC III Regular Interest
LTIII-2MR2;

                  (F) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2MR3 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC III Regular Interest
LTIII-2MR3;

                  (G) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2ZZ minus the Marker Rate, applied to an amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-2ZZ;
and

                  (H) 100% of the interest distributable on REMIC III Regular
Interest LTIII-2P.

         PAYOFF: Any voluntary payment of principal on a Loan by a Mortgagor
equal to the entire outstanding Principal Balance of such Loan, if received in
advance of the last scheduled Due



                                      -39-
<PAGE>

Date for such Loan and is not accompanied by scheduled interest due on any date
or dates in any month or months subsequent to the month of such payment-in-full.

         PERCENTAGE INTEREST: With respect to any Class of Certificates (other
than the Residual Certificates) and any date of determination, the undivided
percentage ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance or Notional Amount of all of the
Certificates of such Class. Each Certificate is issuable only in minimum
Percentage Interests corresponding to the Authorized Denomination of the related
Class of Certificates; provided, however, that a single Certificate of each such
Class of Certificates may be issued having a Percentage Interest corresponding
to the remainder of the aggregate initial Certificate Principal Balance of such
Class or to an otherwise Authorized Denomination for such Class plus such
remainder. With respect to any Residual Certificate, the undivided percentage
ownership in such Class evidenced by such Certificate, is as set forth on the
face of such Certificate.

         PERIODIC RATE CAP: With respect to each Adjustable Rate Loan and any
Adjustment Date therefor, the fixed percentage set forth in the related Mortgage
Note, which is the maximum amount by which the Mortgage Interest Rate for such
Adjustable Rate Loan may increase or decrease (without regard to the Maximum
Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on such Adjustment
Date from the Mortgage Interest Rate in effect immediately prior to such
Adjustment Date.

         PERMITTED TRANSFEREE: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing, (ii) a foreign government or International Organization, or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any electing large partnership under Section 775
of the Code, (vi) any Person from whom the Trustee or the Securities
Administrator has not received an affidavit to the effect that it is not a
"disqualified organization" within the meaning of Section 860E(e)(5) of the
Code, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the transfer of an Ownership Interest in a Residual
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that the Certificates are outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Code Section 7701 or successor provisions. A corporation shall not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and, with the
exception of the Freddie Mac, a majority of its board of directors is not
selected by such governmental unit.

         PERSON: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

                                      -40-
<PAGE>

         PLAN: As defined in Section 5.3.

         POLICY: The Certificate Guaranty Insurance Policy No. AB0753BE issued
by Ambac in respect of the Insured Certificates, including any endorsements
thereto, a copy of which is attached hereto as Exhibit H hereto.

         PREPAID MONTHLY PAYMENT: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Loan on its scheduled
Due Date and held in the related Protected Account until the related Servicer
Remittance Date following its scheduled Due Date.

         PREPAYMENT CHARGE: With respect to any Principal Prepayment, any
prepayment premium, penalty or charge payable by a Mortgagor in connection with
any Principal Prepayment on a Loan pursuant to the terms of the related Mortgage
Note.

         PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Loans providing
for a Prepayment Charge included in the Trust Fund on such date, attached hereto
as Schedule Two (including the prepayment charge summary attached thereto). The
Depositor shall deliver or cause the delivery of the Prepayment Charge Schedule
to the Master Servicer, the Trustee and the Credit Risk Manager on the Closing
Date. The Prepayment Charge Schedule shall set forth the following information
with respect to each Prepayment Charge:

          (i)  the Loan identifying number;

          (ii) a code indicating the type of Prepayment Charge;

         (iii) the date on which the first Monthly Payment was due on the
               related Mortgaged Loan;

          (iv) the term of the related Prepayment Charge;

          (v)  the original Principal Balance of the related Loan; and

          (vi) the Principal Balance of the related Loan as of the Cut-off Date.

         PREPAYMENT INTEREST SHORTFALL: For any Distribution Date and any Loan
on which a Payoff was made by a Mortgagor during the related Prepayment Period,
an amount equal to one month's interest at the applicable Net Mortgage Rate on
such Loan less the amount of interest actually paid by the Mortgagor with
respect to such Payoff.

         PREPAYMENT PERIOD: For any Distribution Date and the Group I Loans, the
period beginning on the 16th day of the month preceding the month in which such
Distribution Date occurs and ending on the 15th day of the month in which such
Distribution Date occurs with respect to Payoffs, and the calendar month
immediately preceding the month in which such Distribution Date occurs with
respect to Curtailments. For any Distribution Date and the Group II Loans, the
calendar month immediately preceding the month in which such Distribution Date
occurs.

         PRINCIPAL BALANCE: For any Loan and at the time of any determination,
the principal balance of such Loan remaining to be paid at the close of business
on the Cut-Off Date, after



                                      -41-
<PAGE>

deduction of all principal payments due on or before the Cut-Off Date whether or
not received, reduced by the principal portion of all amounts received with
respect to such Loan after the Cut-Off Date and distributed or to be distributed
to Certificateholders through the Distribution Date in the month of such
determination. In the case of a Substitute Loan, "Principal Balance" shall mean,
at the time of any determination, the principal balance of such Substitute Loan
on the related Cut-Off Date, reduced by the principal portion of all amounts
received with respect to such Loan after the Cut-Off Date and distributed or to
be distributed to Certificateholders through the Distribution Date in the month
of determination. The Principal Balance of a Liquidated Loan shall be zero.

         PRINCIPAL PREPAYMENT: Any payment of principal on a Loan which
constitutes a Payoff or a Curtailment.

         PRINCIPAL PREPAYMENT AMOUNT: On any Distribution Date and for the
Loans, the sum of (i) Curtailments received during the related Prepayment Period
and (ii) Payoffs received during the related Prepayment Period.

         PRINCIPAL REMITTANCE AMOUNT: The Group I Principal Remittance Amount or
Group II Principal Remittance Amount, as applicable.

         PROTECTED ACCOUNT: An account or accounts established and maintained
for the benefit of the Certificateholders by each Servicer with respect to the
related Loans and with respect to REO Property pursuant to the applicable
Servicing Agreement.

         PURCHASE OBLIGATION: An obligation of the Depositor to repurchase Loans
under the circumstances and in the manner provided in Section 2.3.

         PURCHASE PRICE: With respect to any Loan to be purchased pursuant to a
Purchase Obligation, or any Loan to be purchased or repurchased relating to an
REO Property, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee and the Securities Administrator, an amount equal to the
sum of (i) 100% of the Principal Balance thereof as of the date of purchase (or,
in the case of an REO Property being purchased pursuant to Section 9.1, 100% of
the fair market value of such REO Property, such valuation to be conducted by an
appraiser mutually agreed upon by the related Terminator and the Securities
Administrator, in their reasonable discretion), (ii) in the case of (x) a Loan,
accrued interest on such Principal Balance at the applicable Net Mortgage Rate
from the date interest was last paid by the related Mortgagor or the date an
Advance by the applicable Servicer or the Master Servicer, which payment or
Advance had as of the date of purchase been distributed pursuant to Section 4.1
or 4.3, through the end of the calendar month in which the purchase is to be
effected (or, in the case of a Loan being purchased pursuant to Section 9.1,
through the end of the calendar month immediately preceding the month in which
the purchase is to be effected) and (y) an REO Property, the sum of (1) accrued
interest on such Principal Balance at the applicable Net Mortgage Rate from the
date interest was last paid by the related Mortgagor or the date an Advance by
the applicable Servicer or the Master Servicer through the end of the calendar
month immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance



                                      -42-
<PAGE>

Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest in accordance with the
applicable Servicing Agreement, (iii) any unreimbursed Servicing Advances and
Advances (including Nonrecoverable Advances) and any unpaid Servicing Fees or
Master Servicing Fees allocable to such Loan or REO Property and (iv) in the
case of a Loan required to be purchased pursuant to Section 2.3, expenses
reasonably incurred or to be incurred by the Master Servicer, the Servicers, the
Trustee or the Securities Administrator in respect of the breach or defect
giving rise to a Purchase Obligation and any costs and damages incurred by the
Trust Fund in connection with any violation by any such Mortgage Loan of any
predatory or abusive lending law.

         RATE CHANGE DATE: With respect to a REMIC II Regular Interest
Component, the first month in which the pass-through rate for such component is
equal to 0.00%.

         RATING AGENCY: Initially, each of S&P and Moody's; thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Depositor, or their respective successors in
interest.

         RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by each Rating Agency.

         REALIZED LOSS: For any Distribution Date and any Loan which became a
Liquidated Loan during the related Prepayment Period, the sum of (i) the
Principal Balance of such Loan remaining outstanding (after all recoveries of
principal have been applied thereto) and the principal portion of Advances which
have been reimbursed with respect to such Loan, and (ii) the accrued interest on
such Loan remaining unpaid and the interest portion of Advances which have been
reimbursed from Liquidation Proceeds with respect to such Loan. The amounts
described in clause (i) shall be the principal portion of Realized Losses and
the amounts described in clause (ii) shall be the interest portion of Realized
Losses. For any Distribution Date and any Loan which is not a Liquidated Loan,
the amount of any Bankruptcy Loss incurred with respect to such Loan as of the
related Due Date shall be treated as a Realized Loss.

         RECORD DATE: With respect to each Distribution Date and each Class of
Certificates, other than the Class I-A-1 Certificates and the Group II Senior
Certificates and Group II Mezzanine Certificates, the last Business Day of the
month immediately preceding the month of the related Distribution Date. With
respect to the Class I-A-1, the Group II Senior Certificates and Group II
Mezzanine Certificates, the Business Day preceding the related Distribution
Date.

         REGULAR INTEREST CERTIFICATES: The Certificates, other than the Class R
Certificate.

         REIMBURSEMENT AMOUNT: will be the aggregate of any payments made with
respect to the Class I-A-5 Certificates and Class I-A-6 Certificates by Ambac
under the Policy to the extent not previously reimbursed, plus interest on that
amount at the Late Payment Rate set forth in the Policy.

         RELIEF ACT: The Servicemembers Civil Relief Act, as amended, or similar
state laws.

         RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date
and a Loan, the reduction in the amount of interest collectible on such Loan for
the most recently ended calendar



                                      -43-
<PAGE>

month immediately preceding such Distribution Date as a result of the
application of the Relief Act.

         REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.

         REMIC I: The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) the Group I Loans (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of such Loans (exclusive of any Prepayment Charges and late payment
fees received on such Loans), together with all documents included in the
related Mortgage File, subject to Section 2.1; (ii) such funds or assets as from
time to time are deposited in the related Distribution Account in respect of a
Loan and belonging to the Trust Fund; (iii) any REO Property in respect of a
Group I Loan; (iv) the primary hazard insurance policies, if any, the primary
insurance policies, if any, and all other insurance policies with respect to the
Loans; (v) the Policy; and (v) the Depositor's interest in respect of the
representations and warranties made by the Seller in the Mortgage Loan Purchase
Agreement as assigned to the Trustee pursuant to Section 2.1 hereof. REMIC I
specifically excludes the Group I Reserve Fund and the Class I-A-1 Cap Contract.

         REMIC I REGULAR INTEREST LTI-1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

                                      -44-
<PAGE>

         REMIC I REGULAR INTEREST LTI-IO-4: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IO-4 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-P: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-P shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-1, REMIC I
Regular Interest LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular
Interest LTI-IO-3, REMIC I Regular Interest LTI-IO-4 and REMIC I Regular
Interest LTI-P.

         REMIC II: The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) the Group II Loans (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of the Group II Loans (exclusive of any Prepayment Charges and late
payment fees received on the Group II Loans), together with all documents
included in the related Mortgage File, subject to Section 2.1; (ii) such funds
or assets as from time to time are deposited in the related Distribution Account
in respect of a Group II Loan and belonging to the Trust Fund; (iii) any REO
Property in respect of a Group II Loan; (iv) the primary hazard insurance
policies, if any, the primary insurance policies, if any, and all other
insurance policies with respect to the Loans and (v) the Depositor's interest in
respect of the representations and warranties made by the Seller in the Mortgage
Loan Purchase Agreement as assigned to the Trustee pursuant to Section 2.1
hereof. REMIC II specifically excludes the Group II Reserve Fund and the Class
II-AR-1 Cap Contract, Class II-AR-2 Cap Contract, Class II-MR-1 Cap Contract,
Class II-MR-2 Cap Contract and Class II-MR-3 Cap Contract.

         REMIC II REGULAR INTEREST LTII-1: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-1 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-2: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-2 shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

                                      -45-
<PAGE>

         REMIC II REGULAR INTEREST LTII-P: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-P shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTERESTS: REMIC II Regular Interest LTII-1, REMIC II
Regular Interest LTII-2 and REMIC II Regular Interest LTII-P.

         REMIC III: The pool of assets consisting of the REMIC I Regular
Interests and the REMIC II Regular Interests and all payments of principal or
interest on or with respect to the REMIC I Regular Interests and the REMIC II
Regular Interests after the Cut-Off Date.

         REMIC III GROUP I REGULAR INTERESTS: Regular Interest LTIII-1AA, REMIC
III Regular Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III
Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III
Regular Interest LTIII-1A7, REMIC III Regular Interest LTIII-1M1, REMIC III
Regular Interest LTIII-1M2, REMIC III Regular Interest LTIII-1M3, REMIC III
Regular Interest LTIII-1ZZ, REMIC III Regular Interest LTIII-1P, REMIC III
Regular Interest LTIII-IO-A and REMIC III Regular Interest LTIII-IO-B.

         REMIC III GROUP I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group I Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-1AA minus the Group I Marker Rate, divided by (b) 12.

         REMIC III GROUP I OVERCOLLATERALIZATION AMOUNT: With respect to any
date of determination, (i) 1% of the aggregate Uncertificated Principal Balances
of the REMIC III Group I Regular Interests minus (ii) the aggregate of the
Uncertificated Principal Balances of REMIC III Regular Interest LTIII-1A1, REMIC
III Regular Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III
Regular Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III
Regular Interest LTIII-1A6, REMIC III Regular Interest LTIII-1A7, REMIC III
Regular Interest LTIII-1M1, REMIC III Regular Interest LTIII-1M2, REMIC III
Regular Interest LTIII-1M3 and REMIC III Regular Interest LTII-1P, in each case
as of such date of determination.

         REMIC III GROUP I OVERCOLLATERALIZATION TARGET AMOUNT: 1% of the Group
I Required Overcollateralization Amount.

         REMIC III GROUP I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group I Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC III Regular Interest
LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III Regular Interest
LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III Regular Interest
LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III Regular Interest
LTIII-1A7,



                                      -46-
<PAGE>

REMIC III Regular Interest LTIII-1M1, REMIC III Regular Interest LTIII-1M2,
REMIC III Regular Interest LTIII-1M3 and REMIC III Regular Interest LTIII-1ZZ.

         REMIC III GROUP I REGULAR INTEREST LTIII-1ZZ MAXIMUM INTEREST DEFERRAL
AMOUNT: With respect to any Distribution Date, the excess of (i) accrued
interest at the Uncertificated REMIC III Pass-Through Rate applicable to REMIC
III Regular Interest LTIII-1ZZ for such Distribution Date on a balance equal to
the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1ZZ
minus the REMIC III Group I Overcollateralization Amount, in each case for such
Distribution Date, over (ii) Uncertificated Accrued Interest on REMIC III
Regular Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC III
Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6, REMIC III
Regular Interest LTIII-1A7, REMIC III Regular Interest LTIII-1M1, REMIC III
Regular Interest LTIII-1M2 and REMIC III Regular Interest LTIII-1M3 for such
Distribution Date, with the rate on each such REMIC III Regular Interest subject
to a cap equal to the related Pass-Through Rate for the Corresponding
Certificate.

         REMIC III GROUP II REGULAR INTERESTS: REMIC III Regular Interest
LTIII-2AA, REMIC III Regular Interest LTIII-2AR1, REMIC III Regular Interest
LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular Interest
LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3, REMIC III Regular Interest
LTIII-2ZZ, REMIC III Regular Interest LTIII-2P, REMIC III Regular Interest
LTIII-2SUB1, REMIC III Regular Interest LTIII-2GRP1, REMIC III Regular Interest
LTIII-2SUB2, REMIC III Regular Interest LTIII-2GRP2 and REMIC III Regular
Interest LTIII-2XX.

         REMIC III GROUP II INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group II Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC III Pass-Through Rate for REMIC
III Regular Interest LTIII-2AA minus the Group II Marker Rate, divided by (b)
12.

         REMIC III GROUP II MARKER ALLOCATION PERCENTAGE: 50% of any amount
payable or loss attributable from the Group II Loans, which shall be allocated
to REMIC III Regular Interest LTIII-2AA, REMIC III Regular Interest LTIII-2AR1,
REMIC III Regular Interest LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1,
REMIC III Regular Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3,
REMIC III Regular Interest LTIII-2ZZ and REMIC III Regular Interest LTIII-2P

         REMIC III GROUP II OVERCOLLATERALIZATION AMOUNT: With respect to any
date of determination, (i) 0.50% of the aggregate Uncertificated Principal
Balances of the REMIC III Group II Regular Interests minus (ii) the aggregate of
the Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AR1,
REMIC III Regular Interest LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1,
REMIC III Regular Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3 and
REMIC III Regular Interest LTIII-2P, in each case as of such date of
determination.

         REMIC III GROUP II OVERCOLLATERALIZATION TARGET AMOUNT: 0.50% of the
Group II Required Overcollateralization Amount.

                                      -47-
<PAGE>

         REMIC III GROUP II PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to
any Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Group II Loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC III Regular Interest
LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III Regular Interest
LTIII-2MR1, Regular Interest LTIII-2MR2, Regular Interest LTIII-2MR3 and REMIC
III Regular Interest LTIII-2ZZ.

         REMIC III GROUP II REGULAR INTEREST LTIII-2ZZ MAXIMUM INTEREST DEFERRAL
AMOUNT: With respect to any Distribution Date, the excess of (i) accrued
interest at the Uncertificated REMIC III Pass-Through Rate applicable to REMIC
III Regular Interest LTIII-2ZZ for such Distribution Date on a balance equal to
the Uncertificated Principal Balance of REMIC III Regular Interest LTIII-2ZZ
minus the REMIC III Group II Overcollateralization Amount, in each case for such
Distribution Date, over (ii) Uncertificated Accrued Interest on REMIC III
Regular Interest LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III
Regular Interest LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2 and REMIC III
Regular Interest LTIII-2MR3 for such Distribution Date, with the rate on each
such REMIC III Regular Interest subject to a cap equal to the related
Pass-Through Rate for the Corresponding Certificate.

         REMIC III SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable from
or loss attributable to the Group II Loans, which shall be allocated to REMIC
III Regular Interest LTIII-2SUB1, REMIC III Regular Interest LTIII-2GRP1, REMIC
III Regular Interest LTIII-2SUB2, REMIC III Regular Interest LTIII-2GRP2 and
REMIC III Regular Interest LTIII-2XX.

         REMIC III SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated Principal Balances of each REMIC III Regular Interest ending with
the designation "SUB,", equal to the ratio among, with respect to each such
REMIC III Regular Interest, the excess of (x) the aggregate Stated Principal
Balance of the Group II Loans over (y) the current Certificate Principal Balance
of Certificates.

         REMIC III REGULAR INTEREST: Any one of the separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated as a
Regular Interest in REMIC III. Each REMIC III Regular Interest shall accrue
interest at the related Uncertificated REMIC III Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal (other
than REMIC III Regular Interest LTIII-IO-A and REMIC III Regular Interest
LTIII-IO-B), subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.

         REMIC IV: The pool of assets consisting of the REMIC III Regular
Interests and all payments of principal or interest on or with respect to the
REMIC III Regular Interests after the Cut Off Date.

         REMIC PROVISIONS: Provisions of the United States federal income tax
law relating to real estate mortgage investment conduits, which appear at
Section 860A through 860G of the Code, and related provisions, and proposed,
temporary and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.

                                      -48-
<PAGE>

         REMIC REGULAR INTEREST: A REMIC I Regular Interest, REMIC II Regular
Interest, REMIC III Regular Interest or a Regular Interest Certificate.

         REMITTANCE REPORT: A report by the Securities Administrator pursuant to
Section 4.6.

         REO DISPOSITION: The sale or other disposition of an REO Property on
behalf of REMIC I.

         REO IMPUTED INTEREST: As to any REO Property, for any calendar month
during which such REO Property was at any time part of REMIC I, one month's
interest at the applicable Net Mortgage Rate on the Scheduled Principal Balance
of such REO Property (or, in the case of the first such calendar month, of the
related Loan, if appropriate) as of the close of business on the Distribution
Date in such calendar month.

         REO PROPERTY: A Group I REO Property or Group II REO Property.

         REQUIRED OVERCOLLATERALIZATION AMOUNT: The Group I Required
Overcollateralization Amount or the Group II Required Overcollateralization
Amount.

         REQUIRED OVERCOLLATERALIZATION PERCENTAGE: For any Distribution Date
and a Loan Group, a percentage equal to (a) the related Required
Overcollateralization Amount divided by (b) the aggregate Principal Balance of
the Loans in the related Loan Group as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses on the Loans in the related Loan Group incurred during the
related Prepayment Period).

         RESIDUAL CERTIFICATE: The Class R Certificate, which is being issued in
a single class. Components R-1, R-2, R-3 and R-4 of the Class R Certificate are
hereby each designated the sole Class of "residual interests" in REMIC I, REMIC
II, REMIC III and REMIC IV, respectively, for purposes of Section 860G(a)(2) of
the Code.

         RESERVE FUND: The Group I Reserve Fund or the Group II Reserve Fund, as
applicable.

         RESERVE INTEREST RATE: The rate per annum that the Securities
Administrator determines to be either (i) the arithmetic mean of the one-month
U.S. dollar lending rates which New York City banks selected by the Securities
Administrator are quoting on the relevant LIBOR Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Securities Administrator can determine no such arithmetic
mean, the lowest one-month U.S. dollar lending rate which New York City banks
selected by the Securities Administrator are quoting on such Interest
Determination Date to leading European banks.

         RESPONSIBLE OFFICER: When used with respect to the Trustee, any officer
in the corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject. When used with respect to the Master Servicer or the Securities
Administrator,



                                      -49-
<PAGE>

the Chairman or Vice-Chairman of the Board of Directors or Trustees, the
Chairman or Vice-Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, the Chairman of the Committee on Trust
Matters, any Vice-President, any Assistant Vice-President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier, any Trust Officer or Assistant Trust Officer, the Controller,
any Assistant Controller or any other officer customarily performing functions
similar to those performed by any of the above-designated officers and in each
case having direct responsibility for the administration of this Agreement, and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to the Depositor or any other Person,
the Chairman or Vice-Chairman of the Board of Directors, the Chairman or
Vice-Chairman of any executive committee of the Board of Directors, the
President, any Vice-President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, or any other officer of the Depositor
customarily performing functions similar to those performed by any of the
above-designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

         S&P: Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc. provided, that at any time it is a Rating Agency.

         SCHEDULED PRINCIPAL BALANCE: With respect to any Loan and a Due Date,
the unpaid principal balance of such Loan as specified in the amortization
schedule (before any adjustment to such schedule by reason of bankruptcy or
similar proceeding or any moratorium or similar waiver or grace period) for such
Due Date, after giving effect to any previously applied Curtailments, the
payment of principal on such Due Date and any reduction of the principal balance
of such Loan by a bankruptcy court, irrespective of any delinquency in payment
by the related Mortgagor.

         SECURITIES ACT: The Securities Act of 1933, as amended.

         SECURITIES ADMINISTRATOR: As of the Closing Date, Wells Fargo Bank,
N.A. and thereafter, its respective successors in interest who meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person.

         SELLER: DB Structured Products, Inc., or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement and in its
capacity as assignor under the Assignment Agreements.

         SENIOR CERTIFICATES: The Class A Certificates.

         SENIOR INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date and a Loan Group, an amount equal to the sum of (i) the Interest
Distribution Amount for such Distribution Date for the related Senior
Certificates and (ii) the Interest Carry Forward Amount, if any, for such
Distribution Date for the related Senior Certificates.

         SERVICER: M&T or Greenpoint, as applicable, or any successor appointed
under the applicable Servicing Agreement.

                                      -50-
<PAGE>

         SERVICER CREDIT RISK MANAGEMENT AGREEMENT: As defined in Section 3.1.

         SERVICER REMITTANCE DATE: With respect to each Distribution Date shall
mean (i) with respect to M&T, the 18th day of the calendar month in which such
Distribution Date occurs or, if such 18th day is not a Business Day, the
Business Day immediately preceding such 18th day and (ii) with respect to
Greenpoint, the 10th day of the calendar month in which such Distribution Date
occurs or, if such 10th day is not a Business Day, the Business Day immediately
preceding such 10th day.

         SERVICING ADVANCES: The customary reasonable and necessary
"out-of-pocket" costs and expenses incurred by the applicable Servicer in
connection with a default, delinquency or other unanticipated event by the
applicable Servicer in the performance of its servicing obligations, including,
but not limited to, the cost of (i) the preservation, restoration and protection
of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, in respect of a particular Loan and (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property. No Servicer shall be required to make any Servicing Advance in respect
of a Loan or REO Property that, in the good faith business judgment of such
Servicer, would not be ultimately recoverable from related Insurance Proceeds or
Liquidation Proceeds on such Loan or REO Property as provided herein.

         SERVICING AGREEMENT: The M&T Servicing Agreement or the Greenpoint
Servicing Agreement.

         SERVICING FEE: With respect to each Loan and for any Distribution Date,
an amount equal to one twelfth of the product of the related Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Loan as of the Due Date in
the month preceding the month of such Distribution Date. The Servicing Fee is
payable solely from collections of interest on the Loans or as otherwise
provided in the related Servicing Agreement.

         SERVICING FEE RATE: With respect to each Group I Loan, 0.25% per annum.
With respect to each Group II Loan (x) prior to the first Adjustment Date on
such Loan, 0.25% per annum and (y) thereafter, 0.375% per annum.

         SERVICING OFFICER: Any individual involved in, or responsible for, the
administration and servicing of the Loans whose name and specimen signature
appear on a list of servicing officers furnished to the Trustee, the Depositor
and the Securities Administrator on the Closing Date by each Servicer and the
Master Servicer, as such lists may from time to time be amended.

         STARTUP DAY: With respect to each REMIC, the day designated as such
pursuant to Section 10.1(b) hereof.

         SUBSEQUENT RECOVERIES: With respect to any Distribution Date and a Loan
Group will be amounts received during the related Prepayment Period by the
related Servicer specifically related to a defaulted Loan or disposition of an
REO Property prior to the related Prepayment Period that resulted in a Realized
Loss, after the liquidation or disposition of such defaulted Loan.

                                      -51-
<PAGE>

         SUBSTITUTE LOAN: A mortgage loan substituted for a Deleted Loan
pursuant to the terms of this Agreement which must, on the date of such
substitution, (i) have an outstanding principal balance, after application of
all scheduled payments of principal and interest due during or prior to the
month of substitution, not in excess of the Scheduled Principal Balance of the
Deleted Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Interest Rate not less than (and not
more than one percentage point in excess of) the Mortgage Interest Rate of the
Deleted Loan, (iii) if the mortgage loan is an Adjustable Rate Loan, have a
Maximum Mortgage Interest Rate not less than the Maximum Mortgage Interest Rate
on the Deleted Loan, (iv) if the mortgage loan is an Adjustable Rate Loan, have
a Minimum Mortgage Interest Rate not less than the Minimum Mortgage Interest
Rate of the Deleted Loan, (v) if the mortgage loan is an Adjustable Rate Loan,
have a Gross Margin equal to the Gross Margin of the Deleted Loan, (vi) if the
mortgage loan is an Adjustable Rate Loan, have a next Adjustment Date not more
than two months later than the next Adjustment Date on the Deleted Loan, (vii)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Deleted Loan, (viii) have the same Due Date as the Due
Date on the Deleted Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted Loan
as of such date, (x) have a risk grading at least equal to the risk grading
assigned on the Deleted Loan, (xi) is a "qualified mortgage" as defined in the
REMIC Provisions and (xii) conform to each representation and warranty set forth
in Section 6 of the Mortgage Loan Purchase Agreement applicable to the Deleted
Loan. In the event that one or more mortgage loans are substituted for one or
more Deleted Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the terms described in clause (vii)
hereof shall be determined on the basis of weighted average remaining term to
maturity, the Loan-to-Value Ratios described in clause (ix) hereof shall be
satisfied as to each such mortgage loan, the risk gradings described in clause
(x) hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
described in clause (xii) hereof must be satisfied as to each Substitute Loan or
in the aggregate, as the case may be. In the event that the Deleted Loan is a
Discount Loan, the Substitute Loan(s) shall be deemed to be a Discount Loan(s)
regardless of the Net Mortgage Rate thereof.

         TAX MATTERS PERSON: The Holder of the Class R Certificates issued
hereunder or any Permitted Transferee of such Class R Certificateholder shall be
the initial "tax matters person" for REMIC I, REMIC II, REMIC III and REMIC IV
within the meaning of Section 6231(a)(7) of the Code. For tax years commencing
after any transfer of the Class R Certificate, the holder of the greatest
Percentage Interest in the Class R Certificate at year end shall be designated
as the Tax Matters Person with respect to that year. If the Tax Matters Person
becomes a Disqualified Organization, the last preceding Holder of such
Authorized Denomination of the Class R Certificate that is not a Disqualified
Organization shall be Tax Matters Person pursuant to Section 5.3(e). If any
Person is appointed as tax matters person by the Internal Revenue Service
pursuant to the Code, such Person shall be Tax Matters Person.

         TERMINATION PRICE:  As defined in Section 9.1.

         TERMINATOR:  As defined in Section 9.1.

                                      -52-
<PAGE>

         TRANSFER: Any direct or indirect transfer, sale, pledge or other
disposition of, or directly or indirectly transferring, selling or pledging, any
Ownership Interest in a Class CE Certificate, Class P Certificate or Residual
Certificate.

         TRANSFEREE: Any Person who is acquiring by Transfer any Ownership
Interest in a Class CE Certificate, Class P Certificate or Residual Certificate.

         TRUST FUND: Collectively, all of the assets of REMIC I, REMIC II, REMIC
III and REMIC IV, and the Reserve Funds and any amounts on deposit therein and
any proceeds thereof, the Prepayment Charges and the Cap Contracts.

         TRUSTEE: HSBC Bank USA, a New York banking corporation, or its
successor in interest, or any successor trustee appointed as herein provided.

         UNCERTIFICATED ACCRUED INTEREST: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance or Uncertificated Notional Amount, as applicable, of such
REMIC Regular Interest. In each case, Uncertificated Accrued Interest will be
reduced by any Prepayment Interest Shortfalls, Curtailment Shortfalls and
shortfalls resulting from application of the Relief Act (allocated to such REMIC
Regular Interests as set forth in Sections 1.2 and 4.9).

         UNCERTIFICATED NOTIONAL AMOUNT: With respect to REMIC III Regular
Interest LTIII-IO-A and (i) each Distribution Date from and including the 1st
Distribution to and including the 6th Distribution Date, the aggregate
Uncertificated Principal Balances of REMIC I Regular Interest LTI-IO-1 through
REMIC I Regular Interest LTI-IO-4, (ii) each Distribution Date from and
including the 7th Distribution to and including the 18th Distribution Date, the
aggregate Uncertificated Principal Balances of REMIC I Regular Interest LTI-IO-2
through REMIC I Regular Interest LTI-IO-4, (iii) each Distribution Date from and
including the 19th Distribution Date to and including the 22nd Distribution
Date, the aggregate Uncertificated Principal Balances of REMIC I Regular
Interest LTI-IO-3 and REMIC I Regular Interest LTI-IO-4 and (iv) each
Distribution Date from and including the 23rd Distribution Date to and including
the 24th Distribution Date, the aggregate Uncertificated Principal Balance of
REMIC I Regular Interest LTI-IO-4, and (v) each Distribution Date thereafter,
$0.

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest (other than REMIC III Regular Interest LTIII-IO-A and REMIC III Regular
Interest LTIII-IO-B) the principal amount of such REMIC Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC Regular Interest shall be reduced by all
distributions of principal made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 4.9 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.2. The Uncertificated Principal Balance of each
REMIC Regular Interest shall never be less than zero. REMIC III Regular Interest
LTIII-IO-A and REMIC III Regular Interest LTIII-IO-B will not have
Uncertificated Principal Balances.

                                      -53-
<PAGE>

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: A per annum rate equal to the
average of the Net Mortgage Rates of the Group I Loans as of the first day of
the related Due Period, weighted on the basis of the Stated Principal Balances
as of the first day of the related Due Period.

         UNCERTIFICATED REMIC II PASS-THROUGH RATE: A per annum rate equal to
the average of the Net Mortgage Rates of the Group II Loans as of the first day
of the related Due Period, weighted on the basis of the Stated Principal
Balances as of the first day of the related Due Period.

         UNCERTIFICATED REMIC III PASS-THROUGH RATE: With respect to REMIC III
Regular Interest LTIII-1AA, REMIC III Regular Interest LTIII-1A1, REMIC III
Regular Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III
Regular Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III
Regular Interest LTIII-1A6, REMIC III Regular Interest LTIII-1A7, REMIC III
Regular Interest LTIII-1M1, REMIC III Regular Interest LTIII-1M2, REMIC III
Regular Interest LTIII-1M3 and REMIC III Regular Interest LTIII-1ZZ, a per annum
rate (but not less than zero) equal to the weighted average of: (x) with respect
to REMIC I Regular Interest LTI-1 and REMIC I Regular Interest LTI-P, the
Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest for
each such Distribution Date, and (y) with respect to REMIC I Regular Interest
LTI-IO-1 through REMIC I Regular Interest LTI-IO-4 for each Distribution Date
listed below, the weighted average of the rates listed below for each such REMIC
I Regular Interest listed below, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC I Regular Interest:
<TABLE>
<CAPTION>

-------------------- -------------------------------- -------------------------------------------------------------

 DISTRIBUTION DATE      REMIC I REGULAR INTERESTS                              RATE
-------------------- -------------------------------- -------------------------------------------------------------
<S>                  <C>                              <C>
         1           LTI-IO-1 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
         2           LTI-IO-1 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
         3           LTI-IO-1 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
         4           LTI-IO-1 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
         5           LTI-IO-1 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
         6           LTI-IO-1 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
         7           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
         8           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
         9           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        10           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        11           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        12           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 4.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        13           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        14           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        15           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        16           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1                         Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        17           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        18           LTI-IO-2 through LTI-IO-4        (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        19           LTI-IO-3 and LTI-IO-4            (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
</TABLE>


                                      -54-
<PAGE>

<TABLE>
<CAPTION>

-------------------- -------------------------------- -------------------------------------------------------------

 DISTRIBUTION DATE      REMIC I REGULAR INTERESTS                              RATE
-------------------- -------------------------------- -------------------------------------------------------------
<S>                  <C>                              <C>
        20           LTI-IO-3 and LTI-IO-4            (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        21           LTI-IO-3 and LTI-IO-4            (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        22           LTI-IO-3 and LTI-IO-4            (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1 and LTI-IO-2            Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        23           LTI-IO-4                         (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1, LTI-IO-2 and LTI-IO-3  Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
        24           LTI-IO-4                         (a) Uncertificated  REMIC I Pass-Through Rate over (b) 3.50%
-------------------- -------------------------------- -------------------------------------------------------------
                     LTI-IO-1, LTI-IO-2 and LTI-IO-3  Uncertificated REMIC I Pass-Through Rate
-------------------- -------------------------------- -------------------------------------------------------------
 25 and thereafter   LTI-IO-1,   LTI-IO-2,  LTI-IO-3  Uncertificated REMIC I Pass-Through Rate
                     and LTI-IO-4
-------------------- -------------------------------- -------------------------------------------------------------
</TABLE>


With resepect to REMIC III Regular Interest LTIII-1IO-A, (i) for the first
twelve distribution dates, 1.00% and (ii) thereafter, 0.00%. With respect to
REMIC III Regular Interest LTIII-1IO-B, (i) for the first twenty-four
distribution dates, 3.50% and (ii) thereafter, 0.00%.


With respect to REMIC III Regular Interest LTIII-2AA, REMIC III Regular Interest
LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III Regular Interest
LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2, REMIC III Regular Interest
LTIII-2MR3, REMIC III Regular Interest LTIII-2ZZ, REMIC III Regular Interest
LTIII-2P, REMIC III Regular Interest LTIII-2SUB1, REMIC III Regular Interest
LTIII-2SUB2 and REMIC III Regular Interest LTIII-2XX, the weighted average of
the Uncertificated REMIC III Pass-Through Rates on each REMIC III Regular
Interest, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC II Regular Interest.


With respect to REMIC III Regular Interest LTIII-2GRP1, the weighted average of
the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest
LTII-1, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest.


With respect to REMIC III Regular Interest LTIII-2GRP2, the weighted average of
the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest
LTII-2, weighted on the basis of the Uncertificated Principal Balance of such
REMIC II Regular Interest.

         UNCERTIFICATED REMIC REGULAR INTEREST: The REMIC I Regular Interests,
the REMIC II Regular Interests and the REMIC III Regular Interests.

         UNCOLLECTED INTEREST: With respect to any Distribution Date, the sum of
(i) the aggregate Prepayment Interest Shortfalls with respect to the Loans for
such Distribution Date and (ii) the aggregate Curtailment Shortfalls with
respect to the Loans for such Distribution Date.

         UNCOMPENSATED INTEREST SHORTFALL: For any Distribution Date, the
excess, if any, of (i) the sum of (a) the related Uncollected Interest for such
Distribution Date, and (b) any shortfall in interest collections for the Loans
in the calendar month immediately preceding such Distribution Date resulting
from a Relief Act Interest Shortfall over (ii) the aggregate Compensating
Interest



                                      -55-
<PAGE>

paid by the Servicers and the Master Servicer with respect to the Loans for such
Distribution Date, which excess shall be allocated to each Class of
Certificates, pro rata, according to the amount of interest accrued thereon in
reduction thereof.

         UNDERWRITER: Deutsche Bank Securities Inc.

         UNINSURED CAUSE: Any cause of damage to a Mortgaged Property such that
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.9.

         U.S. PERSON: A citizen or resident of the United States, a corporation
or partnership (including an entity treated as a corporation or partnership for
United States federal income tax purposes) created or organized in, or under the
laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more such U.S. Persons have the authority to control all substantial decisions
of the trust. To the extent prescribed in regulations by the Secretary of the
Treasury, which have not yet been issued, a trust which was in existence on
August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part 1 of subchapter J of chapter 1 of the Code), and which was
treated as a U.S. Person on August 20, 1996 may elect to continue to be treated
as a U.S. Person notwithstanding the previous sentence.

         WELLS FARGO: Wells Fargo Bank, N.A., or any successor thereto.

Section 1.2       ALLOCATION OF CERTAIN INTEREST SHORTFALL.

         For purposes of calculating the Interest Distribution Amount for the
Group I Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls and Curtailment Shortfalls with respect to the
Group I Loans, to the extent not covered by payment by the related Servicer
pursuant to the related Servicing Agreement or the Master Servicer pursuant to
Section 3.20, shall first reduce the related Net Monthly Excess Cashflow for
such Distribution Date, second, reduce the Interest Distribution Amount payable
to the Class I-CE Certificates, third, reduce the Interest Distribution Amount
payable to the Class I-M-3 Certificates, fourth, reduce the Interest
Distribution Amount payable to the Class I-M-2 Certificates, fifth, reduce the
Interest Distribution Amount payable to the Class I-M-1 Certificates and sixth,
reduce the Interest Distribution Amount payable to the Group I Senior
Certificates (on a pro rata basis based on their respective Senior Interest
Distribution Amounts before such reduction), in that order and (2) any Relief
Act Interest Shortfalls on the Group I Loans shall be allocated to the Group I
Certificates on a pro rata basis based on their respective Interest Distribution
Amount before such reduction.

         For purposes of calculating the Interest Distribution Amount for the
Group II Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls and Curtailment Shortfalls with respect to the
Group II Loans, to the extent not covered by payment by the related Servicer
pursuant to the related Servicing Agreement or the Master Servicer pursuant to
Section 3.20, shall first reduce the related Net Monthly Excess Cashflow for
such Distribution Date, second, reduce the Interest Distribution Amount payable
to the Class II-CE



                                      -56-
<PAGE>

Certificates, third, reduce the Interest Distribution Amount payable to the
Class II-MR-3 Certificates, fourth, reduce the Interest Distribution Amount
payable to the Class II-MR-2 Certificates, fifth, reduce the Interest
Distribution Amount payable to the Class II-MR-1 Certificates and sixth, with
respect to Prepayment Interest Shortfalls and Curtailment Shortfalls on the
Group II-1 Loans, reduce the Interest Distribution Amount payable to the Class
II-AR-1 Certificates and with respect to Prepayment Interest Shortfalls and
Curtailment Shortfalls on the Group II-2 Loans, reduce the Interest Distribution
Amount payable to the Class II-AR-2 Certificates, in that order and (2) any
Relief Act Interest Shortfalls on the Group II-1 Loans shall be allocated to the
Class II-AR-1 Certificates and the Group II Mezzanine Certificates on a pro rata
basis based on their respective Interest Distribution Amount before such
reduction, and any Relief Act Interest Shortfalls on the Group II-2 Loans shall
be allocated to the Group II-AR-2 Certificates and the Group II Mezzanine
Certificates on a pro rata basis based on their respective Interest Distribution
Amount before such reduction.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Unpaid Interest Shortfalls incurred in respect of the
Group I Loans for any Distribution Date shall be allocated first, to REMIC I
Regular Interest LTI-1 and REMIC I Regular Interest LTI-P, to the extent of one
month's interest at the then applicable respective Uncertificated REMIC I
Pass-Through Rate on the Uncertificated Principal Balance of each such REMIC I
Regular Interest; and then, to REMIC I Regular Interest LTI-IO-1, REMIC I
Regular Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3 and REMIC I Regular
Interest LTI-IO-4, in each case to the extent of one month's interest at the
then applicable respective Uncertificated REMIC I Pass-Through Rate on the
respective Uncertificated Notional Amount of each such REMIC I Regular Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date, the
aggregate amount of any Unpaid Interest Shortfalls incurred in respect of the
Group II Loans for any Distribution Date shall be allocated to REMIC II Regular
Interest LTII-1, REMIC II Regular Interest LTII-2 and REMIC II Regular Interest
LTII-P, to the extent of one month's interest at the then applicable respective
Uncertificated REMIC II Pass-Through Rate on the Uncertificated Principal
Balance of each such REMIC II Regular Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC III Group I Regular Interests for any Distribution Date,
the aggregate amount of any Unpaid Interest Shortfalls incurred in respect of
the Group I Loans for any Distribution Date shall be allocated first, to
Uncertificated Accrued Interest payable to REMIC III Regular Interest LTIII-1-AA
and REMIC III Regular Interest LTIII-1 ZZ up to an aggregate amount equal to the
REMIC III Group I Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC III Regular Interest LTIII-1A1, REMIC III Regular
Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III Regular
Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III Regular
Interest LTIII-1A6, REMIC III Regular Interest LTIII-1A7, REMIC III Regular
Interest LTIII-1M1, REMIC III Regular Interest LTIII-1M2, REMIC III Regular
Interest LTIII-1M3 and REMIC III Regular Interest LTIII-1ZZ, pro rata based on,
and to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC III Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC III Regular Interest.



                                      -57-
<PAGE>

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC III Group II Regular Interests for any Distribution Date:

                  (A) The REMIC III Group II Marker Allocation Percentage of the
aggregate amount of any Unpaid Interest Shortfalls incurred in respect of the
Group II Loans for any Distribution Date shall be allocated first, to
Uncertificated Accrued Interest payable to REMIC III Regular Interest LTIII-2AA
and REMIC III Regular Interest LTIII-2ZZ up to an aggregate amount equal to the
REMIC III Group II Interest Loss Allocation Amount, 98% and 2%, respectively,
and thereafter among, REMIC III Regular Interest LTIII-2AR1, REMIC III Regular
Interest LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular
Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3, REMIC III Regular
Interest LTIII-2ZZ, pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC III Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC III
Regular Interest; and

                  (B) The REMIC III Sub WAC Allocation Percentage of the
aggregate amount of any Unpaid Interest Shortfalls incurred in respect of the
Group II Loans for any Distribution Date shall be allocated to Uncertificated
Accrued Interest payable to REMIC III Regular Interest LTIII-2SUB1, REMIC III
Regular Interest LTIII-2GRP1, REMIC III Regular Interest LTIII-2SUB2, REMIC III
Regular Interest LTIII--2GRP2 and REMIC III Regular Interest LTIII-2XX, pro rata
based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC III Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC III Regular Interest.




                                      -58-
<PAGE>




                                   ARTICLE II
                            CONVEYANCE OF TRUST FUND;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.1 CONVEYANCE OF TRUST FUND. The Depositor, concurrently with
the execution and delivery hereof, does hereby transfer, assign, set over and
otherwise convey to the Trustee, on behalf of the Trust, without recourse, for
the benefit of the Certificateholders all the right, title and interest of the
Depositor, including any security interest therein for the benefit of the
Depositor, in and to the Loans identified on the Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement and the Assignment
Agreements (including, without limitation the right to enforce the obligations
of the other parties thereto thereunder), and all other assets included or to be
included in REMIC I and REMIC II. Such assignment includes all interest and
principal received by the Depositor or the applicable Servicer on or with
respect to the Loans (other than payments of principal and interest due on such
Loans on or before the Cut-Off Date). The Depositor herewith delivers to the
Trustee executed copies of the Mortgage Loan Purchase Agreement, the Servicing
Agreements and the Assignment Agreements.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Custodian pursuant to the
Custodial Agreement the documents with respect to each Loan as described under
Section 2 of the Custodial Agreement (the "Loan Documents"). In connection with
such delivery and as further described in the Custodial Agreement, the Custodian
will be required to review such Loan Documents and deliver to the Trustee, the
Depositor, the Master Servicer and the Seller certifications (in the forms
attached to the Custodial Agreement) with respect to such review with exceptions
noted thereon. In addition, the Depositor under the Custodial Agreement will
have to cure certain defects with respect to the Loan Documents for the related
Loans after the delivery thereof by the Depositor to the Custodian as more
particularly set forth therein.

         Section 2.2 ACCEPTANCE BY TRUSTEE.

         The Trustee acknowledges receipt, subject to the provisions of Section
2.1 hereof and Section 2 of the Custodial Agreement, of the Loan Documents and
all other assets included in the definitions of "REMIC I" and "REMIC II" under
clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into the
Distribution Accounts) and declares that it holds (or the Custodian on its
behalf holds) and will hold such documents and the other documents delivered to
it constituting a Loan Document, and that it holds (or the Custodian on its
behalf holds) or will hold all such assets and such other assets included in the
definitions of "REMIC I" and "REMIC II" in trust for the exclusive use and
benefit of all present and future Certificateholders.

         Section 2.3 REPURCHASE OR SUBSTITUTION OF LOANS.

         (a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of a breach
by the Seller of any representation, warranty or covenant under the Mortgage
Loan Purchase Agreement in respect of any Loan that materially and adversely
affects the value of such Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify the Seller of such defect,
missing document or breach and request that the Seller deliver such missing
document, cure such defect



                                      -59-
<PAGE>

or breach within 60 days from the date the Seller was notified of such missing
document, defect or breach, and if the Seller does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to repurchase such Loan from REMIC I or REMIC
II, as applicable at the Purchase Price within 90 days after the date on which
the Seller was notified of such missing document, defect or breach, if and to
the extent that the Seller is obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase Price for the repurchased Loan shall be
deposited in the related Distribution Account and the Trustee, upon receipt of
written certification from the Securities Administrator of such deposit and
receipt by the Custodian of a properly completed request for release for such
Loan in the form of EXHIBIT 3 to the Custodial Agreement, shall release or cause
the Custodian to release to the Seller the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as the Seller shall furnish
to it and as shall be necessary to vest in the Seller any Loan released pursuant
hereto, and the Trustee shall not have any further responsibility with regard to
such Mortgage File. In lieu of repurchasing any such Loan as provided above, if
so provided in the Mortgage Loan Purchase Agreement, the Seller may cause such
Loan to be removed from REMIC I or REMIC II (in which case it shall become a
Deleted Loan) and substitute one or more Substitute Loans in the manner and
subject to the limitations set forth in Section 2.3(b). It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Loan as to which a document is missing, a material defect in
a constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such omission, defect or
breach available to the Trustee and the Certificateholders.

                  In addition, should the Master Servicer become aware of or in
the event of its receipt of notice by a Responsible Officer of the Master
Servicer of the breach of the representation or covenant of the Seller set forth
in Section 5(x) of the Mortgage Loan Purchase Agreement which materially and
adversely affects the interests of a Holder of a Class P Certificate in any
Prepayment Charge, the Master Servicer shall promptly notify the Seller and the
Trustee of such breach. The Trustee shall enforce the obligations of the Seller
under the Mortgage Loan Purchase Agreement to remedy such breach to the extent
and in the manner set forth in the Mortgage Loan Purchase Agreement.

(b) Any substitution of Substitute Loans for Deleted Loans made pursuant to
Section 2.3(a) must be effected prior to the date which is two years after the
Startup Day for the REMIC I or REMIC II.

                  As to any Deleted Loan for which the Seller, substitutes a
Substitute Loan or Loans, such substitution shall be effected by the Seller
delivering to the Trustee or the Custodian on behalf of the Trustee, for such
Substitute Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2 of the Custodial Agreement,
as applicable, together with an Officers' Certificate providing that each such
Substitute Loan satisfies the definition thereof and specifying the Substitution
Shortfall Amount (as described below), if any, in connection with such
substitution. The Custodian on behalf of the Trustee shall acknowledge receipt
of such Substitute Loan or Loans and, within ten Business Days thereafter,
review such documents and deliver to the Depositor, the Trustee and the Master
Servicer, with respect to such



                                      -60-
<PAGE>

Substitute Loan or Loans, an initial certification pursuant to the Custodial
Agreement, with any applicable exceptions noted thereon. Within one year of the
date of substitution, the Custodian on behalf of the Trustee shall deliver to
the Depositor, the Trustee and the Master Servicer a final certification
pursuant to the Custodial Agreement with respect to such Substitute Loan or
Loans, with any applicable exceptions noted thereon. Monthly Payments due with
respect to Substitute Loans in the month of substitution are not part of REMIC I
or REMIC II and shall be retained by the Seller. For the month of substitution,
distributions to Certificateholders shall reflect the Monthly Payment due on
such Deleted Loan on or before the Due Date in the month of substitution, and
the Seller shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Loan. The Depositor shall give or cause to
be given written notice to the Certificateholders that such substitution has
taken place, shall amend the Loan Schedule to reflect the removal of such
Deleted Loan from the terms of this Agreement and the substitution of the
Substitute Loan or Loans and shall deliver a copy of such amended Loan Schedule
to the Trustee and the Master Servicer. Upon such substitution, such Substitute
Loan or Loans shall constitute part of the Trust Fund and shall be subject in
all respects to the terms of this Agreement and the Mortgage Loan Purchase
Agreement including all applicable representations and warranties thereof
included herein or in the Mortgage Loan Purchase Agreement.

                  For any month in which the Seller substitutes one or more
Substitute Loans for one or more Deleted Loans, the Master Servicer shall
determine the amount (the "Substitution Shortfall Amount"), if any, by which the
aggregate Purchase Price of all such Deleted Loans exceeds the aggregate of, as
to each such Substitute Loan, the Scheduled Principal Balance thereof as of the
Due Date in the month of substitution, together with one month's interest on
such Scheduled Principal Balance at the applicable Net Mortgage Rate, plus all
outstanding Advances and Servicing Advances (including Nonrecoverable Advances)
related thereto. On the date of such substitution, the Seller shall deliver or
cause to be delivered to the Securities Administrator for deposit in the related
Distribution Account an amount equal to the Substitution Shortfall Amount, if
any, and the Trustee or the Custodian on behalf of the Trustee, upon receipt of
the related Substitute Loan or Loans and certification by the Securities
Administrator of such deposit and receipt by the Custodian of a properly
completed request for release for such Loan in the form of EXHIBIT 3 to the
Custodial Agreement, shall release to the Seller the related Mortgage File or
Files and the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as the
Seller shall deliver to it and as shall be necessary to vest therein any Deleted
Loan released pursuant hereto.

                  In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on any REMIC,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding.

         (c) Upon discovery by the Depositor, the Seller, the Master Servicer or
the Trustee that any Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall
within two Business Days give written notice thereof to the other parties. In
connection therewith, the Seller shall repurchase or substitute one or more
Substitute Loans for the affected Loan within 90 days of the earlier of


                                      -61-
<PAGE>

discovery or receipt of such notice with respect to such affected Loan. Such
repurchase or substitution shall be made by (i) the Seller, if the affected
Loan's status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Seller under the Mortgage Loan
Purchase Agreement or (ii) the Depositor, if the affected Loan's status as a
non-qualified mortgage does not result from a breach of representation or
warranty. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.3(a). The Trustee shall reconvey to the Seller or the
Depositor the Loan to be released pursuant hereto in the same manner, and on the
same terms and conditions, as it would a Loan repurchased for breach of a
representation or warranty.

         (d) Within 90 days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.5 which
materially and adversely affects the interests of the Certificateholders in any
Loan or Prepayment Charge, the Master Servicer shall cure such breach in all
material respects.

         Section 2.4 AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF
CERTIFICATES AS REMIC REGULAR AND RESIDUAL INTERESTS.

         (a) The Trustee acknowledges the transfer to the extent provided herein
and assignment to it of the Trust Fund and, concurrently with such transfer and
assignment, has caused the Securities Administrator to execute and authenticate
and has delivered to or upon the order of the Depositor, in exchange for the
Trust Fund, Certificates evidencing the entire ownership of the Trust Fund.

         (b) This Agreement shall be construed so as to carry out the intention
of the parties that each of REMIC I, REMIC II, REMIC III and REMIC IV be treated
as a REMIC at all times prior to the date on which the Trust Fund is terminated.
The "regular interests" (within the meaning of Section 860G(a)(1) of the Code)
in REMIC IV shall consist of the Class A Certificates, the Class M Certificates,
the Class CE Certificates and the Class P Certificates. The "residual interest"
(within the meaning of Section 860G(a)(2) of the Code) in REMIC IV shall consist
of Component R-4. The "regular interests" (within the meaning of Section
860G(a)(1) of the Code) of REMIC III shall consist of the REMIC I Regular
Interests and REMIC II Regular Interests. The "residual interest" (within the
meaning of Section 860(G)(a)(2) of the Code) of REMIC III shall consist of
Component R-3. The "regular interests" (within the meaning of Section 860G(a)(1)
of the Code) of REMIC II shall consist of the REMIC II Regular Interests. The
"residual interest" (within the meaning of Section 860(G)(a)(2) of the Code) of
REMIC II shall consist of Component R-2. The "regular interests" (within the
meaning of Section 860G(a)(1) of the Code) of REMIC I shall consist of the REMIC
I Regular Interests. The "residual interest" (within the meaning of Section
860(G)(a)(2) of the Code) of REMIC I shall consist of Component R-1.

         Section 2.5 REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER.
                     -----------------------------------------------------

         The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee, the Certificateholders and the
Depositor that as of the Closing Date or as of such date specifically provided
herein:



                                      -62-
<PAGE>

          (i)  The Master Servicer is a national banking association duly
               formed, validly existing and in good standing under the laws of
               the United States of America and is duly authorized and qualified
               to transact any and all business contemplated by this Agreement
               to be conducted by the Master Servicer;

          (ii) The Master Servicer has the full power and authority to conduct
               its business as presently conducted by it and to execute, deliver
               and perform, and to enter into and consummate, all transactions
               contemplated by this Agreement. The Master Servicer has duly
               authorized the execution, delivery and performance of this
               Agreement, has duly executed and delivered this Agreement, and
               this Agreement, assuming due authorization, execution and
               delivery by the Depositor and the Trustee, constitutes a legal,
               valid and binding obligation of the Master Servicer, enforceable
               against it in accordance with its terms except as the
               enforceability thereof may be limited by bankruptcy, insolvency,
               reorganization or similar laws affecting the enforcement of
               creditors' rights generally and by general principles of equity;

          (iii) The execution and delivery of this Agreement by the Master
               Servicer, the consummation by the Master Servicer of any other of
               the transactions herein contemplated, and the fulfillment of or
               compliance with the terms hereof are in the ordinary course of
               business of the Master Servicer and will not (A) result in a
               breach of any term or provision of charter and by-laws of the
               Master Servicer or (B) conflict with, result in a breach,
               violation or acceleration of, or result in a default under, the
               terms of any other material agreement or instrument to which the
               Master Servicer is a party or by which it may be bound, or any
               statute, order or regulation applicable to the Master Servicer of
               any court, regulatory body, administrative agency or governmental
               body having jurisdiction over the Master Servicer; and the Master
               Servicer is not a party to, bound by, or in breach or violation
               of any indenture or other agreement or instrument, or subject to
               or in violation of any statute, order or regulation of any court,
               regulatory body, administrative agency or governmental body
               having jurisdiction over it, which materially and adversely
               affects or, to the Master Servicer's knowledge, would in the
               future materially and adversely affect, (x) the ability of the
               Master Servicer to perform its obligations under this Agreement
               or (y) the business, operations, financial condition, properties
               or assets of the Master Servicer taken as a whole;

          (iv) The Master Servicer does not believe, nor does it have any reason
               or cause to believe, that it cannot perform each and every
               covenant made by it and contained in this Agreement;

          (v)  No litigation is pending against the Master Servicer that would
               materially and adversely affect the execution, delivery or
               enforceability of this Agreement or the ability of the Master
               Servicer to perform any of its other obligations hereunder in
               accordance with the terms hereof,

          (vi) There are no actions or proceedings against, or investigations
               known to it of, the Master Servicer before any court,
               administrative or other tribunal (A) that might prohibit its
               entering into this Agreement, (B) seeking to prevent the
               consummation of the transactions contemplated by this Agreement
               or (C) that might



                                      -63-
<PAGE>

               prohibit or materially and adversely affect the performance by
               the Master Servicer of its obligations under, or validity or
               enforceability of, this Agreement; and

         (vii) No consent, approval, authorization or order of any court or
               governmental agency or body is required for the execution,
               delivery and performance by the Master Servicer of, or compliance
               by the Master Servicer with, this Agreement or the consummation
               by it of the transactions contemplated by this Agreement, except
               for such consents, approvals, authorizations or orders, if any,
               that have been obtained prior to the Closing Date.

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.5 shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders.

         Section 2.6 ESTABLISHMENT OF THE TRUST.

         The Depositor does hereby establish, pursuant to the further provisions
of this Agreement and the laws of the State of New York, an express trust to be
known, for convenience, as "Deutsche Mortgage Securities, Inc., Mortgage Loan
Trust, Series 2004-3" and does hereby appoint HSBC Bank USA, as Trustee in
accordance with the provisions of this Agreement.



                                      -64-
<PAGE>




                                  ARTICLE III
               ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS

         Section 3.1 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Loans in accordance with the terms of the applicable Servicing
Agreement and shall have full power and authority to do any and all things which
it may deem necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with each Servicer as
necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other
data provided to the Master Servicer by each Servicer and shall cause each
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the applicable Servicing Agreement.
The Master Servicer shall independently and separately monitor each Servicer's
servicing activities with respect to each related Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information,
prepare the statements specified in Section 4.6 and any other information and
statements required to be provided by the Master Servicer hereunder. The Master
Servicer shall reconcile the results of its Loan monitoring with the actual
remittances of the Servicers to the related Distribution Account pursuant to the
applicable Servicing Agreements.

         Notwithstanding anything in this Agreement or any Servicing Agreement
to the contrary, the Master Servicer shall not have any duty or obligation to
enforce any Credit Risk Management Agreement that a Servicer is a party to (a
"Servicer Credit Risk Management Agreement") or to supervise, monitor or oversee
the activities of the Credit Risk Manager under any such Servicer Credit Risk
Management Agreement with respect to any action taken or not taken by the
applicable Servicer pursuant to a recommendation of the Credit Risk Manager.

         The Trustee shall furnish the Servicers and the Master Servicer with
any limited powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicers and the Master Servicer to
service or master service and administer the related Loans and REO Property. The
Trustee shall have no responsibility for any action of the Master Servicer or
any Servicer pursuant to any such limited power of attorney and shall be
indemnified by the Master Servicer or such Servicer for any cost, liability or
expense arising from the misuse thereof by the Master Servicer or such Servicer.

         The Trustee, the Custodian and the Securities Administrator shall
provide access to the records and documentation in possession of the Trustee,
the Custodian or the Securities Administrator regarding the related Loans and
REO Property and the servicing thereof to the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon reasonable prior written request and during normal business hours at
the office of the Trustee, the Custodian or the Securities Administrator;
provided, however, that, unless otherwise required by law, none of the Trustee,
the Custodian or the Securities Administrator shall be required to provide
access to such records and documentation if the



                                      -65-
<PAGE>

provision thereof would violate the legal right to privacy of any Mortgagor. The
Trustee, the Custodian and the Securities Administrator shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at a charge that
covers the Trustee's, the Custodian's or the Securities Administrator's actual
costs.

         The Trustee shall execute and deliver to the related Servicer or the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable and, in each case, provided to the
Trustee by such Servicer or Master Servicer to (i) the foreclosure or trustee's
sale with respect to a Mortgaged Property; (ii) any legal action brought to
obtain judgment against any Mortgagor on the Mortgage Note or any other Loan
Document; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or any other
Loan Document or otherwise available at law or equity.

         Section 3.2 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall treat such REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the related Servicer or the Master Servicer to assure
such continuing treatment. In particular, the Trustee shall not (a) sell or
permit the sale of all or any portion of the Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Loans pursuant to this Agreement or the Trustee has received an Opinion of
Counsel stating that such sale will not result in an Adverse REMIC Event as
defined in Section 10.1(f) hereof prepared at the expense of the Trust Fund; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreements, the Assignment Agreements or Section 2.3 of this Agreement,
as applicable, accept any contribution to any REMIC after the Startup Day
without receipt of an Opinion of Counsel stating that such contribution will not
result in an Adverse REMIC Event as defined in Section 10.1(f) hereof.

         Section 3.3 MONITORING OF SERVICERS.

         (a) The Master Servicer shall be responsible for monitoring the
compliance by each Servicer with its duties under the related Servicing
Agreement. In the review of each Servicer's activities, the Master Servicer may
rely upon an officer's certificate of any Servicer with regard to such
Servicer's compliance with the terms of its Servicing Agreement. In the event
that the Master Servicer, in its judgment, determines that a Servicer should be
terminated in accordance with its Servicing Agreement, or that a notice should
be sent pursuant to such Servicing Agreement with respect to the occurrence of
an event that, unless cured, would constitute grounds for such termination, the
Master Servicer shall notify the Seller and the Trustee thereof and the Master
Servicer shall issue such notice or take such other action as it deems
appropriate.

         (b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Loans or to cause the
Trustee to enter in to a new Servicing Agreement with a successor Servicer
selected by the



                                      -66-
<PAGE>

Master Servicer; provided, however, it is understood and acknowledged by the
parties hereto that there will be a period of transition (not to exceed 90 days)
before the actual servicing functions can be fully transferred to such successor
Servicer. Such enforcement, including, without limitation, the legal prosecution
of claims, termination of Servicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer, in its good faith business judgment,
would require were it the owner of the related Loans. The Master Servicer shall
pay the costs of such enforcement at its own expense, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except to
the extent that the Master Servicer shall have received indemnity reasonably
acceptable to it for its costs and expenses in pursuing such action.

         (c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor servicer to service the
Loans in accordance with the related Servicing Agreement) are not fully and
timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the related
Distribution Account.

         (d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.

         (e) If the Master Servicer acts as Servicer, it shall not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.

         Section 3.4 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy that would meet the requirements of Fannie Mae or Freddie Mac, affording
coverage with respect to all directors, officers, employees and other Persons
acting on such Master Servicer's behalf, and covering errors and omissions in
the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees. Any such errors and omissions policy and fidelity bond may not be
cancelable without thirty (30) days' prior written notice to the Trustee.

         Section 3.5 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Loans and shall have full power and authority, subject to the REMIC
Provisions and the provisions of Article X hereof, to do any and all things that
it may deem necessary or desirable in connection with the master servicing and
administration of the Loans, including but not limited to the power and
authority (i) to execute and deliver, on behalf of the Certificateholders and
the Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related



                                      -67-
<PAGE>

Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds, and
(iv) to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Loan, in each case, in accordance with the
provisions of this Agreement and the related Servicing Agreement, as applicable;
provided, however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.3, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause REMIC I, REMIC II REMIC III or REMIC IV
to fail to qualify as a REMIC or result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) unless the Master Servicer, the
Securities Administrator has received an Opinion of Counsel (but not at the
expense of the Master Servicer, the Securities Administrator) to the effect that
the contemplated action will not cause REMIC I, REMIC II, REMIC III or REMIC IV
to fail to qualify as a REMIC or result in the imposition of a tax upon REMIC I,
REMIC II, REMIC III or REMIC IV, as the case may be. The Trustee shall furnish
the Master Servicer, upon written request from a Servicing Officer, with any
powers of attorney empowering the Master Servicer or any Servicer to execute and
deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the
Loans or the Mortgaged Property, in accordance with the applicable Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer or applicable Servicer may request, to
enable the Master Servicer to master service and administer the Loans and carry
out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for the misuse of
any such powers of attorney by the Master Servicer or any Servicer and shall be
indemnified by the Master Servicer or such Servicer for any costs, liabilities
or expenses incurred by the Trustee in connection with such misuse). If the
Master Servicer or the Trustee has been advised that it is likely that the laws
of the state in which action is to be taken prohibit such action if taken in the
name of the Trustee or that the Trustee would be adversely affected under the
"doing business" or tax laws of such state if such action is taken in its name,
the Master Servicer shall join with the Trustee in the appointment of a
co-trustee pursuant to Section 8.10 hereof. In the performance of its duties
hereunder, the Master Servicer shall be an independent contractor and shall not,
except in those instances where it is taking action authorized pursuant to this
Agreement to be taken by it in the name of the Trustee, be deemed to be the
agent of the Trustee.

         Section 3.6 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the applicable Servicing Agreement and to the extent Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicers
to enforce such clauses in accordance with the applicable Servicing Agreement.
If applicable law prohibits the enforcement of a due-on-sale clause or such
clause is otherwise not enforced in accordance with the applicable Servicing
Agreement, and, as a consequence, a Loan is assumed, the original Mortgagor may
be released from liability in accordance with the applicable Servicing
Agreement.

                                      -68-
<PAGE>

         Section 3.7 RELEASE OF MORTGAGE FILES.

         (a) Upon becoming aware of the payment in full of any Loan, or the
receipt by any Servicer of a notification that payment in full has been escrowed
in a manner customary for such purposes for payment to Certificateholders on the
next Distribution Date, the applicable Servicer will (or if the Servicer does
not, the Master Servicer may), if required under the applicable Servicing
Agreement, promptly furnish to the Custodian, on behalf of the Trustee, two
copies of a request for release substantially in the form attached to the
Custodial Agreement, and signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained by
the applicable Servicer pursuant to its Servicing Agreement have been or will be
so deposited) and shall request that the Custodian, on behalf of the Trustee,
deliver to the applicable Servicer the related Mortgage File. Upon receipt of
such certification and request, the Custodian, on behalf of the Trustee, shall
promptly release the related Mortgage File to the applicable Servicer and the
Trustee and Custodian shall have no further responsibility with regard to such
Mortgage File. Upon any such payment in full, each Servicer is authorized to
give, as agent for the Trustee, as the mortgagee under the Mortgage that secured
the Loan, an instrument of satisfaction (or assignment of mortgage without
recourse) regarding the Mortgaged Property subject to the Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of such
payment, it being understood and agreed that no expenses incurred in connection
with such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the related Distribution Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian, on
behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form attached to the Custodial Agreement
(or in a mutually agreeable electronic format which will, in lieu of a signature
on its face, originate from a Servicing Officer), release the related Mortgage
File held in its possession or control to the Servicer or the Master Servicer,
as applicable. Such request for release shall obligate the Servicer or the
Master Servicer to return the Mortgage File to the Custodian on behalf of the
Trustee, when the need therefor by the Servicer or the Master Servicer no longer
exists unless the Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the Custodian, on behalf of the Trustee, to
the Servicer or the Master Servicer.

Section 3.8       DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER
                  -------------------------------------------------------------
                  TO BE HELD FOR TRUSTEE.
                  -----------------------

         (a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer



                                      -69-
<PAGE>

from time to time as are required by the terms hereof, or in the case of the
Servicers, the applicable Servicing Agreement, to be delivered to the Trustee or
Custodian. Any funds received by the Master Servicer or by a Servicer in respect
of any Loan or which otherwise are collected by the Master Servicer or by a
Servicer as Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries in
respect of any Loan shall be held for the benefit of the Trustee and the related
Certificateholders subject to the Master Servicer's right to retain or withdraw
from the related Distribution Account the Master Servicing Compensation and
other amounts provided in this Agreement, and to the right of each Servicer to
retain its Servicing Fee and other amounts as provided in the applicable
Servicing Agreement. The Master Servicer shall, and (to the extent provided in
the applicable Servicing Agreement) shall cause each Servicer to, provide access
to information and documentation regarding the Loans to the Trustee, its agents
and accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the OTS, the FDIC and the supervisory agents and
examiners of such Office and Corporation or examiners of any other federal or
state banking or insurance regulatory authority if so required by applicable
regulations of the OTS or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.

         (b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the related Certificateholders and shall be and remain the sole
and exclusive property of the Trustee; provided, however, that the Master
Servicer and each Servicer shall be entitled to setoff against, and deduct from,
any such funds any amounts that are properly due and payable to the Master
Servicer or such Servicer under this Agreement or the applicable Servicing
Agreement.

Section 3.9       STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
                  ------------------------------------------------------

         (a) For each Loan, the Master Servicer shall enforce any obligation of
the Servicers under the related Servicing Agreements to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of the related Servicing
Agreements. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in the applicable
Servicing Agreement and that no earthquake or other additional insurance is to
be required of any Mortgagor or to be maintained on property acquired in respect
of a defaulted loan, other than pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional insurance.

         (b) Pursuant to Section 3.23, any amounts collected by the Master
Servicer, or by any Servicer, under any insurance policies (other than amounts
to be applied to the restoration or repair of the property subject to the
related Mortgage or released to the Mortgagor in accordance with the applicable
Servicing Agreement) shall be deposited into the related Distribution Account,
subject to withdrawal pursuant to Section 3.24. Any cost incurred by the Master
Servicer or any Servicer in maintaining any such insurance if the Mortgagor
defaults



                                      -70-
<PAGE>

in its obligation to do so shall be added to the amount owing under the Loan
where the terms of the Loan so permit; provided, however, that the addition of
any such cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 3.24.

         Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the related Certificateholders all claims under any insurance
policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in the
related Distribution Account upon receipt, except that any amounts realized that
are to be applied to the repair or restoration of the related Mortgaged Property
as a condition precedent to the presentation of claims on the related Loan to
the insurer under any applicable insurance policy need not be so deposited (or
remitted).

         Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
                      ------------------------------------------------------

         (a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any primary mortgage
insurance policy or any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause each Servicer (to the extent required under
the related Servicing Agreement) to keep in force and effect (to the extent that
the Loan requires the Mortgagor to maintain such insurance), primary mortgage
insurance applicable to each Loan in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) to, cancel or refuse to renew any primary
mortgage insurance policy that is in effect at the date of the initial issuance
of the Mortgage Note and is required to be kept in force hereunder except in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable.

         (b) The Master Servicer agrees to cause each Servicer (to the extent
required under the related Servicing Agreement) to present, on behalf of the
Trustee and the related Certificateholders, claims to the insurer under any
primary mortgage insurance policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any primary mortgage
insurance policies respecting defaulted Loans. Pursuant to Section 3.22 and
3.23, any amounts collected by the Master Servicer or any Servicer under any
primary mortgage insurance policies shall be deposited by the related Servicer
in its Protected Account or by the Master Servicer in the related Distribution
Account, subject to withdrawal pursuant to Sections 3.22 or 3.24, as applicable.

Section 3.12      TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND
                  --------------------------------------------------------------
                  DOCUMENTS.
                  ----------

                  The Trustee or the applicable Custodian, shall retain
possession and custody of the originals (to the extent available) of any primary
mortgage insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued



                                      -71-
<PAGE>

from time to time as contemplated by this Agreement. Until all amounts
distributable in respect of the Group I Certificates and Group II Certificates
have been distributed in full and the Master Servicer otherwise has fulfilled
its obligations under this Agreement, the Trustee or the Custodian shall also
retain possession and custody of each related Mortgage File in accordance with
and subject to the terms and conditions of this Agreement and the Custodial
Agreement. The Master Servicer shall promptly deliver or cause to be delivered
to the Trustee or the Custodian, upon the execution or receipt thereof the
originals of any primary mortgage insurance policies, any certificates of
renewal, and such other documents or instruments that constitute Loan Documents
that come into the possession of the Master Servicer from time to time.

Section 3.13 REALIZATION UPON DEFAULTED LOANS. The Master Servicer shall cause
each Servicer (to the extent required under the related Servicing Agreement) to
foreclose upon, repossess or otherwise comparably convert the ownership of
Mortgaged Properties securing such of the Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, all in accordance with the applicable Servicing
Agreement.

         Section 3.14 COMPENSATION FOR THE MASTER SERVICER.

         (a) In addition to the Master Servicer's right to receive its Master
Servicing Fee, all income and gain realized from any investment of funds in each
Distribution Account shall be for the benefit of the Master Servicer as
compensation. Servicing compensation in the form of assumption fees, if any,
late payment charges, as collected, if any, or otherwise (but not including any
Prepayment Charges) shall be retained by the applicable Servicer and shall not
be deposited in the Protected Account. The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor except as provided in this
Agreement.

         (b) The amount of the aggregate compensation payable as set forth in
Section 3.14(a) (the "Master Servicing Compensation") to the Master Servicer in
respect of any Distribution Date shall be reduced in accordance with Section
3.20.

         Section 3.15 REO PROPERTY.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Loan, the deed or certificate of sale shall be issued
to the Trustee, or to its nominee, on behalf of the related Certificateholders.
The Master Servicer shall, to the extent provided in the applicable Servicing
Agreement, cause the applicable Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. Further, the
Master Servicer shall, to the extent provided in the related Servicing
Agreement, cause the applicable Servicer to sell any REO Property prior to three
years after the end of the calendar year of its acquisition by REMIC I or REMIC
II, as applicable, unless (i) the Trustee and the Securities Administrator shall
have been supplied with an Opinion of Counsel to the effect that the holding by
the Trust Fund of such REO Property subsequent to such three-year period will
not result in the imposition of taxes on "prohibited transactions" of any REMIC
hereunder as defined in section 860F of the Code or cause any REMIC hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding, in
which case the Trust Fund may continue to hold such Mortgaged Property




                                      -72-
<PAGE>

(subject to any conditions contained in such Opinion of Counsel) or (ii) the
applicable Servicer shall have applied for, prior to the expiration of such
three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Master Servicer
shall cause the applicable Servicer (to the extent provided in the related
Servicing Agreement) to protect and conserve, such REO Property in the manner
and to the extent required by the applicable Servicing Agreement, in accordance
with the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

                  (b) The Master Servicer shall, to the extent required by the
related Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.

                  (c) The Master Servicer and the applicable Servicer, upon the
final disposition of any REO Property, shall be entitled to reimbursement for
any related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid Servicing Fees may be reimbursed or paid, as the
case may be, prior to final disposition, out of any net rental income or other
net amounts derived from such REO Property.

                  (d) To the extent provided in the related Servicing Agreement,
the Liquidation Proceeds from the final disposition of the REO Property, net of
any payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Distribution Account on the next succeeding Remittance Date.

         Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

                  (a) The Master Servicer shall deliver to the Trustee, Ambac
and the Rating Agencies on or before March 15 of each year, commencing on March
15, 2005, an Officer's Certificate signed by a Servicing Officer, certifying
that with respect to the period ending December 31 of the prior year: (i) such
Servicing Officer has reviewed the activities of such Master Servicer during the
preceding calendar year or portion thereof and its performance under this
Agreement, (ii) to the best of such Servicing Officer's knowledge, based on such
review, such Master Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement in all material respects
throughout such year, or, if there has been a default in the fulfillment of any
such duties, responsibilities or obligations, specifying each such default known
to such Servicing Officer and the nature and status thereof, (iii) nothing has
come to the attention of such Servicing Officer to lead such Servicing Officer
to believe that any Servicer has failed to perform any of its duties,
responsibilities and obligations under its Servicing Agreement in all material
respects throughout such year, or, if there has been a material default in the
performance or fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof.



                                      -73-
<PAGE>

                  (b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).

         Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Loans, then the Master Servicer at its expense shall cause a nationally
recognized firm of independent certified public accountants to furnish a
statement to the Trustee, the Rating Agencies, Ambac and the Seller on or before
March 15 of each year, commencing on March 15, 2005 to the effect that, with
respect to the most recently ended fiscal year, such firm has examined certain
records and documents relating to the Master Servicer's performance of its
servicing obligations under this Agreement and pooling and servicing and trust
agreements in material respects similar to this Agreement and to each other and
that, on the basis of such examination conducted substantially in compliance
with the audit program for mortgages serviced for Freddie Mac or the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of the opinion
that the Master Servicer's activities have been conducted in compliance with
this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies (unless
(i) the Master Servicer shall have failed to provide the Trustee with such
statement or (ii) the Trustee shall be unaware of the Master Servicer's failure
to provide such statement). If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee whether such exceptions
have been or are susceptible of cure, and shall take prompt action to do so.

         Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.

                  (a) Within 15 days after each Distribution Date, the Master
Servicer shall, in accordance with industry standards, file with the Commission
via the Electronic Data Gathering and Retrieval System ("EDGAR"), a Form 8-K
with a copy of the statement to be furnished by the Securities Administrator to
the Certificateholders for such Distribution Date as an exhibit thereto. Prior
to January 30, 2005, the Master Servicer shall, in accordance with industry
standards, file a Form 15 Suspension Notice with respect to the Trust Fund, if
applicable. Prior to March 30, 2005 and annually thereafter (if required), the
Master Servicer shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include, to the
extent available, as exhibits (i) each applicable Servicer's annual statement of
compliance described under the related Servicing Agreement, (ii) each applicable
Servicer's accountant's report described under the related Servicing Agreement,
(iii) the Master Servicer's accountant's report described in Section 3.17, if
applicable, in each case to the extent timely delivered, if applicable, to the
Master Servicer, and (iv) a written certification signed by an officer of the
Master Servicer that complies with the Sarbanes-Oxley Act of 2002 as in effect
on the date of this Agreement and the February 3, 2003, Statement by the Staff
of the Division of




                                      -74-
<PAGE>

Corporation Finance of the Commission Regarding Compliance by Asset-Backed
Issuers with Exchange Act Rules 13a-14 and 15d-14 as in effect as of the date of
this Agreement. The Depositor hereby grants to the Master Servicer a limited
power of attorney to execute and file each Form 8-K and Form 10-K on behalf of
the Depositor. Such power of attorney shall continue until either the earlier of
(i) receipt by the Master Servicer from the Depositor of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The Depositor
and the Trustee each agree to promptly furnish to the Master Servicer, from time
to time upon request, such further information, reports and financial statements
within its control related to this Agreement and the Loans as the Master
Servicer reasonably deems appropriate to prepare and file all necessary reports
with the Commission. The Master Servicer shall cooperate with the Depositor in
connection with any additional filings with respect to the Trust Fund as the
Depositor deems necessary under the Exchange Act. Copies of all reports filed by
the Master Servicer under the Exchange Act shall be sent to the Depositor.

                  (b) The Master Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Master Servicer's
obligations under this Section 3.18 or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith. Fees and expenses incurred
by the Master Servicer in connection with this Section 3.18 shall not be
reimbursable from the Trust Fund.

         Section 3.19 UCC. The Depositor shall file any financing statements or
amendments thereto required by any change in the Uniform Commercial Code. The
Depositor agrees to file continuation statements for any such Uniform Commercial
Code financing statements which the Seller or the Depositor filed in connection
with the Trust Fund.

         Section 3.20 OBLIGATION OF THE MASTER SERVICER IN RESPECT OF
COMPENSATING INTEREST. The Master Servicer shall deposit in the related
Distribution Account not later than each related Distribution Account Deposit
Date an amount equal to the lesser of (i) the aggregate amounts required to be
paid by the related Servicer under the related Servicing Agreement with respect
to Compensating Interest on the related Loans for the related Distribution Date,
and not so paid by such Servicer and (ii) the Master Servicing Fee with respect
to the related Loan Group for such Distribution Date, without reimbursement
therefor.

         Section 3.21 RESERVED.

         Section 3.22 PROTECTED ACCOUNTS.

                  (a) The Master Servicer shall enforce the obligation of each
Servicer to establish and maintain a Protected Account in accordance with the
applicable Servicing Agreement, with records to be kept with respect thereto on
a Loan by Loan basis, into which accounts shall be deposited within 48 hours (or
as of such other time specified in the related Servicing Agreement) of receipt
all collections of principal and interest on any Loan and with respect to any
REO Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries and advances made from the
Servicer's own funds (less servicing compensation as permitted by the applicable
Servicing Agreement in the case of any Servicer) and all other amounts to be
deposited in the Protected Account. Each



                                      -75-
<PAGE>

Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by the related
Servicing Agreement. To the extent provided in the related Servicing Agreement,
the Protected Account shall be held in a depository institution and segregated
on the books of such institution in the name of the Trustee for the benefit of
the related Certificateholders.

                  (b) To the extent provided in the related Servicing Agreement,
amounts on deposit in a Protected Account may be invested in Eligible
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds, such Eligible Investments to mature, or to be subject to redemption
or withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the related Distribution Account, and shall be held
until required for such deposit. The income earned from Eligible Investments
made pursuant to this Section 3.22 shall be paid to the related Servicer under
the applicable Servicing Agreement, and amounts required to be distributed to
the Certificateholders resulting from the loss of monies from such investments
shall be borne by and be the risk of the related Servicer. The related Servicer
(to the extent provided in the Servicing Agreement) shall deposit the amount of
any such loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.

                  (c) To the extent provided in the related Servicing Agreement
and subject to this Article III, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited in the
related Distribution Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Loans due
on or before the Cut-Off Date):

                  (i) Monthly Payments on the Loans received or any related
         portion thereof advanced by the Servicers pursuant to the Servicing
         Agreements which were due on or before the related Due Date, net of the
         amount thereof comprising the Servicing Fees;

                  (ii) Principal Prepayments, Liquidation Proceeds, Insurance
         Proceeds and Subsequent Recoveries received by the Servicers with
         respect to such Loans in the related Prepayment Period, Compensating
         Interest and the amount of any related Prepayment Charges; and

                  (iii) Any amount to be used as an Advance.

                  (d) Withdrawals may be made from an Account only to make
remittances as provided in Section 3.22(c), 3.23 and 3.24 or as otherwise
provided in the Servicing Agreements; to reimburse the Master Servicer or a
Servicer for Advances which have been recovered by subsequent collection from
the related Mortgagor; to remove amounts deposited in error; to remove fees,
charges or other such amounts deposited on a temporary basis; or to clear and
terminate the account at the termination of this Agreement in accordance with
Section 9.1. As provided in Sections 3.22(c) and 3.23(b) or as otherwise
provided in the Servicing Agreements



                                      -76-
<PAGE>

certain amounts otherwise due to the Servicers may be retained by them and need
not be deposited in the related Distribution Account.

                  Section 3.23 DISTRIBUTION ACCOUNTS.

                  (a) The Securities Administrator shall establish and maintain,
for the benefit of the Certificateholders, a Distribution Account with respect
to the Group I Loans and a Distribution Account with respect to the Group II
Loans, in each case as a segregated trust account or accounts. The Master
Servicer shall deposit in the related Distribution Account as identified by the
Master Servicer and as received by the Master Servicer, the following amounts
with respect to the related Loan Group:

                  (i) Any amounts withdrawn from a Protected Account;

                  (ii) Any Advance and any amounts in respect of Prepayment
         Interest Shortfalls or Curtailment Shortfalls;

                  (iii) Any Insurance Proceeds, Liquidation Proceeds, or
         Subsequent Recoveries received by or on behalf of the Master Servicer;

                  (iv) The Purchase Price with respect to any Loans purchased by
         the Seller pursuant to Section 2.3 and all proceeds of any Loans or
         property acquired with respect thereto purchased by the Master Servicer
         pursuant to Section 9.1;

                  (v) Any amounts required to be deposited by the Master
         Servicer or any Servicer with respect to losses on investments of
         deposits in an Account; and

                  (vi) Any other amounts received by or on behalf of the Master
         Servicer and required to be deposited in a Distribution Account
         pursuant to this Agreement.

                  (b) All amounts deposited to a Distribution Account shall be
held by the Securities Administrator in trust for the benefit of the related
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the related Distribution Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges or
assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges, need not be credited by
the Master Servicer or the related Servicer to the related Distribution Account.
In the event that the Master Servicer shall deposit or cause to be deposited to
a Distribution Account any amount not required to be credited thereto, the
Securities Administrator, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.

                  (c) The Distribution Accounts shall constitute trust accounts
of the Trust Fund segregated on the books of the Securities Administrator and
held by the Securities Administrator in trust in its Corporate Trust Office, and
the Distribution Accounts and the funds deposited therein shall not be subject
to, and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Securities Administrator (whether made directly,
or indirectly



                                      -77-
<PAGE>

through a liquidator or receiver of the Securities Administrator). The amount at
any time credited to the Distribution Accounts shall be invested in the name of
the Master Servicer, in such Eligible Investments selected by the Master
Servicer or deposited in demand deposits with such depository institutions as
selected by the Master Servicer, provided that time deposits of such depository
institutions would be an Eligible Investment. All Eligible Investments shall
mature or be subject to redemption or withdrawal on or before, and shall be held
until, the Distribution Date following the date of the investment of such funds
(the "Investment Withdrawal Distribution Date") if the obligor for such Eligible
Investment is the Securities Administrator or, if such obligor is any other
Person, the Business Day preceding such Investment Withdrawal Distribution Date.
All investment earnings on amounts on deposit in the Distribution Accounts from
time to time shall be for the account of the Master Servicer. The Master
Servicer shall be permitted to receive distribution of any and all investment
earnings from the Distribution Accounts on each Distribution Date. If there is
any loss on an Eligible Investment or demand deposit, the Master Servicer shall
deposit such amount in the related Distribution Account. With respect to each
Distribution Account and the funds deposited therein, the Securities
Administrator shall take such action as may be necessary to ensure that the
related Certificateholders shall be entitled to the priorities afforded to such
a trust account (in addition to a claim against the estate of the Securities
Administrator) as provided by 12 U.S.C. ss. 92a(e), and applicable regulations
pursuant thereto, if applicable, or any applicable comparable state statute
applicable to state chartered banking corporations.

         Section 3.24 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNTS.

                  (a) The Securities Administrator shall, from time to time on
demand of the Master Servicer make or cause to be made such withdrawals or
transfers from the related Distribution Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to the Servicing Agreements
with respect to the related Loans for the following purposes, not in any order
of priority:

                  (i) to reimburse the Master Servicer or any Servicer for any
         Advance of its own funds, the right of the Master Servicer or a
         Servicer to reimbursement pursuant to this subclause (i) being limited
         to amounts received on a particular Loan (including, for this purpose,
         the Purchase Price therefor, Insurance Proceeds and Liquidation
         Proceeds) which represent late payments or recoveries of the principal
         of or interest on such Loan respecting which such Advance was made;

                  (ii) to reimburse the Master Servicer or any Servicer from
         Insurance Proceeds or Liquidation Proceeds relating to a particular
         Loan for amounts expended by the Master Servicer or such Servicer in
         good faith in connection with the restoration of the related Mortgaged
         Property which was damaged by an Uninsured Cause or in connection with
         the liquidation of such Loan;

                  (iii) to reimburse the Master Servicer or any Servicer from
         Insurance Proceeds relating to a particular Loan for insured expenses
         incurred with respect to such Loan and to reimburse the Master Servicer
         or such Servicer from Liquidation Proceeds from a particular Loan for
         Liquidation Expenses incurred with respect to such Loan;



                                      -78-
<PAGE>

                  (iv) to pay the Master Servicer or any Servicer, as
         appropriate, from Liquidation Proceeds or Insurance Proceeds received
         in connection with the liquidation of any Loan, the amount which it or
         such Servicer would have been entitled to receive under subclause (vii)
         of this Subsection (a) as servicing compensation on account of each
         defaulted scheduled payment on such Loan if paid in a timely manner by
         the related Mortgagor;

                  (v) to pay the Master Servicer or any Servicer from the
         Purchase Price for any Loan, the amount which it or such Servicer would
         have been entitled to receive under subclause (vii) of this Subsection
         (a) as servicing compensation;

                  (vi) to reimburse the Master Servicer or any Servicer for any
         Nonrecoverable Advance, after a Realized Loss has been allocated with
         respect to the related Loan if the Advance or Servicing Advance has not
         been reimbursed pursuant to clause (i);

                  (vii) to pay the Servicing Fee to the Servicers (to the extent
         such Servicing Fee was not retained by the Servicer pursuant to the
         related Servicing Agreement), the Master Servicing Fee to the Master
         Servicer and the Credit Risk Management Fee to the Credit Risk Manager
         for such Distribution Date and the amount of any income or gain
         realized from investments of funds on deposit in the Distribution
         Account pursuant to Section 3.14 hereof and to reimburse the Master
         Servicer for expenses, costs and liabilities incurred by and
         reimbursable to it pursuant to Sections 3.3, 6.3, 8.5 and 10.1;

                  (viii) to reimburse or pay any Servicer any such amounts as
         are due thereto under the applicable Servicing Agreement and have not
         been retained by or paid to the Servicer, to the extent provided in the
         related Servicing Agreement;

                  (ix) to reimburse the Trustee, the Custodian and the
         Securities Administrator for expenses, costs and liabilities, if any,
         incurred by or reimbursable to such parties pursuant to this Agreement;

                  (x) to remove amounts deposited in error; and

                  (xi) to clear and terminate the related Distribution Account
         pursuant to Section 9.1.

                  (b) The Master Servicer shall keep and maintain separate
accounting, on a Loan by Loan basis, for the purpose of accounting for any
reimbursement from the related Distribution Account pursuant to subclauses (i)
through (v), inclusive, or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the related Distribution Account under
Section 3.23(b).

                  (c) On each Distribution Date, the Securities Administrator
shall distribute the Available Distribution Amount with respect to each Loan
Group to Ambac and to the Holders of the related Certificates in accordance with
Section 4.1 or 4.3, as applicable.



                                      -79-
<PAGE>

         Section 3.25 RESERVE FUNDS.

                  (a) No later than the Closing Date, the Securities
Administrator shall establish and maintain (i) a separate, segregated trust
account titled, "Reserve Fund, Wells Fargo Bank, N.A., in trust for the
registered holders of Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
Series 2004-3, Mortgage Pass-Through Certificates, Group I Certificates" (the
"Group I Reserve Fund") and (ii) a separate, segregated trust account titled,
"Reserve Fund, Wells Fargo Bank, N.A., in trust for the registered holders of
Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series 2004-3, Mortgage
Pass-Through Certificates, Group II Certificates" (the "Group II Reserve Fund").
On the Closing Date, the Depositor will deposit, or cause to be deposited, into
each Reserve Fund $1,000. In addition, (x) the amount deposited in the Group I
Reserve Fund shall be increased by any payments received by the Securities
Administrator under the Class I-A-1 Cap Contract which shall be deposited into
the Group I Reserve Fund for the benefit of the related Certificateholders and
(y) the amount deposited in the Group II Reserve Fund shall be increased by any
payments received by the Securities Administrator under the Class II-AR-1 Cap
Contract, Class II-AR-2 Cap Contract, Class II-MR-1 Cap Contract, Class II-MR-2
Cap Contract and Class II-MR-3 Cap Contract, which payments shall be deposited
into the Group II Reserve Fund for the benefit of the related
Certificateholders.

                  (b) (i) On each Distribution Date as to which there is a Net
WAC Rate Carryover Amount payable to the Group I Senior Certificates, the
Securities Administrator will deposit into the Group I Reserve Fund the amounts
described in Section 4.1(a)(iii)(F) rather than distributing such amounts to the
Class I-CE Certificateholders. On each such Distribution Date, the Securities
Administrator shall hold all such amounts for the benefit of the Holders of the
Group I Senior Certificates (other than the Class I-A-IO Certificates) and the
Group I Mezzanine Certificates, and will distribute such amounts to the Holders
of the Group I Senior Certificates (other than the Class I-A-IO Certificates)
and the Group I Mezzanine Certificates in the amounts and priorities set forth
in the last paragraph of Section 4.1(a)(iii). If no Net WAC Rate Carryover
Amounts related to the Group I Certificates are payable on a Distribution Date,
the Securities Administrator shall deposit into the Group I Reserve Fund on
behalf of the Class I-CE Certificateholders, from amounts otherwise
distributable to the Class I-CE Certificateholders, an amount such that when
added to other amounts already on deposit in such Reserve Fund, the aggregate
amount on deposit therein is equal to $1,000.

                           (ii) On each Distribution Date as to which there is a
Net WAC Rate Carryover Amount payable to the Group II Senior Certificates and
the Group II Mezzanine Certificates, the Securities Administrator will deposit
into the related Reserve Fund the amounts described in Section 4.3(a)(iii)(E)
rather than distributing such amounts to the Class II-CE Certificateholders. On
each such Distribution Date, the Securities Administrator shall hold all such
amounts for the benefit of the Holders of the Group II Senior Certificates and
the Group II Mezzanine Certificates, and will distribute such amounts to the
Holders of the Group II Senior Certificates and the Group II Mezzanine
Certificates in the amounts and priorities set forth in the last paragraph of
Section 4.3(a)(iii). If no Net WAC Rate Carryover Amounts related to the Group
II Certificates are payable on a Distribution Date, the Securities Administrator
shall deposit into the Group II Reserve Fund on behalf of the Class II-CE
Certificateholders, from amounts otherwise distributable to the Class II-CE
Certificateholders, an amount such that when



                                      -80-
<PAGE>

added to other amounts already on deposit in such Reserve Fund, the aggregate
amount on deposit therein is equal to $1,000.

                  (c) For federal and state income tax purposes, the Class I-CE
Certificateholders will be deemed to be the owners of the Group I Reserve Fund
and the Class II-CE Certificateholders will be deemed to be the owners of the
Group II Reserve Fund and all amounts deposited into the related Reserve Fund
(other than the initial deposit therein of $1,000) shall be treated as amounts
distributed by REMIC IV to the Holders of the related Class CE Certificates.
Upon the termination of the Trust Fund, a Cleanup Call pursuant to Section 9.1
or the payment in full of the Class A Certificates and the Class M Certificates
of a Loan Group, all amounts remaining on deposit in the related Reserve Funds
will be released by the Trust Fund and distributed to the related Class CE
Certificateholders or their designees. The Reserve Funds will be part of the
Trust Fund but not part of any REMIC and any payments to the Holders of the
Class A Certificates or the Class M Certificates of Net WAC Rate Carryover
Amounts will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860(G)(a)(1).

                  (d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the related Reserve Fund the amounts described above on each Distribution
Date rather than distributing such amounts to the Class CE Certificateholders.
By accepting a Class CE Certificate, each Class CE Certificateholder further
agrees that its agreement to such action by the Securities Administrator is
given for good and valuable consideration, the receipt and sufficiency of which
is acknowledged by such acceptance.

                  (e) The Securities Administrator shall direct any depository
institution maintaining a Reserve Fund to invest the funds in such account in
one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the
Securities Administrator or an Affiliate manages or advises such investment, and
(ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator or
an Affiliate manages or advises such investment. All income and gain earned upon
such investment shall be deposited into the related Reserve Fund. In no event
shall the Securities Administrator be liable for any investments made pursuant
to this clause (e).

                  (f) For federal tax return and information reporting, the
right of the Class A Certificateholders and the Class M Certificateholders to
receive payments from the related Reserve Fund in respect of any Net WAC Rate
Carryover Amount shall be assigned a value of zero.

         Section 3.26 PREPAYMENT PENALTY VERIFICATION.

                  On or prior to each Servicer Remittance Date, each Servicer
shall, to the extent provided in the respective Servicing Agreement, provide in
an electronic format acceptable to the Master Servicer the data necessary for
the Master Servicer to perform its verification duties agreed to by the Master
Servicer and the Depositor. The Master Servicer or a third party



                                      -81-
<PAGE>

reasonably acceptable to the Master Servicer and the Depositor (the
"Verification Agent") will perform such verification duties and will use its
best efforts to issue its findings in a report (the "Verification Report")
delivered to the Master Servicer and the Depositor within ten (10) Business Days
following the related Distribution Date; provided, however, that if the
Verification Agent is unable to issue the Verification Report within ten (10)
Business Days following the Distribution Date, the Verification Agent may issue
and deliver to the Master Servicer and the Depositor the Verification Report
upon the completion of its verification duties. The Master Servicer shall
forward the Verification Report to the respective Servicer and shall notify such
Servicer if the Master Servicer has determined that such Servicer did not
deliver the appropriate Prepayment Charges to the Master Servicer in accordance
with the respective Servicing Agreement. Such written notification from the
Master Servicer shall include the loan number, prepayment penalty code and
prepayment penalty amount as calculated by the Master Servicer or the
Verification Agent, as applicable, of each Loan for which there is a
discrepancy. If the respective Servicer agrees with the verified amounts, such
Servicer shall adjust the immediately succeeding Remittance Report and the
amount remitted to the Master Servicer with respect to prepayments accordingly.
If the respective Servicer disagrees with the determination of the Master
Servicer, such Servicer shall, within five (5) Business Days of its receipt of
the Verification Report, notify the Master Servicer of such disagreement and
provide the Master Servicer with detailed information to support such Servicer's
position. The respective Servicer and the Master Servicer shall cooperate to
resolve any discrepancy on or prior to the immediately succeeding Servicer
Remittance Date, and such Servicer will indicate the effect of such resolution
on the related Remittance Report and shall adjust the amount remitted with
respect to prepayments on such Servicer Remittance Date accordingly.

                  During such time as the respective Servicer and the Master
Servicer are resolving discrepancies with respect to the Prepayment Charges, no
payments in respect of any disputed Prepayment Charges will be remitted to the
related Distribution Account(s) and the Master Servicer shall not be obligated
to remit such payments, unless otherwise required pursuant to Section 7.1
hereof. In connection with such duties, the Master Servicer shall be able to
rely solely on the information provided to it (if any) by the respective
Servicer in accordance with this Section. The Master Servicer shall not be
responsible for verifying the accuracy of any of the information provided to it
by the respective Servicer.




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<PAGE>




                                   ARTICLE IV
                    PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
                             STATEMENTS AND REPORTS

         Section 4.1 DISTRIBUTIONS TO GROUP I CERTIFICATEHOLDERS.

                  (a) On each Distribution Date, the Securities Administrator,
to the extent on deposit therein and based solely upon the Remittance Report for
such Distribution Date, shall withdraw from the Distribution Account for the
Group I Loans, the Group I Available Distribution Amount for such Distribution
Date and distribute to each Certificateholder of a Group I Certificate, as
applicable, by wire transfer in immediately available funds for the account of
such Certificateholder or by any other means of payment acceptable to each
related Certificateholder of record on the immediately preceding Record Date
(other than as provided in Section 9.1 respecting the final distribution) as
specified by each such Certificateholder and at the address of such Holder
appearing in the Certificate Register, from the amount so withdrawn and to the
extent of such Group I Available Distribution Amount, such Certificateholder's
Percentage Interest of the following amounts and in following order and
priority:

                  (i) On each Distribution Date, the Securities Administrator
         shall distribute the Interest Remittance Amount with respect to the
         Group I Certificates for such Distribution Date in the following order
         and priority:

                           (A)      first, to Ambac, the Insurer Premium;

                           (B)      second, to the Holders of each Class of
                                    Group I Senior Certificates, the related
                                    Senior Interest Distribution Amount for such
                                    Distribution Date and such Class to the
                                    extent of the Interest Remittance Amount
                                    remaining after payment of the Insurer
                                    Premium to Ambac pursuant to clause (A)
                                    above, on a pro rata basis based on the
                                    entitlement of each such Class;

                           (C)      third, to the Holders of the Class I-M-1
                                    Certificates, the related Interest
                                    Distribution Amount allocable to such
                                    Certificates to the extent of the related
                                    Interest Remittance Amount for such
                                    Distribution Date remaining after payment of
                                    the Insurer Premium to Ambac and the related
                                    Senior Interest Distribution Amount to the
                                    Group I Senior Certificates;

                           (D)      fourth, to the Holders of the Class I-M-2
                                    Certificates, the Interest Distribution
                                    Amount allocable to such Certificates to the
                                    extent of the related Interest Remittance
                                    Amount for such Distribution Date remaining
                                    after payment of the Insurer Premium to
                                    Ambac, the related Senior Interest
                                    Distribution Amount to the Group I Senior
                                    Certificates and the related Interest
                                    Distribution Amount to the Class I-M-1
                                    Certificates;



                                      -83-
<PAGE>

                           (E)      fourth, to the Holders of the Class I-M-3
                                    Certificates, the Interest Distribution
                                    Amount allocable to such Certificates to the
                                    extent of the related Interest Remittance
                                    Amount for such Distribution Date remaining
                                    after payment of the Insurer Premium to
                                    Ambac, the related Senior Interest
                                    Distribution Amount to the Group I Senior
                                    Certificates and the related Interest
                                    Distribution Amount to the Class I-M-1
                                    Certificates and the Class I-M-2
                                    Certificates;

                  (ii) On each Distribution Date, the Securities Administrator
         shall distribute the Group I Principal Distribution Amount to the
         Holders of each Class of Group I Certificates, other than the Class
         I-A-IO, Class I-P Certificates and Class I-CE Certificates, in the
         following order and priority:

                           (A)      The Group I Senior Principal Distribution
                                    Amount will be distributed as follows:

                                             (1) first, to the Class I-A-6
                                    Certificates, an amount up to the Class
                                    I-A-6 Lockout Distribution Amount for that
                                    Distribution Date, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero; and

                                             (2) second, any remaining Group I
                                    Senior Principal Distribution Amount after
                                    the distributions described above,
                                    sequentially:

                                              (a) to the Class I-A-1
                                              Certificates, until the
                                              Certificate Principal Balance
                                              thereof has been reduced to zero;

                                              (b) concurrently (i) to the Class
                                              I-A-2, Class I-A-3 and Class I-A-4
                                              Certificates and (ii) to the Class
                                              I-A-7 Certificates, on a pro rata
                                              basis based on the Certificate
                                              Principal Balance of each such
                                              Class, until the Certificate
                                              Principal Balance of each such
                                              Class has been reduced to zero;
                                              provided, however, that the pro
                                              rata allocation to the Class
                                              I-A-2, Class I-A-3 and Class I-A-4
                                              Certificates pursuant to this
                                              clause shall be based on the total
                                              Certificate Principal Balance of
                                              the Class I-A-2, Class I-A-3 and
                                              Class I-A-4 Certificates, but
                                              shall be distributed to the Class
                                              I-A-2, Class I-A-3 and Class I-A-4
                                              Certificates on a sequential
                                              basis, in that order, until the
                                              Certificate Principal Balance of
                                              each such Class has been reduced
                                              to zero; and

                                              (c) to the Class I-A-5
                                              Certificates and Class I-A-6
                                              Certificates, sequentially, in
                                              that order, until the Certificate
                                              Principal Balance of each such
                                              Class has been reduced to zero.



                                      -84-
<PAGE>

                           (B)      Holders of the Class I-M-1 Certificates will
                                    be entitled to receive on each Distribution
                                    Date, to the extent of the portion of the
                                    Group I Principal Distribution Amount
                                    remaining after the Group I Senior Principal
                                    Distribution Amount has been distributed,
                                    the Class I-M-1 Principal Distribution
                                    Amount in reduction of the Certificate
                                    Principal Balance thereof, until the
                                    Certificate Principal Balance of the Class
                                    I-M-1 Certificates has been reduced to zero.

                           (C)      Holders of the Class I-M-2 Certificates will
                                    be entitled to receive on each Distribution
                                    Date, to the extent of the portion of the
                                    Group I Principal Distribution Amount
                                    remaining after the sum of the Group I
                                    Senior Principal Distribution Amount and the
                                    Class I-M-1 Principal Distribution Amount
                                    has been distributed, the Class I-M-2
                                    Principal Distribution Amount in reduction
                                    of the Certificate Principal Balance
                                    thereof, until the Certificate Principal
                                    Balance of the Class I-M-2 Certificates has
                                    been reduced to zero.

                           (D)      Holders of the Class I-M-3 Certificates will
                                    be entitled to receive on each Distribution
                                    Date, to the extent of the portion of the
                                    Group I Principal Distribution Amount
                                    remaining after the sum of the Group I
                                    Senior Principal Distribution Amount, the
                                    Class I-M-1 Principal Distribution Amount
                                    and the Class I-M-2 Principal Distribution
                                    Amount has been distributed, the Class I-M-3
                                    Principal Distribution Amount in reduction
                                    of the Certificate Principal Balance
                                    thereof, until the Certificate Principal
                                    Balance of the Class I-M-3 Certificates has
                                    been reduced to zero.

                  (iii) On each Distribution Date, the Securities Administrator
         shall distribute any related Net Monthly Excess Cashflow for such
         Distribution Date in the following order of priority:

                           (A)      to the Holders of the Group I Senior
                                    Certificates (other than the Class I-A-IO
                                    Certificates) and Group I Mezzanine
                                    Certificates, an amount equal to the related
                                    Extra Principal Distribution Amount for such
                                    Distribution Date in accordance with clause
                                    (iv) below;

                           (B)      to Ambac, for payment of any Reimbursement
                                    Amount;

                           (C)      to the Holders of the Class I-M-1
                                    Certificates, in an amount equal to the
                                    related Interest Carry Forward Amount for
                                    such Distribution Date allocable to such
                                    Class of Certificates;

                           (D)      to the Holders of the Class I-M-2
                                    Certificates, in an amount equal to the
                                    related Interest Carry Forward Amount for
                                    such Distribution Date allocable to such
                                    Class of Certificates;



                                      -85-
<PAGE>

                           (E)      to the Holders of the Class I-M-3
                                    Certificates, in an amount equal to the
                                    related Interest Carry Forward Amount for
                                    such Distribution Date allocable to such
                                    Class of Certificates;

                           (F)      to the Group I Reserve Fund, an amount equal
                                    to (a) with respect to the Group I Senior
                                    Certificates (other than the Class I-A-1
                                    Certificates and the Class I-A-IO
                                    Certificates), the sum of the related Net
                                    WAC Rate Carryover Amounts, if any, and (b)
                                    with respect to the Class I-A-1
                                    Certificates, the amount by which the sum of
                                    the Net WAC Rate Carryover Amounts with
                                    respect to the Class I-A-1 Certificates
                                    exceeds the sum of any amounts received by
                                    the Securities Administrator with respect to
                                    the Class I-A-I Cap Contract since the prior
                                    Distribution Date;

                           (G)      to the Holders of the Class I-CE
                                    Certificates, the related Interest
                                    Distribution Amount and any related
                                    Overcollateralization Reduction Amount for
                                    such Distribution Date; and

                           (H)      to the Holders of the Class R Certificates,
                                    in respect of Component R-3, any remaining
                                    amounts; provided that if such Distribution
                                    Date is the Distribution Date immediately
                                    following the expiration of the latest
                                    Prepayment Charge term on the Group I Loans
                                    as identified on the Loan Schedule or any
                                    Distribution Date thereafter, then any such
                                    remaining amounts will be distributed first,
                                    to the Holders of the Class I-P
                                    Certificates, until the Certificate
                                    Principal Balance thereof has been reduced
                                    to zero; and second, to the Holders of the
                                    Class R Certificates.

         On each Distribution Date, the Securities Administrator, after making
the required distributions of interest and principal to the Group I Senior
Certificates and Group I Mezzanine Certificates as described in Section
4.1(a)(i) and (ii) above, and after the distribution of the Net Monthly Excess
Cashflow with respect to the Group I Loans as described in Section 4.1(a)(iii),
the Securities Administrator will withdraw from the Group I Reserve Fund the
amounts on deposit therein and distribute such amounts to the Group I Senior
Certificates (other than the Class I-A-IO Certificates) and the Group I
Mezzanine Certificates, in respect of any Net WAC Rate Carryover Amounts in the
following manner and order of priority: first, concurrently to the Group I
Senior Certificates, other than the Class I-A-IO Certificates, on a pro rata
basis, the related Net WAC Rate Carryover Amount for such Distribution Date for
each such Class; second, to the Class I-M-1 Certificates, the related Net WAC
Rate Carryover Amount for such Distribution Date for such Class; third, to the
Class I-M-2 Certificates, the related Net WAC Rate Carryover Amount for such
Distribution Date for such Class; and fourth, to the Class I-M-3 Certificates,
the related Net WAC Rate Carryover Amount for such Distribution Date for such
Class.

                  (iv) (A) On each Distribution Date (a) prior to the Group I
         Stepdown Date or (b) on which a Group I Trigger Event is in effect, the
         related Extra Principal Distribution Amount shall be distributed in the
         following order of priority:



                                      -86-
<PAGE>

                           (1) first, to the Holders of the Class I-A-6
                  Certificates, up to the Class A-6 Lockout Distribution Amount;

                           (2) second, to the Holders of the Class I-A-1
                  Certificates, until the Certificate Principal Balance thereof
                  has been reduced to zero;

                           (3) third, concurrently (i) to the Holders of the
                  Class I-A-2, Class I-A-3 and Class I-A-4 Certificates and (ii)
                  to the Holders of the Class I-A-7 Certificates, on a pro rata
                  basis based on the Certificate Principal Balance of each such
                  Class, until the Certificate Principal Balance of each such
                  Class has been reduced to zero; provided, however, that the
                  pro rata allocation to the Class I-A-2, Class I-A-3 and Class
                  I-A-4 Certificateholders pursuant to this clause shall be
                  based on the total Certificate Principal Balance of the Class
                  I-A-2, Class I-A-3 and Class I-A-4 Certificates, but shall be
                  distributed to the Class I-A-2, Class I-A-3 and Class I-A-4
                  Certificateholders on a sequential basis, in that order, until
                  the Certificate Principal Balance of each such Class has been
                  reduced to zero;

                           (4) fourth, to the Holders of the Class I-A-5
                  Certificates and Class I-A-6 Certificates, sequentially, in
                  that order, until the Certificate Principal Balance of each
                  such Class has been reduced to zero;

                           (5) fifth, to the Holders of the Class I-M-1
                  Certificates, until the Certificate Principal Balance thereof
                  has been reduced to zero;

                           (6) sixth, to the Holders of the Class I-M-2
                  Certificates, until the Certificate Principal Balance thereof
                  has been reduced to zero; and

                           (7) seventh, to the Holders of the Class I-M-3
                  Certificates, until the Certificate Principal Balance thereof
                  has been reduced to zero.

         (B)      On each Distribution Date (a) on or after the Group I Stepdown
                  Date and (b) on which a Group I Trigger Event is not in
                  effect, distributions of principal to the extent of the
                  related Extra Principal Distribution Amount shall be
                  distributed in the following order of priority:

                           (1) first, the lesser of (x) the related Extra
                  Principal Distribution Amount and (y) the Class A-6 Lockout
                  Distribution Amount, shall be distributed to the Holders of
                  the Class I-A-6 Certificates until the Certificate Principal
                  Balance thereof has been reduced to zero;

                           (2) second, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the
                  amount distributed to the Holders of the Class I-A-6
                  Certificates under clause (1) immediately above, and (y) the
                  Group I Senior Principal Distribution Amount, shall



                                      -87-
<PAGE>

                  be distributed to the Holders of the Class I-A-1 Certificates
                  until the Certificate Principal Balance of the Class I-A-1
                  Certificates has been reduced to zero;

                           (3) third, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount and (ii) the
                  amount distributed to the Holders of the Class I-A-6
                  Certificates and Class I-A-1 Certificates under clauses (1)
                  and (2) immediately above, and (y) the Group I Senior
                  Principal Distribution Amount, shall be distributed
                  concurrently to (i) the Holders of the Class I-A-2, Class
                  I-A-3 and Class I-A-4 Certificates and (ii) to the Holders of
                  the Class I-A-7 Certificates, on a pro rata basis based on the
                  Certificate Principal Balance of each such Class, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero; provided, however, that the pro rata
                  allocation to the Class I-A-2, Class I-A-3 and Class I-A-4
                  Certificates pursuant to this clause shall be based on the
                  total Certificate Principal Balance of the Class I-A-2, Class
                  I-A-3 and Class I-A-4 Certificates, but shall be distributed
                  to the Class I-A-2, Class I-A-3 and Class I-A-4 Certificates
                  on a sequential basis, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;

                           (4) fourth, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount and (ii) the
                  amount distributed to the Holders of the Class I-A-6, Class
                  I-A-1, Class I-A-2, Class I-A-3, Class I-A-4 and Class I-A-7
                  Certificates under clauses (1), (2) and (3) immediately above
                  and (y) the Group I Senior Principal Distribution Amount,
                  shall be distributed to the Holders of the Class I-A-5
                  Certificates and Class I-A-6 Certificates, sequentially, in
                  that order, until the Certificate Principal Balance of each
                  such Class has been reduced to zero;

                           (5) fifth, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the
                  amount distributed to the Holders of the Group I Senior
                  Certificates under clauses (1), (2), (3) and (4) immediately
                  above, and (y) the Class I-M-1 Principal Distribution Amount,
                  shall be distributed to the Holders of the Class I-M-1
                  Certificates, until the Certificate Principal Balance of the
                  Class I-M-1 Certificates has been reduced to zero;

                           (6) sixth, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the sum
                  of the amounts distributed to the Holders of the Group I
                  Senior Certificates under clauses (1), (2), (3) and (4)
                  immediately above and to the holders of the Class I-M-1
                  Certificates under clause (5) immediately above, and (y) the
                  Class I-M-2 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class I-M-2 Certificates,
                  until the Certificate



                                      -88-
<PAGE>

                  Principal Balance of the Class I-M-2 Certificates has been
                  reduced to zero; and

                           (7) seventh, the lesser of (x) the excess of (i) the
                  related Extra Principal Distribution Amount over (ii) the sum
                  of the amount distributed to the Holders of the Group I Senior
                  Certificates under clause (1), (2), (3) and (4) immediately
                  above, to the holders of the Class I-M-1 Certificates under
                  clause (5) immediately above and to the Holders of the Class
                  I-M-2 Certificates under clause (6) immediately above, and (y)
                  the Class I-M-3 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class I-M-3 Certificates,
                  until the Certificate Principal Balance of the Class I-M-3
                  Certificates has been reduced to zero.

                  (v) On each Distribution Date, the Securities Administrator
         shall withdraw any amounts then on deposit in the related Distribution
         Account that represent Prepayment Charges received on the Group I Loans
         and shall distribute such amounts to the Holders of the Class I-P
         Certificates.

         Section 4.2 ALLOCATION OF REALIZED LOSSES ON THE GROUP I LOANS.

         Prior to each Distribution Date, the Master Servicer, based solely on
the information provided by the related Servicer, shall determine the amount of
Realized Losses, if any, with respect to the Group I Loans.

         Realized Losses on the Group I Loans for any Distribution Date will
first, cause a reduction in the related Net Monthly Excess Cash Flow for that
Distribution Date and second, cause a reduction in the Certificate Principal
Balance of the Class I-CE Certificates for that Distribution Date, until the
Certificate Principal Balance thereof has been reduced to zero. To the extent
that Realized Losses on the Group I Loans on a Distribution Date cause the
aggregate Certificate Principal Balance of the Group I Senior Certificates
(other than the Class I-A-IO Certificates) and the Group I Mezzanine
Certificates, after taking into account all distributions on such Distribution
Date to exceed the aggregate Principal Balance of the Group I Loans as of the
last day of the related Due Period, such excess will be allocated first, to the
Class I-M-3 Certificates; second, to the Class I-M-2 Certificates; and third, to
the Class I-M-1 Certificates in each case to reduce the Certificate Principal
Balance thereof until it has been reduced to zero. In addition, to the extent
the related Servicer receives Subsequent Recoveries with respect to any
defaulted Group I Loan, the amount of the Realized Loss with respect to that
defaulted Group I Loan will be reduced to the extent such recoveries are applied
to reduce the Certificate Principal Balance of any class of Group I Certificates
on any Distribution Date.

         Any allocation of a Realized Loss on a Group I Loan to a Group I
Mezzanine Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated as of such
Distribution Date after all distributions on such Distribution Date have been
made. Any allocation of Realized Losses on a Group I Loan to a Class I-CE
Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.1(a)(iii)(G). No allocations of Realized Losses
shall be made to the Group I Senior Certificates or the Class I-P Certificates.
Notwithstanding anything to the contrary in this



                                      -89-
<PAGE>

Agreement, in no event will the Certificate Principal Balance of any Group I
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (i) allocable to the Group I Mezzanine Certificate in respect of
Realized Losses and (ii) payable as principal to the Holder of the Certificate
from the related Net Monthly Excess Cashflow.

         As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.

         In the event that the related Servicer collects a Subsequent Recovery
with respect to a defaulted Group I Liquidated Loan with respect to which a
Realized Loss has been incurred, such Subsequent Recovery will be distributed as
part of the Group I Available Distribution Amount in accordance with the
priorities described under Section 4.1. Additionally, the Certificate Principal
Balance of each class of Group I Mezzanine Certificates that has been reduced by
the allocation of a Realized Loss to such Certificate will be increased, in
order of seniority, by the amount of such Subsequent Recovery, but not in excess
of the amount of any Realized Losses previously allocated to such Class of
Certificates. Holders of such Certificates will not be entitled to any payment
in respect of current interest on the amount of such increases for any Interest
Accrual Period preceding the Distribution Date on which such increase occurs.

         The principal portion of all Realized Losses on the Group I Loans shall
be allocated on each Distribution Date first, to REMIC I Regular Interest LTI-1
and REMIC I Regular Interest LTI-P, until the Uncertificated Principal Balances
have been reduced to zero and then sequentially to REMIC I Regular Interest
LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3
and REMIC I Regular Interest LTI-IO-4, until the Uncertificated Principal
Balances have been reduced to zero.

         All Realized Losses on the REMIC I Regular Interests shall be allocated
on each Distribution Date to the following REMIC III Regular Interests in the
specified percentages, as follows: first, to Uncertificated Accrued Interest
payable to the REMIC III Regular Interest LTIII-1AA and REMIC III Regular
Interest LTIII-1ZZ up to an aggregate amount equal to the REMIC III Group I
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of the REMIC III Regular Interest LTIII-1AA
and REMIC III Regular Interest LTIII-1ZZ up to an aggregate amount equal to the
REMIC III Group I Principal Loss Allocation Amount, 98% and 2%, respectively;
third, to the Uncertificated Principal Balances of REMIC III Regular Interest
LTIII-1AA, 98%, to REMIC III Regular Interest LTIII-1M3, 1% and to REMIC III
Regular Interest LTIII-1ZZ, 1%, respectively, until the Uncertificated Principal
Balance of REMIC III Regular Interest LTIII-1M3 has been reduced to zero;
fourth, to the Uncertificated Principal Balances of REMIC III Regular Interest
LTIII-1AA, REMIC III Regular Interest LTIII-1M2 and REMIC III Regular Interest
LTIII-1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC III Regular Interest LTIII-1M2 has been reduced to zero; and
fifth, to the Uncertificated Principal Balances of REMIC III Regular Interest
LTIII-1AA, REMIC III Regular Interest LTIII-1M1 and REMIC III



                                      -90-
<PAGE>

Regular Interest LTIII-1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC III Regular Interest LTIII-1M1 has
been reduced to zero.

         Section 4.3 DISTRIBUTIONS TO GROUP II CERTIFICATEHOLDERS.

                  (a) On each Distribution Date, the Securities Administrator,
to the extent on deposit therein and based solely upon the Remittance Report for
such Distribution Date, shall withdraw from the Distribution Account for the
Group II Loans, the Group II Available Distribution Amount for such Distribution
Date and distribute to each Certificateholder of a Group II Certificate, as
applicable, by wire transfer in immediately available funds for the account of
such Certificateholder or by any other means of payment acceptable to each
related Certificateholder of record on the immediately preceding Record Date
(other than as provided in Section 9.1 respecting the final distribution) as
specified by each such Certificateholder and at the address of such Holder
appearing in the Certificate Register, from the amount so withdrawn and to the
extent of such Group II Available Distribution Amount, such Certificateholder's
Percentage Interest of the following amounts and in following order and
priority:

                  (i) (A) On each Distribution Date, the Securities
         Administrator shall distribute the portion of the Interest Remittance
         Amount relating to the Group II-1 Loans for such Distribution Date in
         the following order and priority:

                           (1) first, to the Holders Class II-AR-1 Certificates,
                  the related Senior Interest Distribution Amount for such
                  Distribution Date;

                           (2) second, to the Holders of the Class II-AR-2
                  Certificates, the related Senior Interest Distribution Amount
                  to the extent remaining unpaid after the distributions of the
                  Interest Remittance Amount related to the Group II-2 Loans as
                  set forth in clause (B)(1) immediately below;

                           (3) third, to the Holders of the Class II-M-1
                  Certificates, the Interest Distribution Amount allocable to
                  such Certificates to the extent of the Interest Remittance
                  Amount remaining after distribution of the related Senior
                  Interest Distribution Amount to the Group II Senior
                  Certificates;

                           (4) fourth, to the Holders of the Class II-M-2
                  Certificates, the Interest Distribution Amount allocable to
                  such Certificates to the extent of the Interest Remittance
                  Amount remaining after distribution of the Senior Interest
                  Distribution Amount to the Group II Senior Certificates and
                  the Interest Distribution Amount to the Class II-M-1
                  Certificates; and

                           (5) fifth, to the Holders of the Class II-M-3
                  Certificates, the Interest Distribution Amount allocable to
                  such Certificates to the extent of the Interest Remittance
                  Amount remaining after distribution of the Senior Interest
                  Distribution Amount to the Group II Senior



                                      -91-
<PAGE>

                  Certificates and the Interest Distribution Amount to the Class
                  II-M-1 and the Class II-M-2 Certificates;

         (B)      On each Distribution Date, the Securities Administrator shall
                  distribute the portion of the Interest Remittance Amount
                  relating to the Group II-2 Loans for such Distribution Date in
                  the following order and priority:

                           (1) first, to the Holders Class II-AR-2 Certificates,
                  the related Senior Interest Distribution Amount for such
                  Distribution Date;

                           (2) second, to the Holders of the Class II-AR-1
                  Certificates, the related Senior Interest Distribution Amount
                  to the extent remaining unpaid after the distributions of the
                  Interest Remittance Amount related to the Group II-2 Loans as
                  set forth in clause (A)(1) immediately above;

                           (3) third, to the Holders of the Class II-M-1
                  Certificates, the Interest Distribution Amount allocable to
                  such Certificates to the extent of the Interest Remittance
                  Amount remaining after distribution of the related Senior
                  Interest Distribution Amount to the Group II Senior
                  Certificates;

                           (4) fourth, to the Holders of the Class II-M-2
                  Certificates, the Interest Distribution Amount allocable to
                  such Certificates to the extent of the Interest Remittance
                  Amount remaining after distribution of the Senior Interest
                  Distribution Amount to the Group II Senior Certificates and
                  the Interest Distribution Amount to the Class II-M-1
                  Certificates; and

                           (5) fifth, to the Holders of the Class II-M-3
                  Certificates, the Interest Distribution Amount allocable to
                  such Certificates to the extent of the Interest Remittance
                  Amount remaining after distribution of the Senior Interest
                  Distribution Amount to the Group II Senior Certificates and
                  the Interest Distribution Amount to the Class II-M-1 and the
                  Class II-M-2 Certificates;

                  (ii) On each Distribution Date, the Securities Administrator
         shall distribute the Group II Principal Distribution Amount to the
         Holders of each Class of Group II Certificates, other than the Class
         II-P Certificates and Class II-CE Certificates, in the following order
         and priority:

                  (A)      The Class II-AR-1 Principal Distribution Amount will
                           be distributed as follows:

                                    (1) first, to the Class II-AR-1 Certificates
                           until the Certificate Principal Balance thereof has
                           been reduced to zero; and

                                    (2) second, to the Class II-AR-2
                           Certificates, after taking into account the
                           distribution of the Class II-AR-2 Principal
                           Distribution



                                      -92-
<PAGE>

                           Amount as described in clause (B)(1) immediately
                           below, until the Certificate Principal Balance
                           thereof has been reduced to zero.

                  (B)      The Class II-AR-2 Principal Distribution Amount will
                           be distributed as follows:

                                    (1) first, to the Class II-AR-2 Certificates
                           until the Certificate Principal Balance thereof has
                           been reduced to zero; and

                                    (2) second, to the Class II-AR-1
                           Certificates, after taking into account the
                           distribution of the Class II-AR-1 Principal
                           Distribution Amount as described in clause (A)(1)
                           immediately above, until the Certificate Principal
                           Balance thereof has been reduced to zero.

                  (C)      Holders of the Class II-MR-1 Certificates will be
                           entitled to receive on each Distribution Date, to the
                           extent of the portion of the Group II Principal
                           Distribution Amount remaining after the Group II
                           Senior Principal Distribution Amount has been
                           distributed, the Class II-MR-1 Principal Distribution
                           Amount in reduction of the Certificate Principal
                           Balance thereof, until the Certificate Principal
                           Balance of the Class II-MR-1 Certificates has been
                           reduced to zero.

                  (D)      Holders of the Class II-MR-2 Certificates will be
                           entitled to receive on each Distribution Date, to the
                           extent of the portion of the Group II Principal
                           Distribution Amount remaining after the sum of the
                           Group II Senior Principal Distribution Amount and the
                           Class II-MR-1 Principal Distribution Amount has been
                           distributed, the Class II-MR-2 Principal Distribution
                           Amount in reduction of the Certificate Principal
                           Balance thereof, until the Certificate Principal
                           Balance of the Class II-MR-2 Certificates has been
                           reduced to zero.

                  (E)      Holders of the Class II-MR-3 Certificates will be
                           entitled to receive on each Distribution Date, to the
                           extent of the portion of the Group II Principal
                           Distribution Amount remaining after the sum of the
                           Group II Senior Principal Distribution Amount, the
                           Class II-MR-1 Principal Distribution Amount and the
                           Class II-MR-2 Principal Distribution Amount has been
                           distributed, the Class II-MR-3 Principal Distribution
                           Amount in reduction of the Certificate Principal
                           Balance thereof, until the Certificate Principal
                           Balance of the Class II-MR-3 Certificates has been
                           reduced to zero.

                  (iii) On each Distribution Date, the Securities Administrator
         shall distribute any related Net Monthly Excess Cashflow for such
         Distribution Date in the following order of priority:

                  (A)      to the Holders of the Group II Senior Certificates
                           and Group II Mezzanine Certificates, an amount equal
                           to the related Extra Principal



                                      -93-
<PAGE>

                           Distribution Amount for such Distribution Date in
                           accordance with clause (iv) below;

                  (B)      to the Holders of the Class II-MR-1 Certificates, in
                           an amount equal to the related Interest Carry Forward
                           Amount for such Distribution Date allocable to such
                           Class of Certificates;

                  (C)      to the Holders of the Class II-MR-2 Certificates, in
                           an amount equal to the related Interest Carry Forward
                           Amount for such Distribution Date allocable to such
                           Class of Certificates;

                  (D)      to the Holders of the Class II-MR-3 Certificates, in
                           an amount equal to the related Interest Carry Forward
                           Amount for such Distribution Date allocable to such
                           Class of Certificates;

                  (E)      to the Group II Reserve Fund, an amount equal to the
                           sum of:

                                    (1) the amount by which the sum of the Net
                           WAC Rate Carryover Amounts with respect to the Class
                           II-AR-1 Certificates exceeds the sum of any amounts
                           received by the Securities Administrator with respect
                           to the Class II-AR-1 Cap Contract;

                                    (2) the amount by which the sum of the Net
                           WAC Rate Carryover Amounts with respect to the Class
                           II-AR-2 Certificates exceeds the sum of any amounts
                           received by the Securities Administrator with respect
                           to the Class II-AR-2 Cap Contract;

                                    (3) the amount by which the sum of the Net
                           WAC Rate Carryover Amounts with respect to the Class
                           II-MR-1 Certificates exceeds the sum of any amounts
                           received by the Securities Administrator with respect
                           to the Class II-MR-1 Cap Contract;

                                    (4) the amount by which the sum of the Net
                           WAC Rate Carryover Amounts with respect to the Class
                           II-MR-2 Certificates exceeds the sum of any amounts
                           received by the Securities Administrator with respect
                           to the Class II-MR-2 Cap Contract;

                                    (5) the amount by which the sum of the Net
                           WAC Rate Carryover Amounts with respect to the Class
                           II-MR-3 Certificates exceeds the sum of any amounts
                           received by the Securities Administrator with respect
                           to the Class II-MR-3 Cap Contract;

                  (F)      to the Holders of the Class II-CE Certificates, the
                           related Interest Distribution Amount and any related
                           Overcollateralization Reduction Amount for such
                           Distribution Date; and

                  (G)      to the Holders of the Class R Certificates, in
                           respect of the Component R-3, any remaining amounts;
                           provided that if such Distribution Date is



                                      -94-
<PAGE>

                           the Distribution Date immediately following the
                           expiration of the latest Prepayment Charge term on
                           the Group II Loans as identified on the Loan Schedule
                           or any Distribution Date thereafter, then any such
                           remaining amounts will be distributed first, to the
                           Holders of the Class P Certificates, until the
                           Certificate Principal Balance thereof has been
                           reduced to zero; and second, to the Holders of the
                           Class R Certificates.

         On each Distribution Date, after making the required distributions of
interest and principal to the Group II Certificates as described in Section
4.3(a)(i) and (ii) above and after the distribution of the related Net Monthly
Excess Cashflow with respect to the Group II Loans as described in Section
4.3(a)(iii), the Securities Administrator will withdraw from the Group II
Reserve Fund the amounts on deposit therein and distribute such amounts to the
Group II Senior Certificates and the Group II Mezzanine Certificates, in respect
of any Net WAC Rate Carryover Amounts in the following manner and order of
priority: first, concurrently to the Group II Senior Certificates, on a pro rata
basis, the related Net WAC Rate Carryover Amount for such Distribution Date for
each such Class; second, to the Class II-MR-1 Certificates, the related Net WAC
Rate Carryover Amount for such Distribution Date for such Class; third, to the
Class II-MR-2 Certificates, the related Net WAC Rate Carryover Amount for such
Distribution Date for such Class; and fourth, to the Class II-MR-3 Certificates,
the related Net WAC Rate Carryover Amount for such Distribution Date for such
Class.

                  (iv) (A) On each Distribution Date (a) prior to the Group II
         Stepdown Date or (b) on which a Group II Trigger Event is in effect,
         the related Extra Principal Distribution Amount shall be distributed in
         the following order of priority:

                           (1) first, concurrently to the Holders of Group II
                  Senior Certificates, on a pro rata basis based on the
                  Certificate Principal Balance of each such Class, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero;

                           (2) second, to the Holders of the Class II-MR-1
                  Certificates, until the Certificate Principal Balance of such
                  Certificates has been reduced to zero;

                           (3) third, to the Holders of the Class II-MR-2
                  Certificates, until the Certificate Principal Balance of such
                  Certificates has been reduced to zero; and

                           (4) fourth, to the Holders of the Class II-MR-3
                  Certificates, until the Certificate Principal Balance of such
                  Certificates has been reduced to zero.

         (B)      On each Distribution Date (a) on or after the Group II
                  Stepdown Date and (b) on which a Group II Trigger Event is not
                  in effect, distributions of principal to the extent of the
                  related Extra Principal Distribution Amount shall be
                  distributed in the following order of priority:



                                      -95-
<PAGE>

                           (1) first, concurrently (a) the lesser of (x) the
                  Group II-1 Principal Distribution Amount and (y) the Class
                  II-AR-1 Principal Distribution Amount, shall be distributed to
                  the Holders of the Class II-AR-1 Certificates until the
                  Certificate Principal Balance of the Class II-AR-1
                  Certificates has been reduced to zero and (b) the lesser of
                  (x) the Group II-2 Principal Distribution Amount and (y) the
                  Class II-AR-2 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class II-AR-2 Certificates
                  until the Certificate Principal Balance of the Class II-AR-2
                  Certificates has been reduced to zero;

                           (2) second, the lesser of (x) the excess of (i) the
                  Group II Principal Distribution Amount over (ii) the amount
                  distributed to the Holders of the Group II Senior Certificates
                  under clause (1) immediately above, and (y) the Class II-MR-1
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class II-MR-1 Certificates until the
                  Certificate Principal Balance of the Class II-MR-1
                  Certificates has been reduced to zero;

                           (3) third, the lesser of (x) the excess of (i) the
                  Group II Principal Distribution Amount over (ii) the sum of
                  the amounts distributed to the Holders of the Group II Senior
                  Certificates and Class II-MR-1 Certificates under clauses (1)
                  and (2) immediately above, and (y) the Class II-MR-2 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class II-MR-2 Certificates until the Certificate Principal
                  Balance of the Class II-MR-2 Certificates has been reduced to
                  zero; and

                           (4) fourth, the lesser of (x) the excess of (i) the
                  Group II Principal Distribution Amount and (ii) the sum of the
                  amounts distributed to the Holders of the Group II Senior,
                  Class II-MR-1 and Class II-MR-2 Certificates under clauses
                  (1), (2) and (3) immediately above and (y) the Class II-MR-3
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class II-MR-3 Certificates until the
                  Certificate Principal Balance of the Class II-MR-3
                  Certificates has been reduced to zero.

                  (v) On each Distribution Date, the Securities Administrator
         shall withdraw any amounts then on deposit in the related Distribution
         Account that represent Prepayment Charges received on the Group II
         Loans and shall distribute such amounts to the Holders of the Class
         II-P Certificateholders.

         Section 4.4 ALLOCATION OF REALIZED LOSSES ON THE GROUP II LOANS.

         Prior to each Distribution Date, the Master Servicer, based solely on
the information provided by the related Servicer, shall determine the amount of
Realized Losses, if any, with respect to the Group II Loans.



                                      -96-
<PAGE>

         Realized Losses on the Group II Loans for any Distribution Date will
first, cause a reduction in the related Net Monthly Excess Cash Flow for that
Distribution Date and second, cause a reduction in the Certificate Principal
Balance of the Class II-CE Certificates for that Distribution Date, until the
Certificate Principal Balance thereof has been reduced to zero. To the extent
that Realized Losses on the Group II Loans on a Distribution Date cause the
aggregate Certificate Principal Balance of the Group II Senior Certificates and
the Group II Mezzanine Certificates, after taking into account all distributions
on such Distribution Date to exceed the aggregate Principal Balance of the Group
II Loans as of the last day of the related Due Period, such excess will be
allocated first, to the Class II-MR-3 Certificates; second, to the Class II-MR-2
Certificates; and third, to the Class II-MR-1 Certificates in each case to
reduce the Certificate Principal Balance thereof until it has been reduced to
zero. In addition, to the extent the related Servicer receives Subsequent
Recoveries with respect to any defaulted Group II Loan, the amount of the
Realized Loss with respect to that defaulted Group II Loan will be reduced to
the extent such recoveries are applied to reduce the Certificate Principal
Balance of any class of Group II Certificates on any Distribution Date.

         Any allocation of a Realized Loss on a Group II Loan to a Group II
Mezzanine Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated as of such
Distribution Date after all distributions on such Distribution Date have been
made. Any allocation of Realized Losses on a Group II Loan to a Class II-CE
Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.3(a)(iii)(F). No allocations of Realized Losses
shall be made to the Group II Senior Certificates or the Class II-P
Certificates. Notwithstanding anything to the contrary in this Agreement, in no
event will the Certificate Principal Balance of any Group II Mezzanine
Certificate be reduced more than once in respect of any particular amount both
(i) allocable to the Group II Mezzanine Certificate in respect of Realized
Losses and (ii) payable as principal to the Holder of the Certificate from the
related Net Monthly Excess Cashflow.

         As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.

         In the event that the related Servicer collects any Subsequent Recovery
with respect to a defaulted Group II Liquidated Loan with respect to which a
Realized Loss has been incurred, such Subsequent Recovery will be distributed as
part of the Group II Available Distribution Amount in accordance with the
priorities described under Section 4.3. Additionally, the Certificate Principal
Balance of each class of Group II Mezzanine Certificates that has been reduced
by the allocation of a Realized Loss to such Certificate will be increased, in
order of seniority, by the amount of such Subsequent Recovery, but not in excess
of the amount of any Realized Losses previously allocated to such Class of
Certificates. Holders of such Certificates will not be entitled to any payment
in respect of current interest on the amount of such increases for any Interest
Accrual Period preceding the Distribution Date on which such increase occurs.



                                      -97-
<PAGE>

         The principal portion of all Realized Losses on the Group II Loans
shall be allocated on each Distribution Date to REMIC II Regular Interest
LTII-1, REMIC II Regular Interest LTII-2 and REMIC II Regular Interest LTII-P,
until the Uncertificated Principal Balances have been reduced to zero.

         The REMIC III Group II Marker Allocation Percentage of all Realized
Losses on the REMIC II Regular Interests shall be allocated on each Distribution
Date to the following REMIC III Regular Interests in the specified percentages,
as follows: first, to Uncertificated Accrued Interest payable to the REMIC III
Regular Interest LTIII-2AA and REMIC III Regular Interest LTIII-2ZZ up to an
aggregate amount equal to the REMIC III Group II Interest Loss Allocation
Amount, 98% and 2%, respectively; second, to the Uncertificated Principal
Balances of the REMIC III Regular Interest LTIII-2AA and REMIC III Regular
Interest LTIII-2ZZ up to an aggregate amount equal to the REMIC III Group II
Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the
Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA, 98%,
to REMIC III Regular Interest LTIII-2MR3, 1% and to REMIC III Regular Interest
LTIII-2ZZ, 1%, respectively, until the Uncertificated Principal Balance of REMIC
III Regular Interest LTIII-2MR3 has been reduced to zero; fourth, to the
Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA, REMIC
III Regular Interest LTIII-2MR2 and REMIC III Regular Interest LTIII-2ZZ, 98%,
1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC III
Regular Interest LTIII-2MR2 has been reduced to zero; and fifth, to the
Uncertificated Principal Balances of REMIC III Regular Interest LTIII-2AA, REMIC
III Regular Interest LTIII-2MR1 and REMIC III Regular Interest LTIII-2ZZ, 98%,
1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC III
Regular Interest LTIII-2MR1 has been reduced to zero.

         The REMIC III Sub WAC Allocation Percentage of all Realized Losses on
the Group II Loans shall be applied after all distributions have been made on
each Distribution Date first, so as to keep the Uncertificated Principal Balance
of each REMIC III Group II Regular Interest ending with the designation "GRP"
equal to 0.01% of the aggregate Stated Principal Balance of the Group II Loans;
second, to each REMIC III Regular Interest ending with the designation "SUB," so
that the Uncertificated Principal Balance of each such REMIC III Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal
Balance of the Group II Loans over (y) the current Certificate Principal Balance
of the Group II Senior Certificates (except that if any such excess is a larger
number than in the preceding distribution period, the least amount of Realized
Losses shall be applied to such REMIC III Regular Interests such that the REMIC
III Subordinated Balance Ratio is maintained); and third, any remaining Realized
Losses on the Group II Loans shall be allocated to REMIC III Regular Interest
LTIII-2XX.

         Section 4.5 EFFECT OF DISTRIBUTIONS AND REALIZED LOSSES; FINAL
DISTRIBUTIONS ON CERTIFICATES.

                  (a) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal or allocations of Realized
Losses with respect to Group I Loans or Group II Loans, as applicable, made on
any Distribution Date shall be binding upon all Holders of such Certificate and
of any Certificate issued upon the registration of transfer or exchange therefor
or in lieu thereof, whether or not such distribution is noted on such
Certificate. The final distribution of principal of each Certificate (and the
final distribution with respect to the Class R



                                      -98-
<PAGE>

Certificate upon termination of the Trust Fund) shall be payable in the manner
provided in Sections 4.1 and 4.3 only upon presentation and surrender thereof on
or after the Distribution Date therefor at the office or agency of the
Securities Administrator specified in the notice delivered pursuant to Section
4.5(b) or Section 9.1.

                  (b) Whenever, on the basis of Curtailments, Payoffs and
Monthly Payments on the Group I Loans or Group II Loans, as applicable, and
related Insurance Proceeds and Liquidation Proceeds received and expected to be
received during the applicable Prepayment Period, the Securities Administrator
believes that the entire remaining unpaid Certificate Principal Balance of any
Class of Certificates shall become distributable on the next Distribution Date,
the Securities Administrator shall, no later than the Determination Date of the
month of such Distribution Date, mail or cause to be mailed to each Person in
whose name a Certificate to be so retired is registered at the close of business
on the Record Date, to the Underwriter and to each Rating Agency a notice to the
effect that:

                  (i) it is expected that funds sufficient to make such final
         distribution shall be available in the related Distribution Account on
         such Distribution Date, and

                  (ii) if such funds are available, (A) such final distribution
         shall be payable on such Distribution Date, but only upon presentation
         and surrender of such Certificate at the office or agency of the
         Securities Administrator maintained for such purpose (the address of
         which shall be set forth in such notice), and (B) no interest shall
         accrue on such Certificate after such Distribution Date.

         Section 4.6 STATEMENTS TO CERTIFICATEHOLDERS.

                  (a) On each Distribution Date, the Securities Administrator
shall provide or make available, upon request to each Holder of a Group I
Certificate, Ambac and the Credit Risk Manager, a statement (each, a "Remittance
Report") as to the distributions made on such Distribution Date setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Group I Certificates of each Class allocable
         to principal and the amount of the distribution made on such
         Distribution Date to the Holders of the Class I-P Certificates
         allocable to Prepayment Charges;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of the Group I Certificates of each Class allocable
         to interest;

                  (iii) The aggregate Servicing Fee received by the related
         Servicer and Master Servicing Fee received by the Master Servicer
         during the related Due Period with respect to the Group I Loans;

                  (iv) The number and aggregate Principal Balance of the Group I
         Loans delinquent 31-60 days, 61-90 days or 91 or more days;

                  (v) The (A) number and aggregate Principal Balance of Group I
         Loans with respect to which foreclosure proceedings have been
         initiated, and (B) number and



                                      -99-
<PAGE>

         aggregate Principal Balance of Mortgaged Properties related to the
         Group I Loans acquired through foreclosure, deed in lieu of foreclosure
         or other exercise of rights respecting the Trustee's security interest
         in the Group I Loans;

                  (vi) The aggregate Principal Balance of the Group I Loans as
         of the close of business on the last day of the related Prepayment
         Period;

                  (vii) The aggregate amount of Principal Prepayments on the
         Group I Loans made during the related Prepayment Period and the
         aggregate amount of any Prepayment Charges received in respect thereof;

                  (viii) The amount of Realized Losses with respect to the Group
         I Loans allocable to the Group I Certificates on the related
         Distribution Date and the cumulative amount of Realized Losses incurred
         on the Group I Loans and allocated to the Group I Certificates since
         the Cut-Off Date;

                  (ix) The amount of interest accrued but not paid to each Class
         of Group I Certificates entitled to interest since (a) the prior
         Distribution Date and (b) the Closing Date;

                  (x) The amount of funds advanced related to the Group I Loans
         by the related Servicer and the Master Servicer for such Distribution
         Date;

                  (xi) The total amount of Payoffs and Curtailments related to
         the Group I Loans received during the related Prepayment Period;

                  (xii) With respect to any Group I Loan that became an REO
         Property during the preceding calendar month, the loan number of such
         Group I Loan, the unpaid principal balance and the Scheduled Principal
         Balance of such Group I Loan;

                  (xiii) To the extent provided by the related Servicer, the
         book value of any Group I REO Property as of the close of business on
         the last Business Day of the calendar month preceding the Distribution
         Date;

                  (xiv) The aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Distribution Account related to the Group I
         Loans for such Distribution Date;

                  (xv) The Certificate Principal Balance of each Class of Group
         I Certificates, after giving effect to the distributions and
         allocations of Group I Realized Losses made on such Distribution Date,
         separately identifying any reduction thereof due to allocations of
         Group I Realized Losses;

                  (xvi) The aggregate amount of any Prepayment Interest
         Shortfalls and Curtailment Shortfalls related to the Group I Loans for
         such Distribution Date, to the extent not covered by payments by the
         Master Servicer pursuant to Section 3.20;



                                     -100-
<PAGE>

                  (xvii) The aggregate amount of Relief Act Interest Shortfalls
         related to the Group I Loans for such Distribution Date;

                  (xviii) The Group I Required Overcollateralization Amount and
         the Group I Credit Enhancement Percentage for such Distribution Date;

                  (xix) The Overcollateralization Increase Amount related to the
         Group I Certificates, if any, for such Distribution Date;

                  (xx) The Overcollateralization Reduction Amount related to the
         Group I Certificates, if any, for such Distribution Date;

                  (xxi) The Net WAC Rate Carryover Amount, if any, for such
         Distribution Date;

                  (xxii) The Net WAC Rate Carryover Amount, if any, outstanding
         after reimbursements therefor on such Distribution Date and any amounts
         received under the Class I-A-1 Cap Contract;

                  (xxiii) The respective Pass-Through Rates applicable to each
         Class of Group I Certificates for such Distribution Date;

                  (xxiv) The amount of any deposit to the Group I Reserve Fund
         contemplated by Section 3.25;

                  (xxv) The balance of the Group I Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                  (xxvi) The amount of any withdrawal from the Group I Reserve
         Fund pursuant to the last paragraph of Section 4.1(a)(iii);

                  (xxvii) The balance of the Group I Reserve Fund after all
         deposits and withdrawals on such Distribution Date; and

                  (xxviii) The amount of any Guaranteed Distribution paid on
         such Distribution Date, the amount of any Reimbursement Amount paid to
         Ambac on such Distribution Date pursuant to Section 4.1(a)(iii)(B) and
         the amount of any Reimbursement Amount remaining after giving effect to
         any such payments to Ambac.

                  (b) On each Distribution Date, the Securities Administrator
shall provide or make available, upon request to each Holder of a Group II
Certificate and the Credit Risk Manager, a statement (each, a "Remittance
Report") as to the distributions made on such Distribution Date setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Group II Certificates of each Class
         allocable to principal and the amount of the distribution made on such
         Distribution Date to the Holders of the Class II-P Certificates
         allocable to Prepayment Charges;



                                     -101-
<PAGE>

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of the Group II Certificates of each Class
         allocable to interest;

                  (iii) The aggregate Servicing Fee received by the related
         Servicer and Master Servicing Fee received by the Master Servicer
         during the related Due Period;

                  (iv) The number and aggregate Principal Balance of the Group
         II Loans delinquent 31-60 days, 61-90 days or 91 or more days;

                  (v) The (A) number and aggregate Principal Balance of Group II
         Loans with respect to which foreclosure proceedings have been
         initiated, and (B) number and aggregate Principal Balance of Mortgaged
         Properties related to the Group II Loans acquired through foreclosure,
         deed in lieu of foreclosure or other exercise of rights respecting the
         Trustee's security interest in the Group II Loans;

                  (vi) The aggregate Principal Balance of the Group II Loans as
         of the close of business on the last day of the related Prepayment
         Period;

                  (vii) The aggregate amount of Principal Prepayments on the
         Group II Loans made during the related Prepayment Period and the
         aggregate amount of any Prepayment Charges received in respect thereof;

                  (viii) The amount of Realized Losses with respect to the Group
         II Loans allocable to the Group II Certificates on the related
         Distribution Date and the cumulative amount of Realized Losses incurred
         on the Group II Loans and allocated to the Group II Certificates since
         the Cut-Off Date;

                  (ix) The amount of interest accrued but not paid to each Class
         of Group II Certificates entitled to interest since (a) the prior
         Distribution Date and (b) the Closing Date;

                  (x) The amount of funds advanced related to the Group II Loans
         by the related Servicer and the Master Servicer for such Distribution
         Date;

                  (xi) The total amount of Payoffs and Curtailments related to
         the Group II Loans received during the related Prepayment Period;

                  (xii) With respect to any Group II Loan that became an REO
         Property during the preceding calendar month, the loan number of such
         Group II Loan, the unpaid principal balance and the Scheduled Principal
         Balance of such Group II Loan;

                  (xiii) To the extent provided by the related Servicer, the
         book value of any Group II REO Property as of the close of business on
         the last Business Day of the calendar month preceding the Distribution
         Date;

                  (xiv) The aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Distribution Account related to the Group
         II Loans for such Distribution Date;



                                     -102-
<PAGE>

                  (xv) The Certificate Principal Balance of each Class of Group
         II Certificates, after giving effect to the distributions and
         allocations of Group II Realized Losses made on such Distribution Date,
         separately identifying any reduction thereof due to allocations of
         Group II Realized Losses;

                  (xvi) The aggregate amount of any Prepayment Interest
         Shortfalls and Curtailment Shortfalls related to the Group II Loans for
         such Distribution Date, to the extent not covered by payments by the
         Master Servicer pursuant to Section 3.20;

                  (xvii) The aggregate amount of Relief Act Interest Shortfalls
         related to the Group II Loans for such Distribution Date.

                  (xviii) The Group II Required Overcollateralization Amount and
         the Group II Credit Enhancement Percentage for such Distribution Date;

                  (xix) The Overcollateralization Increase Amount related to the
         Group II Certificates, if any, for such Distribution Date;

                  (xx) The Overcollateralization Reduction Amount related to the
         Group II Certificates, if any, for such Distribution Date;

                  (xxi) The Net WAC Rate Carryover Amount, if any, for such
         Distribution Date;

                  (xxii) The Net WAC Rate Carryover Amount, if any, outstanding
         after reimbursements therefor on such Distribution Date and any amounts
         received under the Cap Contracts (other than the Class I-A-1 Cap
         Contract);

                  (xxiii) The respective Pass-Through Rates applicable to each
         Class of Group II Certificates for such Distribution Date;

                  (xxiv) The amount of any deposit to the Group II Reserve Fund
         contemplated by Section 3.25;

                  (xxv) The balance of the Group II Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                  (xxvi) The amount of any withdrawal from the Group II Reserve
         Fund pursuant to the last paragraph of Section 4.3(a)(iii); and

                  (xxvii) The balance of the Group II Reserve Fund after all
         deposits and withdrawals on such Distribution Date.

                  (c) The Securities Administrator shall make such statements
(and, at its option, any additional files containing the same information in an
alternative format) in one report available each month to both the
Certificateholders of the Group I Certificates and the Certificateholders of the
Group II Certificates, the Trustee, Ambac and the Rating Agencies via the
Securities Administrator's internet website. The Securities Administrator's
internet website shall initially be located at http:\\www.ctslink.com and
assistance in using the website can be



                                     -103-
<PAGE>

obtained by calling the Securities Administrator's customer service desk at
1-301-815-6600. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Securities Administrator shall
have the right to change the way such statements are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Securities Administrator shall provide timely and adequate
notification to all above parties regarding any such changes.

         In the case of information furnished pursuant to subclauses (a)(i),
(b)(i), (a)(ii) and (b)(ii) above, the amounts shall be expressed as a dollar
amount per single Certificate of the relevant Class.

         Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish to each Person who at any time during
the calendar year was a Holder of a Regular Interest Certificate a statement
containing the information set forth in subclauses (a)(i), (b)(i), (a)(ii) and
(b)(ii) above, aggregated for such calendar year or applicable portion thereof
during which such person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time are
in force.

         Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.

         The Securities Administrator shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide.

         On each Distribution Date the Securities Administrator shall provide
Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each
Class of Certificates as of such Distribution Date, using a format and media
mutually acceptable to the Securities Administrator and Bloomberg.

         Section 4.7 ADVANCES.

         If the Monthly Payment on a Loan or a portion thereof is delinquent as
of its Due Date, other than as a result of interest shortfalls due to bankruptcy
proceedings or application of the Relief Act, and the related Servicer fails to
make an advance of the delinquent amount pursuant to the related Servicing
Agreement, the Master Servicer shall deposit in the related Distribution
Account, from its own funds or from amounts on deposit in such Distribution
Account that are held for future distribution, not later than the related
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such delinquency, net of



                                     -104-
<PAGE>

the Servicing Fee and Master Servicing Fee for such Loan except to the extent
the Master Servicer determines any such advance to be nonrecoverable from
Liquidation Proceeds, Insurance Proceeds or future payments on the Loan for
which such Advance was made. Any amounts held for future distribution and so
used shall be appropriately reflected in the Master Servicer's records and
replaced by the Master Servicer by deposit in the related Distribution Account
on or before any future Distribution Account Deposit Date to the extent that the
related Available Distribution Amount for the related Distribution Date
(determined without regard to Advances to be made on the related Distribution
Account Deposit Date) shall be less than the total amount that would be
distributed to the Classes of Certificateholders of Group I Certificates
pursuant to Section 4.1 or Group II Certificates pursuant to Section 4.3, as
applicable, on such Distribution Date if such amounts held for future
distributions had not been so used to make Advances. Subject to the foregoing,
the Master Servicer shall continue to make such Advances through the date that
the related Servicer is required to do so under its Servicing Agreement. In the
event the Master Servicer elects not to make an Advance because the Master
Servicer deems such Advance nonrecoverable pursuant to this Section 4.7, on the
Distribution Account Deposit Date, the Master Servicer shall present an
Officer's Certificate to the Trustee and, with respect to any determination with
respect to a Group I Mortgage Loan, Ambac (i) stating that the Master Servicer
elects not to make an Advance in a stated amount and (ii) detailing the reason
it deems the advance to be nonrecoverable.

         Section 4.8 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.

         Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount that the Trustee and the Securities Administrator reasonably
believe are applicable under the Code. The consent of Certificateholders shall
not be required for such withholding. In the event the Securities Administrator
does withhold any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Securities Administrator shall indicate the amount withheld to
such Certificateholders.

         Section 4.9 REMIC DISTRIBUTIONS.

                  (a) On each Distribution Date, the following amounts, in the
following order of priority and in accordance with the Remittance Report, shall
be distributed by REMIC I to REMIC III on account of the REMIC I Regular
Interests or withdrawn from the related Distribution Account and distributed to
the Holders of the Class R Certificates, as the case may be:

                  (i) first, to the Holders of REMIC I Regular Interest
         LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular Interest
         LTI-IO-3 and REMIC I Regular Interest LTI-IO-4, in an amount equal to
         (A) the Uncertificated Accrued Interest for such Distribution Date,
         plus (B) any amounts in respect thereof remaining unpaid from previous
         Distribution Dates and second, to the Holders of REMIC I Regular
         Interest LTI-1 and REMIC I Regular Interest LTI-P, in an amount equal
         to (A) the Uncertificated Accrued Interest for such Distribution Date,
         plus (B) any amounts in respect thereof remaining unpaid from previous
         Distribution Dates;



                                     -105-
<PAGE>

                  (ii) to the Holders of the REMIC I Regular Interest LTI-P, on
         the Distribution Date immediately following the expiration of the
         latest Prepayment Change term as identified on the Loan Schedule or any
         Distribution Date thereafter until $100 has been distributed pursuant
         to this clause;

                  (iii) on each Distribution Date, the remainder of the Group I
         Available Distribution Amount for such Distribution Date after the
         distributions made pursuant to clause (i) and clause (ii) above, first,
         to the Holders of REMIC I Regular Interest LTI-1 until the
         Uncertificated Principal Balance of such REMIC I Regular Interest is
         reduced to zero, and second, sequentially to the Holders of REMIC I
         Regular Interest LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I
         Regular Interest LTI-IO-3 REMIC I Regular Interest LTI-IO-4, until the
         Uncertificated Principal Balance of each such REMIC I Regular Interest
         is reduced to zero; and

                  (iv) to the Holders of the Class R Certificates (in respect of
         Component R-1), any amounts remaining after the distributions pursuant
         to clauses (i) through (iii) above.

         On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Group I Loans received during the related Prepayment Period
will be distributed by REMIC I to the Holders of REMIC I Regular Interest LTI-P.
The payment of the foregoing amounts to the Holders of REMIC I Regular Interest
LTI-P shall not reduce the Uncertificated Principal Balance thereof.

                  (b) On each Distribution Date, the following amounts, in the
following order of priority and in accordance with the Remittance Report, shall
be distributed by REMIC III to REMIC IV on account of the REMIC III Regular
Interests or withdrawn from the related Distribution Account and distributed to
the Holders of the Class R Certificates, as the case may be:

                  (i) first, to the Holders of REMIC III Regular Interest
         LTIII-IO-A and REMIC Regular Interest LTIII-IO-B, in an amount equal to
         (A) the Uncertificated Accrued Interest for such REMIC III Regular
         Interest for such Distribution Date, plus (B) any amounts in respect
         thereof remaining unpaid from previous Distribution Dates and then to
         Holders of REMIC III Regular Interest LTIII-1AA, REMIC III Regular
         Interest LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
         Regular Interest LTIII-1A3, REMIC III Regular Interest LTIII-1A4, REMIC
         III Regular Interest LTIII-1A5, REMIC III Regular Interest LTIII-1A6,
         REMIC III Regular Interest LTIII-1A7, REMIC III Regular Interest
         LTIII-1M1, REMIC III Regular Interest LTIII-1M2, REMIC III Regular
         Interest LTIII-1M3, REMIC III Regular Interest LTIII-1ZZ and REMIC III
         Regular Interest LTIII-1P, pro rata, in an amount equal to (A) the
         Uncertificated Accrued Interest for each such REMIC III Group I Regular
         Interest for such Distribution Date, plus (B) any amounts in respect
         thereof remaining unpaid from previous Distribution Dates. Amounts
         payable as Uncertificated Accrued Interest in respect of REMIC III
         Regular Interest LTIII-1ZZ shall be reduced and deferred when the REMIC
         III Group I Overcollateralization Amount is less than the REMIC III
         Group I Overcollateralization Target Amount, by the lesser of (x) the
         amount of such



                                     -106-
<PAGE>

         difference and (y) the REMIC III Group I Regular Interest LTIII-1ZZ
         Maximum Interest Deferral Amount and such amount will be payable to the
         Holders of REMIC III Regular Interest LTIII-1A1, REMIC III Regular
         Interest LTIII-1A2, REMIC III Regular Interest LTIII-1A3, REMIC III
         Regular Interest LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC
         III Regular Interest LTIII-1A6, REMIC III Regular Interest LTIII-1A7,
         REMIC III Regular Interest LTIII-1M1, REMIC III Regular Interest
         LTIII-1M2 and REMIC III Regular Interest LTIII-1M3 in the same
         proportion as the related Overcollateralization Increase Amount is
         allocated to the Corresponding Certificates, provided, however, that
         the Uncertificated Principal Balance of REMIC III Regular Interest
         LTIII-1ZZ is increased by such amount;

                  (ii) second, to the Holders of REMIC III Group I Regular
         Interests, in an amount equal to the remainder of the Group I Available
         Distribution Amount for such Distribution Date after the distributions
         made pursuant to clause (i) above, allocated as follows:

                            to the Holders of REMIC III Regular Interest
                    LTIII-1AA and REMIC III Regular Interest LTIII-1P, 98.00% of
                    such remainder (other than amounts payable under clause (d)
                    below), until the Uncertificated Principal Balance of such
                    REMIC III Regular Interest is reduced to zero, provided,
                    however, that the Uncertificated Principal Balance of REMIC
                    III Regular Interest LTIII-1P shall not be reduced until the
                    Distribution Date in February 2009 or any Distribution Date
                    thereafter, at which point such amount shall be distributed
                    to REMIC III Regular Interest LTIII-1P, until $100 has been
                    distributed pursuant to this clause;

                            to the Holders of REMIC III Regular Interest
                    LTIII-1A1, REMIC III Regular Interest LTIII-1A2, REMIC III
                    Regular Interest LTIII-1A3, REMIC III Regular Interest
                    LTIII-1A4, REMIC III Regular Interest LTIII-1A5, REMIC III
                    Regular Interest LTIII-1A6, REMIC III Regular Interest
                    LTIII-1A7, REMIC III Regular Interest LTIII-1M1, REMIC III
                    Regular Interest LTIII-1M2 and REMIC III Regular Interest
                    LTIII-1M3, 1.00% of such remainder (other than amounts
                    payable under clause (iii) below), in the same proportion as
                    principal payments are allocated to the Corresponding
                    Certificates, until the Uncertificated Principal Balances of
                    such REMIC III Regular Interests are reduced to zero;

                            to the Holders of REMIC III Regular Interest
                    LTIII-1ZZ, 1.00% of such remainder (other than amounts
                    payable under the proviso below), until the Uncertificated
                    Principal Balance of such REMIC III Regular Interest is
                    reduced to zero; then

                           any remaining amount to the Holders of the Class R
                  Certificates (in respect of Component R-3); and

                  (iii) third, to REMIC III Regular Interest LTIII-1P, 100% of
         the amount paid in respect of REMIC I Regular Interest LTI-P;



                                     -107-
<PAGE>

         provided, however, that (i) 98.00% and (ii) 2.00% of any principal
payments that are attributable to a related Overcollateralization Reduction
Amount shall be allocated to Holders of (i) REMIC III Regular Interest LTIII-1AA
and REMIC III Regular Interest LTIII-1P, in that order and (ii) REMIC III
Regular Interest LTIII-1ZZ, respectively; provided that REMIC III Regular
Interest LTIII-1P shall not be reduced until the Distribution Date in November
2008, at which point such amount shall be distributed to REMIC III Regular
Interest LTIII-1P, until $100 has been distributed pursuant to this clause.

                  (c) On each Distribution Date, the following amounts, in the
following order of priority and in accordance with the Remittance Report, shall
be distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests or withdrawn from the related Distribution Account and distributed to
the Holders of the Class R Certificates, as the case may be:

                  (i) first, to the Holders of REMIC II Regular Interest LTII-1,
         REMIC II Regular Interest LTII-2 and REMIC I Regular Interest LTII-P,
         in an amount equal to (A) the Uncertificated Accrued Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates;

                  (ii) to the Holders of the REMIC II Regular Interest LTII-P,
         on the Distribution Date immediately following the expiration of the
         latest Prepayment Change term as identified on the Loan Schedule or any
         Distribution Date thereafter until $100 has been distributed pursuant
         to this clause;

                  (iii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) and (ii) above, to the Holder
         of REMIC I Regular Interest LTII-1 and REMIC II Regular Interest
         LTII-2, until the Uncertificated Principal Balances of such REMIC II
         Regular Interests are reduced to zero; and

                  (iv) to the Holders of the Class R Certificates (in respect of
         Component R-2), any amounts remaining after the distributions pursuant
         to clauses (i) through (iii) above.

                  (d) On each Distribution Date, all amounts representing
Prepayment Charges in respect of the Group II Loans received during the related
Prepayment Period will be distributed by REMIC II to the Holders of REMIC II
Regular Interest LTII-P. The payment of the foregoing amounts to the Holders of
REMIC I Regular Interest LTII-P shall not reduce the Uncertificated Principal
Balance thereof.

                  (e) On each Distribution Date, the following amounts, in the
following order of priority and in accordance with the Remittance Report, shall
be distributed by REMIC III to REMIC IV on account of the REMIC III Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R Certificates, as the case may be:

                  (i) first, to Holders of REMIC III Regular Interest LTIII-2AA,
         REMIC III Regular Interest LTIII-2AR1, REMIC III Regular Interest
         LTIII-2AR2, REMIC III Regular Interest LTIII-2MR1, REMIC III Regular
         Interest LTIII-2MR2, REMIC III Regular Interest LTIII-2MR3, REMIC III
         Regular Interest LTIII-2ZZ and REMIC III



                                     -108-
<PAGE>

         Regular Interest LTIII-2P, pro rata, in an amount equal to (A) the
         Uncertificated Accrued Interest for each such REMIC III Group II
         Regular Interest for such Distribution Date, plus (B) any amounts in
         respect thereof remaining unpaid from previous Distribution Dates.
         Amounts payable as Uncertificated Accrued Interest in respect of REMIC
         III Regular Interest LTIII-2ZZ shall be reduced and deferred when the
         REMIC III Group II Overcollateralization Amount is less than the REMIC
         III Group II Overcollateralization Target Amount, by the lesser of (x)
         the amount of such difference and (y) the REMIC III Group II Regular
         Interest LTIII-2ZZ Maximum Interest Deferral Amount and such amount
         will be payable to the Holders of REMIC III Regular Interest
         LTIII-2AR1, REMIC III Regular Interest LTIII-2AR2, REMIC III Regular
         Interest LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2, REMIC III
         Regular Interest LTIII-2MR3 in the same proportion as the related
         Overcollateralization Increase Amount is allocated to the Corresponding
         Certificates, provided, however, that the Uncertificated Principal
         Balance of REMIC III Regular Interest LTIII-2ZZ is increased by such
         amount;

                  (ii) to Holders of REMIC III Regular Interest LTIII-2SUB1,
         REMIC III Regular Interest LTIII-2GRP1, REMIC III Regular Interest
         LTIII-2SUB2, REMIC III Regular Interest LTIII-2GRP2 and REMIC III
         Regular Interest LTIII-2XX, PRO RATA, in an amount equal to (A) the
         Uncertificated Accrued Interest for such Distribution Date, plus (B)
         any amounts in respect thereof remaining unpaid from previous
         Distribution Dates;

                  (iii) second, to the Holders of REMIC III Group II Regular
         Interests, in an amount equal to the REMIC III Group II Marker
         Allocation Percentage of the remainder of the Available Distribution
         Amount for such Distribution Date after the distributions made pursuant
         to clause (i) above, allocated as follows:

                            to the Holders of REMIC III Regular Interest
                    LTIII-2AA and REMIC III Regular Interest LTIII-2P, 98.00% of
                    such remainder (other than amounts payable under clause (d)
                    below), until the Uncertificated Principal Balance of such
                    REMIC III Regular Interest is reduced to zero, provided,
                    however, that the Uncertificated Principal Balance of REMIC
                    III Regular Interest LTIII-2P shall not be reduced until the
                    Distribution Date in [February 2009] or any Distribution
                    Date thereafter, at which point such amount shall be
                    distributed to REMIC III Regular Interest LTIII-2P, until
                    $100 has been distributed pursuant to this clause;

                            to the Holders of REMIC Regular Interest LTIII-2AR1,
                    REMIC Regular Interest LTIII-2AR2, REMIC III Regular
                    Interest LTIII-2MR1, REMIC III Regular Interest LTIII-2MR2,
                    REMIC III Regular Interest LTIII-2MR3, 1.00% of such
                    remainder (other than amounts payable under clause (d)
                    below), in the same proportion as principal payments are
                    allocated to the Corresponding Certificates, until the
                    Uncertificated Principal Balances of such REMIC III Regular
                    Interests are reduced to zero;



                                     -109-
<PAGE>

                            to the Holders of REMIC III Regular Interest
                    LTIII-2ZZ, 1.00% of such remainder (other than amounts
                    payable under the proviso below), until the Uncertificated
                    Principal Balance of such REMIC III Regular Interest is
                    reduced to zero; then

                           any remaining amount to the Holders of the Class R
                  Certificates (in respect of Component R-3); and

                  (iv) third, to REMIC III Regular Interest LTIII-2P, 100% of
         the amount paid in respect of REMIC I Regular Interest LTI-P;

         provided, however, that (i) 98.00% and (ii) 2.00% of any principal
payments that are attributable to an Overcollateralization Release Amount shall
be allocated to Holders of (i) REMIC III Regular Interest LTIII-2AA and REMIC
III Regular Interest LTIII-2P, in that order and (ii) REMIC III Regular Interest
LTIII-2ZZ, respectively; provided that REMIC III Regular Interest LTIII-2P shall
not be reduced until the Distribution Date in November 2008, at which point such
amount shall be distributed to REMIC III Regular Interest LTIII-2P, until $100
has been distributed pursuant to this clause.

                  (v) to the Holders of REMIC III Regular Interests, in an
         amount equal to the remainder of the REMIC III Sub WAC Allocation
         Percentage of Group II Available Distribution Amount for such
         Distribution Date after the distributions made pursuant to clause (i)
         above, such that distributions of principal shall be deemed to be made
         to the REMIC III Regular Interests first, so as to keep the
         Uncertificated Principal Balance of each REMIC III Regular Interest
         ending with the designation "GRP" equal to 0.01% of the aggregate
         Stated Principal Balance of the Group II Loans; second, to each REMIC
         III Regular Interest ending with the designation "SUB," so that the
         Uncertificated Balance of each such REMIC III Regular Interest is equal
         to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
         the Group II Loans over (y) the current Certificate Principal Balance
         of the Group II Senior Certificate (except that if any such excess is a
         larger number than in the preceding distribution period, the least
         amount of principal shall be distributed to such REMIC III Regular
         Interests such that the REMIC III Subordinated Balance Ratio is
         maintained); and third, any remaining principal to REMIC III Regular
         Interest LTIII-2XX.




                                     -110-
<PAGE>

                                   ARTICLE V
                                THE CERTIFICATES

         Section 5.1 THE CERTIFICATES.

                  (a) Each of the Certificates shall be substantially in the
forms annexed hereto as exhibits, and shall, on original issue, be executed and
authenticated by the Securities Administrator and delivered by the Trustee to or
upon the receipt of a written order to authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund. The
Certificates shall be issuable in Authorized Denominations.

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trust Fund by a Responsible Officer of the Securities
Administrator. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Securities Administrator shall bind the Trust Fund,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificate. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
such Certificate shall have been manually authenticated by the Securities
Administrator substantially in the form provided for herein, and such
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Subject to Section 5.3, the Class A Certificates and Class M Certificates shall
be Book-Entry Certificates. On the Closing Date, the Class CE, Class P and Class
R Certificates shall not be Book-Entry Certificates but shall be issued in fully
registered certificate form.

                  (b) Neither the Trustee nor the Securities Administrator shall
have any liability to the Trust Fund and shall be indemnified by the Trust Fund
for, any cost, liability or expense incurred by them arising from a registration
of a Certificate or transfer, pledge sale or other disposition of a Certificate
in reliance upon a certification, Officer's Certificate, affidavit, ruling or
Opinion of Counsel described in this Article V.

         Section 5.2 CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF
PRINCIPAL AND INTEREST; AUTHORIZED DENOMINATIONS. The aggregate principal amount
of the Group I Certificates that may be authenticated and delivered under this
Agreement is limited to the aggregate Principal Balance of the Group I Loans as
of the Cut-Off Date, as specified in the Preliminary Statement to this
Agreement, except for Certificates authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Section 5.3. The aggregate principal amount of the Group II Certificates that
may be authenticated and delivered under this Agreement is limited to the
aggregate Principal Balance of the Group II Loans as of the Cut-Off Date, as
specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 5.3. Such
aggregate principal amount shall be allocated among one or more Classes having
designations, types of interests, initial per annum Pass-Through Rates, initial
Certificate Principal Balances and last scheduled Distribution Dates as
specified in the Preliminary Statement to this Agreement. The aggregate
Percentage Interest of each Class of Certificates of which the Certificate
Principal Balance equals zero as of the



                                     -111-
<PAGE>

Cut-Off Date that may be authenticated and delivered under this Agreement is
limited to 100%. Certificates shall be issued in Authorized Denominations.

         Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
The Securities Administrator shall cause to be kept at its Corporate Trust
Office a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Securities Administrator shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided.

         Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office of the Securities Administrator maintained for such
purpose pursuant to the foregoing paragraph for certificate transfer and
surrender purposes, and, in the case of the Class CE Certificates, the Class P
Certificates or the Class R Certificates, upon satisfaction of the conditions
set forth in Sections 5.3(c), (d) and (e) below, as applicable, the Securities
Administrator on behalf of the Trust shall execute, authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same aggregate Percentage Interest.

         At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in Authorized Denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Securities Administrator shall execute, authenticate and deliver
the Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Trustee or the Securities
Administrator) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Securities Administrator duly
executed by, the Holder thereof or his attorney duly authorized in writing.

                  (a) Except as provided herein, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Trustee or the Securities Administrator except to another
Depository; (ii) the Depository shall maintain book-entry records with respect
to the Certificate Owners and with respect to ownership and transfers of such
Certificates; (iii) ownership and transfers of registration of such Certificates
on the books of the Depository shall be governed by applicable rules established
by the Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee and the
Securities Administrator shall for all purposes deal with the Depository as
representative of the Certificate Owners of the Certificates for purposes of
exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representative shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; (vi)
the Trustee and the Securities Administrator may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee, the
Securities Administrator and



                                     -112-
<PAGE>

either the Trustee's or the Securities Administrator's agents, employees,
officers and directors as the absolute owner of the Certificates for all
purposes whatsoever.

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.

                  (b) If (i)(x) the Depository or the Depositor advises the
Securities Administrator in writing that the Depository is no longer willing or
able to discharge properly its responsibilities as Depository and (y) the
Securities Administrator or the Depositor is unable to locate a qualified
successor, (ii) the Depositor, at its sole option, with the consent of the
Securities Administrator, elects to terminate the book-entry system through the
Depository or (iii) after the occurrence of a Master Servicer Event of Default,
the Certificate Owners of the Book-Entry Certificates representing Percentage
Interests of such Classes aggregating not less than 66% advise the Securities
Administrator and Depository through the Depository Participants in writing that
the continuation of a book-entry system through the Depository is no longer in
the best interests of the Certificate Owners, the Securities Administrator shall
notify all Holders of Book-Entry Certificates of the occurrence of any such
event and of the availability of definitive, fully registered Certificates
("Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Securities Administrator of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Securities Administrator shall, at the Depositor's expense, in
the case of (i) and (ii) above, or the Master Servicer's expense, in the case of
(iii) above, execute on behalf of the Trust and authenticate the Definitive
Certificates. None of the Depositor, the Master Servicer, the Trustee or the
Securities Administrator shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee,
the Securities Administrator, the Master Servicer and the Depositor shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.

                  (c) No Transfer of a Class CE Certificate, Class P Certificate
or Class R Certificate shall be made unless such Transfer is made pursuant to an
effective registration statement under the Securities Act and any applicable
state securities laws or such transfer is made pursuant to the requirements of
this Section 5.3 and is exempt from the registration requirements under the
Securities Act and such state securities laws. In the event of any such transfer
in reliance upon an exemption from the Securities Act and such state securities
laws, in order to assure compliance with the Securities Act and such state
securities laws, either (i) the Certificateholder desiring to effect such
Transfer shall certify to the Trustee and the Securities Administrator in
writing the facts surrounding the Transfer in substantially the form set forth
in EXHIBIT D (the "TRANSFEROR CERTIFICATE") and the prospective Transferee shall
certify to the Trustee and the Securities Administrator in writing the facts
surrounding the Transfer by




                                     -113-
<PAGE>

delivering a letter in substantially the form of either EXHIBIT E (the
"Investment Letter") or EXHIBIT F (the "Rule 144A Letter") or (ii) there shall
be delivered to the Trustee, the Depositor and the Securities Administrator an
Opinion of Counsel acceptable to and in form reasonably satisfactory to the
Trustee, the Depositor and the Securities Administrator that such Transfer may
be made pursuant to an exemption from the Securities Act, which Opinion of
Counsel shall not be an expense of the Depositor, the Seller, the Master
Servicer, the Securities Administrator or the Trustee. Each Holder of a Class CE
Certificate, Class P Certificate or Class R Certificate desiring to effect such
Transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor,
the Seller, the Securities Administrator and the Master Servicer against any
liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.

                  (d) No transfer of a Class CE Certificate, Class P Certificate
or Class R Certificate or any interest therein shall be made to any Plan subject
to ERISA or Section 4975 of the Code (each, a "Plan"), any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "Plan Assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as
certified by each such Transferee in the form of EXHIBIT G, unless the
Securities Administrator is provided with an Opinion of Counsel for the benefit
of the Depositor, the Master Servicer, the Trustee, the Securities Administrator
and the Master Servicer and on which they may rely which establishes to the
satisfaction of each of them that the purchase of such Certificates is
permissible under applicable law, will not constitute or result in any
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, any Servicer or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator or the Trust Fund. Neither a certification nor an
Opinion of Counsel will be required in connection with the initial transfer of
any such Certificate by the Depositor to an affiliate of the Depositor (in which
case, the Depositor or any affiliate thereof shall have deemed to have
represented that such affiliate is not a Plan or a Person investing Plan Assets)
and the Trustee and the Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee
or the Securities Administrator, shall be a written representation) from the
Depositor of the status of such transferee as an affiliate of the Depositor.

         Each Transferee of a Class M Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 94-84 or FAN
97-03, as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE 2000-58,
65 Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41 67 Fed. Reg. 54487
(August 22, 2002) (the "Exemption"), and that it understands that there are
certain conditions to the availability of the Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by a Rating Agency or (c) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in U.S.



                                     -114-
<PAGE>

Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.

         If any Class M Certificate, Class CE Certificate, Class P Certificate
or Class R Certificate or any interest therein is acquired or held in violation
of the provisions of this Section 5.3(d), the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the two
preceding paragraphs shall indemnify and hold harmless the Depositor, the Master
Servicer, the Trustee, the Securities Administrator and the Trust from and
against any and all liabilities, claims, costs or expenses incurred by those
parties as a result of that acquisition or holding.

                  (e) Each Transferee of a Class R Certificate shall be deemed
by the acceptance or acquisition of the related Ownership Interest to have
agreed to be bound by the following provisions and to have irrevocably appointed
the Depositor or its designee as its attorney-in-fact to negotiate the terms of
any mandatory sale under clause (v) below and to execute all instruments of
transfer and to do all other things necessary in connection with any such sale,
and the rights of each Transferee of a Class R Certificate are expressly subject
to the following provisions:

                  (i) Each such Transferee shall be a Permitted Transferee and
         shall promptly notify the Securities Administrator of any change or
         impending change in its status as a Permitted Transferee.

                  (ii) No Person shall acquire an Ownership Interest in a Class
         R Certificate unless such Ownership Interest is a PRO RATA undivided
         interest.

                  (iii) In connection with any proposed transfer of any
         Ownership Interest in a Class R Certificate, the Securities
         Administrator shall as a condition to registration of the transfer,
         require delivery to it, in form and substance satisfactory to it, of
         each of the following:

                           (A) an affidavit in the form of EXHIBIT C hereto from
                  the proposed Transferee to the effect that such Transferee is
                  a Permitted Transferee and that it is not acquiring its
                  Ownership Interest in the Class R Certificate that is the
                  subject of the proposed transfer as a nominee, trustee or
                  agent for any Person who is not a Permitted Transferee; and

                           (B) a covenant of the proposed Transferee to the
                  effect that the proposed Transferee agrees to be bound by and
                  to abide by the transfer restrictions applicable to the Class
                  R Certificates.

                  (iv) Any attempted or purported transfer of any Ownership
         Interest in a Class R Certificate in violation of the provisions of
         this Section shall be absolutely null and void and shall vest no rights
         in the purported Transferee. If any purported Transferee shall, in
         violation of the provisions of this Section, become a Holder of a Class
         R Certificate, then the prior Holder of such Class R Certificate that
         is a Permitted



                                     -115-
<PAGE>

         Transferee shall, upon discovery that the registration of transfer of
         such Class R Certificate was not in fact permitted by this Section, be
         restored to all rights as Holder thereof retroactive to the date of
         registration of transfer of such Class R Certificate. The Securities
         Administrator shall be under no liability to any Person for any
         registration of transfer of a Class R Certificate that is in fact not
         permitted by this Section or for making any distributions due on such
         Class R Certificate to the Holder thereof or taking any other action
         with respect to such Holder under the provisions of this Agreement so
         long as the Securities Administrator received the documents specified
         in clause (iii). The Securities Administrator shall be entitled to
         recover from any Holder of a Class R Certificate that was in fact not a
         Permitted Transferee at the time such distributions were made all
         distributions made on such Class R Certificate. Any such distributions
         so recovered by the Securities Administrator shall be distributed and
         delivered by the Securities Administrator to the prior Holder of such
         Class R Certificate that is a Permitted Transferee.

                  (v) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Securities Administrator shall
         have the right but not the obligation, without notice to the Holder of
         such Class R Certificate or any other Person having an Ownership
         Interest therein, to notify the Depositor to arrange for the sale of
         such Class R Certificate. The proceeds of such sale, net of commissions
         (which may include commissions payable to the Depositor or its
         affiliates in connection with such sale), expenses and taxes due, if
         any, will be remitted by the Securities Administrator to the previous
         Holder of such Class R Certificate that is a Permitted Transferee,
         except that in the event that the Securities Administrator determines
         that the Holder of such Class R Certificate may be liable for any
         amount due under this Section or any other provisions of this
         Agreement, the Securities Administrator may withhold a corresponding
         amount from such remittance as security for such claim. The terms and
         conditions of any sale under this clause (v) shall be determined in the
         sole discretion of the Securities Administrator and it shall not be
         liable to any Person having an Ownership Interest in a Class R
         Certificate as a result of its exercise of such discretion.

                  (vi) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Securities Administrator upon
         receipt of reasonable compensation will provide to the Internal Revenue
         Service, and to the persons specified in Sections 860E(e)(3) and (6) of
         the Code, information needed to compute the tax imposed under Section
         860E(e)(5) of the Code on transfers of Class R interests to
         Disqualified Organizations.

         The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Securities Administrator, in form and substance satisfactory to
the Securities Administrator, (i) written notification from each Rating Agency
that the removal of the restrictions on transfer set forth in this Section will
not cause such Rating Agency to downgrade its rating of the Certificates and
(ii) an Opinion of Counsel to the effect that such removal will not cause any
REMIC created hereunder to fail to



                                     -116-
<PAGE>

qualify as a REMIC. The Holder of the Class R Certificate issued hereunder,
while not a Disqualified Organization, is the Tax Matters Person.

                  (f) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Securities
Administrator may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

         All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Securities Administrator and disposed of pursuant to
its standard procedures.

         Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (i) any mutilated Certificate is surrendered to the Trustee or the
Securities Administrator, or (ii) the Trustee or the Securities Administrator
receives evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee and the Securities
Administrator such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Securities Administrator
that such Certificate has been acquired by a protected purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Percentage Interest. Upon the issuance of any new
Certificate under this Section 5.4, the Trustee or the Securities Administrator
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. Any replacement Certificate issued pursuant to
this Section 5.4 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost or
stolen Certificate shall be found at any time.

         Section 5.5 PERSONS DEEMED OWNERS.

         The Depositor, the Securities Administrator, the Master Servicer, the
Trustee, Ambac and any agent of any of them may treat the Person in whose name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions pursuant to Section 4.1 and 4.3, as applicable, and
for all other purposes whatsoever, and none of the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, Ambac or any agent of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee or
Ambac shall be affected by notice to the contrary.



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<PAGE>

                                   ARTICLE VI
           THE DEPOSITOR, MASTER SERVICER AND THE CREDIT RISK MANAGER

         Section 6.1 LIABILITY OF THE DEPOSITOR AND THE MASTER SERVICER.

         The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor and
Master Servicer and undertaken hereunder by the Depositor and the Master
Servicer herein.

         Section 6.2 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER
                     SERVICER.

         Subject to the following paragraph, the Depositor shall keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer shall keep in full effect its existence, rights and franchises
as a corporation under the laws of the jurisdiction of its formation. The
Depositor and the Master Servicer each shall obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Loans and to
perform its respective duties under this Agreement.

         The Depositor or the Master Servicer may be merged or consolidated with
or into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that the Rating Agencies' ratings of the Certificates
in effect immediately prior to such merger or consolidation will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to
such effect from the Rating Agencies).

         Section 6.3 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER, THE SERVICERS, THE SECURITIES ADMINISTRATOR AND OTHERS.

         None of the Depositor, the Master Servicer, the Securities
Administrator, the Servicers or any of the directors, officers, employees or
agents of the Depositor, the Master Servicer, the Securities Administrator or
the Servicers shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement or the Servicing Agreements, or
for errors in judgment; provided, however, that this provision shall not protect
the Depositor, the Master Servicer, the Securities Administrator or any such
person against any breach of warranties, representations or covenants made
herein or in the Servicing Agreements, or against any specific liability imposed
on the Master Servicer, the Securities Administrator or the Servicers pursuant
hereto or pursuant to the Servicing Agreements, or against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder or under the Servicing Agreements. The
Depositor, the Master Servicer, the Securities Administrator, the Servicers and




                                     -118-
<PAGE>

any director, officer, employee or agent of the Depositor, the Master Servicer,
the Securities Administrator or the Servicers may rely in good faith on any
document of any kind which, PRIMA FACIE, is properly executed and submitted by
any Person respecting any matters arising hereunder or under the Servicing
Agreements. The Depositor, the Master Servicer, the Servicers, the Securities
Administrator, the Custodian and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Servicers, the Custodian or the Securities
Administrator shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement, the Certificates or any Servicing Agreement, or any
loss, liability or expense incurred by any of such Persons other than by reason
of such Person's willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties hereunder. None of the Depositor, the Master Servicer,
the Securities Administrator, the Custodian or any Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement, the Custodial
Agreement or the applicable Servicing Agreement and, in its opinion, does not
involve it in any expense or liability; provided, however, that each of the
Depositor, the Master Servicer, the Custodian and the Securities Administrator
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Master Servicer, the Custodian, the Servicers and the Securities
Administrator shall be entitled to be reimbursed therefor from the Distribution
Account as and to the extent provided in Article III, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Distribution Account.

         Section 6.4 LIMITATION ON RESIGNATION OF THE MASTER SERVICER.

         The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor Master Servicer shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.

         Section 6.5 ASSIGNMENT OF MASTER SERVICING.

         The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall have a net worth
of not less than $15,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause



                                     -119-
<PAGE>

(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); and (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial agreement
from and after the effective date of such agreement; (ii) each Rating Agency
shall be given prior written notice of the identity of the proposed successor to
the Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an officer's certificate and
an Opinion of Independent counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising prior to
the effective date thereof.

         Section 6.6 RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER.

         The Master Servicer shall afford the Depositor and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer in respect of the Master Servicer's rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish to the
Depositor and the Trustee the most recent financial statements of its parent and
such other information relating to the Master Servicer's capacity to perform its
obligations under this Agreement as it possesses. To the extent such information
is not otherwise available to the public, the Depositor and the Trustee shall
not disseminate any information obtained pursuant to the preceding two sentences
without the Master Servicer's written consent, except as required pursuant to
this Agreement or to the extent that it is appropriate to do so (i) in working
with legal counsel, auditors, taxing authorities or other governmental agencies
or (ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee or the Trust Fund, and in any case, the Depositor or the
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

         Section 6.7 DUTIES OF THE CREDIT RISK MANAGER.

         For and on behalf of the Depositor, pursuant to the Credit Risk
Management Agreements the Credit Risk Manager will provide reports and
recommendations concerning certain



                                     -120-
<PAGE>

delinquent and defaulted Loans, and as to the collection of any Prepayment
Charges with respect to the Loans. Such reports and recommendations will be
based upon information provided to the Credit Risk Manager pursuant to the
related Credit Risk Management Agreement, and the Credit Risk Manager shall look
solely to the related Servicer for all information and data (including loss and
delinquency information and data) relating to the servicing of the related
Loans. Upon any termination of the Credit Risk Manager or the appointment of a
successor Credit Risk Manager, the Depositor shall give written notice thereof
to the Servicers, the Master Servicer, the Trustee, Ambac and each Rating
Agency. Notwithstanding the foregoing, the termination of the Credit Risk
Manager pursuant to this Section shall not become effective until the
appointment of a successor Credit Risk Manager.

         Section 6.8 LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.

         Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by a Servicer under a Credit Risk Management
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Credit Risk Manager or any such person against liability
that would otherwise be imposed by reason of willful malfeasance or bad faith in
its performance of its duties. The Credit Risk Manager and any director,
officer, employee, or agent of the Credit Risk Manager may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder, and may rely in good faith upon
the accuracy of information furnished by a Servicer pursuant to a Servicer
Credit Risk Management Agreement in the performance of its duties thereunder and
hereunder.

         Section 6.9 REMOVAL OF THE CREDIT RISK MANAGER.

         The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders evidencing, in aggregate, not less than 66 2/3% of the
aggregate Percentage Interests of all Classes of Certificates, in the exercise
of its or their sole discretion. The Certificateholders shall provide written
notice of the Credit Risk Manager's removal to the Trustee. Upon receipt of such
notice, the Trustee shall provide written notice to the Credit Risk Manager of
its removal, which shall be effective upon receipt of such notice by the Credit
Risk Manager.




                                     -121-
<PAGE>




                                  ARTICLE VII
                                     DEFAULT

         Section 7.1 MASTER SERVICER EVENTS OF DEFAULT.

                  (a) "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                  (i) [Reserved];

                  (ii) any failure on the part of the Master Servicer duly to
         observe or perform in any material respect any other of the covenants
         or agreements on the part of the Master Servicer contained in this
         Agreement, or the breach by the Master Servicer of any representation
         and warranty contained in Section 2.5, which continues unremedied for a
         period of 30 days after the date on which written notice of such
         failure, requiring the same to be remedied, shall have been given to
         the Master Servicer by the Depositor or the Trustee or to the Master
         Servicer, the Depositor and the Trustee by the Holders of Certificates
         evidencing, in aggregate, not less than 25% of the aggregate
         Certificate Principal Balance of the Certificates; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and such decree or order shall have remained in force
         undischarged or unstayed for a period of 90 days; or

                  (iv) the Master Servicer shall consent to the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceedings
         of or relating to it or of or relating to all or substantially all of
         its property; or

                  (v) the Master Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of any applicable insolvency or reorganization statute, make
         an assignment for the benefit of its creditors, or voluntarily suspend
         payment of its obligations; or

                  (vi) any failure of the Master Servicer to make any Advance on
         any Distribution Account Deposit Date required to be made from its own
         funds pursuant to Section 4.7 which continues unremedied until 3:00
         p.m. New York time on the Business Day immediately following the
         Distribution Account Deposit Date.

If a Master Servicer Event of Default described in clauses (ii) through (v) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
evidencing, in aggregate, not less than 51% of the aggregate



                                     -122-
<PAGE>

Certificate Principal Balance of the Certificates, the Trustee shall, by notice
in writing to the Master Servicer (and to the Depositor if given by the Trustee
or to the Trustee if given by the Depositor) with a copy to each Rating Agency,
terminate all of the rights and obligations of the Master Servicer (and the
Securities Administrator if the Master Servicer and the Securities Administrator
are the same entity) in its capacity as Master Servicer (and in its capacity as
Securities Administrator if the Master Servicer and the Securities Administrator
are the same entity) under this Agreement, to the extent permitted by law, and
in and to the Loans and the proceeds thereof. Except as otherwise provided in
Section 7.4, if a Master Servicer Event of Default described in clause (i) or
(vi) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer (and the Securities Administrator if the Master Servicer and the
Securities Administrator are the same entity) in its capacity as Master Servicer
under this Agreement (and in its capacity as Securities Administrator if the
Master Servicer and the Securities Administrator are the same entity) and in and
to the Loans and the proceeds thereof. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
(and, if applicable, the Securities Administrator) under this Agreement, whether
with respect to the Certificates (other than as a Holder of any Certificate) or
the Loans or otherwise, shall pass to and be vested in the Trustee pursuant to
and under this Section, and, without limitation, the Trustee is hereby
authorized and empowered, as attorney-in-fact or otherwise, to execute and
deliver, on behalf of and at the expense of the Master Servicer, (and, if
applicable, the Securities Administrator) any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Loans and related
documents, or otherwise. The Master Servicer (and, if applicable, the Securities
Administrator) agrees promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide the Trustee with all documents and records
requested by it to enable it to assume the Master Servicer's (and, if
applicable, the Securities Administrator's) functions under this Agreement, and
to cooperate with the Trustee in effecting the termination of the Master
Servicer's (and, if applicable, the Securities Administrator's) responsibilities
and rights under this Agreement (provided, however, that the Master Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of Advances or otherwise, and shall continue to be entitled to the
benefits of Section 6.3, notwithstanding any such termination, with respect to
events occurring prior to such termination). For purposes of this Section 7.1,
the Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Default unless a Responsible Officer of the Trustee assigned to and working in
the Trustee's Corporate Trust Office has actual knowledge thereof or unless
written notice of any event which is in fact such a Master Servicer Event of
Default is received by the Trustee and such notice references the Certificates,
the Trust or this Agreement. The Trustee shall promptly notify the Rating
Agencies of the occurrence of a Master Servicer Event of Default of which it has
knowledge as provided above.

         Section 7.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer (and, if applicable, the Securities Administrator) in its capacity as
Master Servicer (and, if applicable, the Securities Administrator) under this
Agreement and the transactions set forth or provided for herein, and all



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the responsibilities, duties and liabilities relating thereto and arising
thereafter shall be assumed by the Trustee (except for any representations or
warranties of the Master Servicer under this Agreement, the responsibilities,
duties and liabilities contained in Section 2.3 and the obligation to deposit
amounts in respect of losses pursuant to Section 3.23(c)) by the terms and
provisions hereof including, without limitation, the Master Servicer's
obligations to make Advances no later than each Distribution Date pursuant to
Section 4.7; provided, however, that if the Trustee is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.7; and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 7.1 shall not be considered a default by the Trustee as
successor to the Master Servicer hereunder. As compensation therefor, the
Trustee shall be entitled to the Master Servicing Fee and all funds relating to
the Loans, investment earnings on the Distribution Accounts and all other
remuneration to which the Master Servicer would have been entitled if it had
continued to act hereunder. Notwithstanding the above and subject to the
immediately following paragraph, the Trustee may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans or if the Holders of
Certificates evidencing, in aggregate, not less than 51% of the aggregate
Certificate Principal Balance of the Certificates so request in writing promptly
appoint or petition a court of competent jurisdiction to appoint, an established
mortgage loan servicing institution acceptable to each Rating Agency and having
a net worth of not less than $15,000,000, as the successor to the Master
Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement.

         No appointment of a successor to the Master Servicer (and, if
applicable, the Securities Administrator) under this Agreement shall be
effective until the assumption by the successor of all of the Master Servicer's
(and, if applicable, the Securities Administrator's) responsibilities, duties
and liabilities hereunder. In connection with such appointment and assumption
described herein, the Trustee may make such arrangements for the compensation of
such successor out of payments on Loans as it and such successor shall agree;
PROVIDED, HOWEVER, that no such compensation shall be in excess of that
permitted the Master Servicer (and, if applicable, the Securities Administrator)
as such hereunder. The Depositor, the Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Pending appointment of a successor to the Master Servicer under
this Agreement, the Trustee shall act in such capacity as hereinabove provided.
The transition costs and expenses incurred by the Trustee in connection with the
replacement of the Master Servicer (and, if applicable, the Securities
Administrator) shall be reimbursed out of the Trust.

         Section 7.3 NOTIFICATION TO CERTIFICATEHOLDERS.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.1 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.2 above, the Trustee shall give prompt written notice
thereof to the Certificateholders at their respective addresses appearing in the
Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer




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<PAGE>

Event of Default or five days after a Responsible Officer of the Trustee becomes
aware of the occurrence of such an event, the Trustee shall transmit by mail to
all Holders of Certificates notice of each such occurrence, unless such default
or Master Servicer Event of Default shall have been cured or waived.

         Section 7.4 WAIVER OF MASTER SERVICER EVENTS OF DEFAULT.

         The Holders evidencing, in aggregate, not less than 66 2/3% of the
aggregate Percentage Interests of the Certificates affected by any default or
Master Servicer Event of Default hereunder may waive such default or Master
Servicer Event of Default; PROVIDED, HOWEVER, that a default or Master Servicer
Event of Default under clause (i) or (vi) of Section 7.1 may be waived only by
all of the Holders of the Regular Interest Certificates. Upon any such waiver of
a default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.



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                                  ARTICLE VIII
             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

         Section 8.1 DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.

         The Trustee, prior to the occurrence of a Master Servicer Event of
Default and after the curing or waiver of all Master Servicer Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. During the continuance of a Master Servicer Event of Default, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.

         Each of the Trustee and the Securities Administrator, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to it, which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement. If any such instrument is found not to conform on its face to the
requirements of this Agreement, the Trustee or the Securities Administrator, as
the case may be, shall take such action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to its
satisfaction, the Securities Administrator shall provide notice to the Trustee
thereof and the Trustee shall provide notice to the Certificateholders.

         No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; PROVIDED,
HOWEVER, that:

                  (i) Prior to the occurrence of a Master Servicer Event of
         Default, and after the curing or waiver of all such Master Servicer
         Events of Default which may have occurred with respect to the Trustee,
         and at all times with respect to the Securities Administrator, the
         duties and obligations of the Trustee and the Securities Administrator
         shall be determined solely by the express provisions of this Agreement,
         neither the Trustee nor the Securities Administrator shall be liable
         except for the performance of such duties and obligations as are
         specifically set forth in this Agreement, no implied covenants or
         obligations shall be read into this Agreement against the Trustee or
         the Securities Administrator and, in the absence of bad faith on the
         part of the Trustee or the Securities Administrator, respectively, the
         Trustee or the Securities Administrator, respectively, may conclusively
         rely, as to the truth of the statements and the correctness of the
         opinions expressed therein, upon any certificates or opinions furnished
         to the Trustee or the Securities Administrator, respectively, that
         conform to the requirements of this Agreement;

                  (ii) Neither the Trustee nor the Securities Administrator
         shall be liable for an error of judgment made in good faith by a
         Responsible Officer or Responsible Officers of the Trustee or an
         officer or officers of the Securities Administrator,




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<PAGE>

         respectively, unless it shall be proved that the Trustee or the
         Securities Administrator, respectively, was negligent in ascertaining
         the pertinent facts; and

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be liable with respect to any action taken, suffered or omitted
         to be taken by it in good faith in accordance with the direction of the
         Holders of Certificates evidencing, in aggregate, not less than 25% (or
         such other percentage set forth in this Agreement) of the aggregate
         Certificate Principal Balance of the Certificates, relating to the
         time, method and place of conducting any proceeding for any remedy
         available to the Trustee or the Securities Administrator or exercising
         any trust or power conferred upon the Trustee or the Securities
         Administrator under this Agreement.

         Section 8.2 CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES
                     ADMINISTRATOR.

                  (a) Except as otherwise provided in Section 8.1:

                  (i) The Trustee and the Securities Administrator may request
         and rely upon and shall be protected in acting or refraining from
         acting upon any resolution, Officers' Certificate, certificate of
         auditors or any other certificate, statement, instrument, opinion,
         report, notice, request, consent, order, appraisal, bond or other paper
         or document reasonably believed by it to be genuine and to have been
         signed or presented by the proper party or parties;

                  (ii) The Trustee and the Securities Administrator may consult
         with counsel of its selection and any advice of such counsel or any
         Opinion of Counsel shall be full and complete authorization and
         protection in respect of any action taken or suffered or omitted by it
         hereunder in good faith and in accordance with such advice or Opinion
         of Counsel;

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be under any obligation to exercise any of the trusts or powers
         vested in it by this Agreement or to institute, conduct or defend any
         litigation hereunder or in relation hereto at the request, order or
         direction of any of the Certificateholders, pursuant to the provisions
         of this Agreement, unless such Certificateholders shall have offered to
         the Trustee or the Securities Administrator, as the case may be,
         reasonable security or indemnity satisfactory to it against the costs,
         expenses and liabilities which may be incurred therein or thereby;
         nothing contained herein shall, however, relieve the Trustee of the
         obligation, upon the occurrence of a Master Servicer Event of Default
         (which has not been cured or waived), to exercise such of the rights
         and powers vested in it by this Agreement, and to use the same degree
         of care and skill in their exercise as a prudent person would exercise
         or use under the circumstances in the conduct of such person's own
         affairs;

                  (iv) Neither the Trustee nor the Securities Administrator
         shall be liable for any action taken, suffered or omitted by it in good
         faith and believed by it to be authorized or within the discretion or
         rights or powers conferred upon it by this Agreement;



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<PAGE>

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing or waiver of all Master Servicer
         Events of Default which may have occurred with respect to the Trustee,
         and at all times with respect to the Securities Administrator, neither
         the Trustee nor the Securities Administrator shall be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document, unless
         requested in writing to do so by the Holders of Certificates
         evidencing, in aggregate, not less than 25% of the Trust Fund;
         PROVIDED, HOWEVER, that if -------- ------- the payment within a
         reasonable time to the Trustee or the Securities Administrator of the
         costs, expenses or liabilities likely to be incurred by it in the
         making of such investigation is, in the opinion of the Trustee or the
         Securities Administrator, as applicable, not reasonably assured to the
         Trustee or the Securities Administrator by such Certificateholders, the
         Trustee or the Securities Administrator, as applicable, may require
         reasonable indemnity satisfactory to it against such expense, or
         liability from such Certificateholders as a condition to taking any
         such action;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                  (vii) The Securities Administrator shall not be liable for any
         loss resulting from the investment of funds held in a Distribution
         Account at the direction of the Master Servicer pursuant to Section
         3.23(c);

                  (viii) Neither the Trustee nor the Securities Administrator
         shall be liable for any action taken, suffered, or omitted to be taken
         by it in good faith and reasonably believed by it to be authorized or
         within the discretion or rights or powers conferred upon it by this
         Agreement;

                  (ix) The Trustee shall not be deemed to have notice of any
         default or Master Servicer Event of Default unless a Responsible
         Officer of the Trustee has actual knowledge thereof or unless written
         notice of any event which is in fact such a default is received by the
         Trustee at the Corporate Trust Office of the Trustee, and such notice
         references the Certificates and this Agreement;

                  (x) The rights, privileges, protections, immunities and
         benefits given to the Trustee, including, without limitation, its right
         to be indemnified, are extended to, and shall be enforceable by, each
         agent, custodian and other Person employed to act hereunder; and

                  (b) The Trustee is hereby directed by the Depositor to execute
each Cap Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap
Contracts, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contracts at
closing shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contracts, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contracts.



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<PAGE>

                  (c) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

         Section 8.3 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
                     CERTIFICATES OR LOANS.

         The recitals contained herein and in the Certificates (other than the
signature of the Securities Administrator, the authentication of the Securities
Administrator on the Certificates, the acknowledgments of the Trustee contained
in Article II and the representations and warranties of the Trustee in Section
8.12) shall be taken as the statements of the Depositor and neither the Trustee
nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 8.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Loan or related document. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor or the Master Servicer in respect of the Loans or deposited in or
withdrawn from the Distribution Account.

         Section 8.4 TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR MAY
OWN CERTIFICATES.

         Each of the Trustee, the Master Servicer and the Securities
Administrator in its individual capacity or any other capacity may become the
owner or pledgee of Certificates and may transact business with other interested
parties and their Affiliates with the same rights it would have if it were not
the Trustee, the Master Servicer or the Securities Administrator.

         Section 8.5 FEES AND EXPENSES OF TRUSTEE AND SECURITIES ADMINISTRATOR.

         The fees of the Trustee and the Securities Administrator hereunder and
of Wells Fargo under the Custodial Agreement shall be paid in accordance with a
side letter agreement with the Master Servicer and at the sole expense of the
Master Servicer. In addition, the Trustee, the Securities Administrator, the
Custodian and any director, officer, employee or agent of the Trustee, the
Securities Administrator and the Custodian shall be indemnified by the Trust and
held harmless against any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee or the Securities
Administrator in connection with any default administration to be performed by
the Trustee or the Securities Administrator pursuant to this Agreement or other
agreements related hereto and any claim or legal action or any pending or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its respective obligations and duties under this
Agreement or the Cap Contracts, including other agreements related hereto, other
than any loss, liability or expense (i) for which the Trustee is indemnified by
the Master Servicer, (ii) that constitutes a specific liability of the Trustee
or the Securities Administrator pursuant to Section 10.1(g) or (iii) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder by reason of reckless
disregard of obligations and duties



                                     -129-
<PAGE>

hereunder. The Master Servicer agrees to indemnify the Trustee, from, and hold
the Trustee harmless against, any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by the Trustee by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of its duties under this Agreement or by reason of the Master
Servicer's reckless disregard of its obligations and duties under this
Agreement. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of the Trustee. Any payment hereunder
made by the Master Servicer to the Trustee shall be from the Master Servicer's
own funds, without reimbursement from any REMIC therefor.

         Section 8.6 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR.

         The Trustee and the Securities Administrator shall at all times be a
corporation or an association (other than the Depositor, the Seller, the Master
Servicer or any Affiliate of the foregoing) organized and doing business under
the laws of any state or the United States of America, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 (or a member of a bank holding company whose capital and
surplus is at least $50,000,000) and subject to supervision or examination by
federal or state authority. If such corporation or association publishes reports
of conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 8.7.

         Section 8.7 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.

         The Trustee and the Securities Administrator may at any time resign
(including, in the case of the Securities Administrator, in connection with the
resignation or termination of the Master Servicer) and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, to the
Master Servicer, to the Securities Administrator (or the Trustee, if the
Securities Administrator resigns) and to the Certificateholders. Upon receiving
such notice of resignation, the Depositor shall promptly appoint a successor
trustee or successor securities administrator by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee or
Securities Administrator, as applicable, and to the successor trustee or
successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee, the Securities
Administrator and the Master Servicer by the Depositor. If no successor trustee
or successor securities administrator shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee, successor securities
administrator, Trustee or Securities Administrator, as applicable.

         If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 8.6 and shall fail
to resign after written request



                                     -130-
<PAGE>

therefor by the Depositor, or if at any time the Trustee or the Securities
Administrator shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or the Securities Administrator or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or the Securities Administrator or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee or the Securities Administrator, as applicable
and appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in duplicate, which instrument shall be
delivered to the Trustee or the Securities Administrator so removed and to the
successor trustee or successor securities administrator.

         The Holders of Certificates evidencing, in aggregate, not less than 51%
of the Certificate Principal Balance of the Certificates may at any time remove
the Trustee or the Securities Administrator and appoint a successor trustee or
successor securities administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Depositor, one
complete set to the Trustee or the Securities Administrator so removed and one
complete set to the successor so appointed. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee (in the case of the removal of
the Securities Administrator), the Securities Administrator (in the case of the
removal of the Trustee) and the Master Servicer by the Depositor. All costs and
expenses incurred by the Trustee in connection with its removal without cause
hereunder shall be reimbursed to it by the Trust Fund.

         Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 8.8.

         Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.

         Section 8.8 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.

         Any successor trustee or successor securities administrator appointed
as provided in Section 8.7 shall execute, acknowledge and deliver to the
Depositor and its predecessor trustee or predecessor securities administrator an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee or predecessor securities administrator
shall become effective and such successor trustee or successor securities
administrator without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee or securities
administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Loan Documents and related documents and statements to the
extent held by it hereunder, as well as all moneys, held by it hereunder, and
the Depositor and the predecessor trustee or predecessor securities
administrator shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee or successor securities administrator all
such rights, powers, duties and obligations.



                                     -131-
<PAGE>

         No successor trustee or successor securities administrator shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee or successor securities administrator shall be eligible
under the provisions of Section 8.6 and the appointment of such successor
trustee or successor securities administrator shall not result in a downgrading
of any Class of Certificates by any Rating Agency, as evidenced by a letter from
each Rating Agency.

         Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section, the Depositor shall mail
notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.

         Section 8.9 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.

         Any corporation or association into which the Trustee or the Securities
Administrator may be merged or converted or with which it may be consolidated or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall be a
party, or any corporation or association succeeding to the business of the
Trustee or the Securities Administrator shall be the successor of the Trustee or
the Securities Administrator hereunder, provided such corporation or association
shall be eligible under the provisions of Section 8.6, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

         Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of REMIC I or REMIC II or property securing the same may at the time be located,
the Trustee shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I or REMIC II, and to vest in such Person or
Persons, in such capacity, and for the benefit of the Holders of the
Certificates, such title to REMIC I or REMIC II, or any part thereof, and,
subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 8.6 hereunder and
no notice to Holders of Certificates of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 8.8 hereof.

         In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and



                                     -132-
<PAGE>

obligations (including the holding of title to REMIC I, REMIC II or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee, or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee or co-trustee.

         Section 8.11 APPOINTMENT OF OFFICE OR AGENCY.

         The Securities Administrator shall appoint an office or agency in the
City of Minneapolis located at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, where the Certificates may be surrendered for registration of
transfer or exchange, and presented for final distribution and where notices and
demands to or upon the Securities Administrator in respect of the Certificates
and this Agreement may be served.

         Section 8.12 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.

         The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator and the Depositor as applicable, as of the Closing
Date, that:

                  (i) It is a banking corporation duly organized, validly
         existing and in good standing under the laws of the State of New York.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its articles of incorporation or bylaws or constitute
         a default (or an event which, with notice or lapse of time, or both,
         would constitute a default) under, or result in the breach of, any
         material agreement or other instrument to which it is a party or which
         is applicable to it or any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.



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                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of it to perform
         its obligations under this Agreement or its financial condition.

                  (vi) No litigation is pending or, to the best of its
         knowledge, threatened against it, which would prohibit it from entering
         into this Agreement or, in its good faith reasonable judgment, is
         likely to materially and adversely affect either the ability of it to
         perform its obligations under this Agreement or its financial
         condition.



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                                   ARTICLE IX
                                   TERMINATION

         Section 9.1 TERMINATION UPON PURCHASE OR LIQUIDATION OF LOANS.

                  (a) Subject to Section 9.2, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator and the Trustee (other than the obligations of the
Master Servicer to the Securities Administrator pursuant to Section 8.5 and of
the Master Servicer to pay Compensating Interest to the Securities Administrator
and the Securities Administrator to make payments in respect of REMIC Regular
Interests or the Classes of Certificates as hereinafter set forth) shall
terminate upon payment to the Certificateholders and the deposit of all amounts
held by or on behalf of the Trustee and required hereunder to be so paid or
deposited on the Distribution Date coinciding with or following the earlier to
occur of (i) a Group I Cleanup Call (as defined below) and a Group II Cleanup
Call (as defined below) and (ii) the final payment or other liquidation (or any
advance with respect thereto) of the last Loan or REO Property remaining in
REMIC I and REMIC II; PROVIDED, HOWEVER, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James, living on the date hereof.

                  (b) The Master Servicer shall have the right (the party
exercising such right, the "Group I Terminator") to purchase all of the Group I
Loans and each Group I REO Property remaining in REMIC I no later than the
Determination Date in the month immediately preceding the Distribution Date on
which the Group I Certificates will be retired (a "Group I Cleanup Call");
PROVIDED, HOWEVER, that the Group I Terminator may elect to institute a Group I
Cleanup Call only if (a) the aggregate Scheduled Principal Balance of the Group
I Loans and each Group I REO Property remaining in the Trust Fund at the time of
such election is less than 10% of the aggregate Scheduled Principal Balance of
the Group I Loans as of the Cut-Off Date and (b) in the event such Group I
Cleanup Call would cause a draw on the Policy, Ambac provides written consent to
such Group I Cleanup Call to the Group I Terminator, the Trustee and the
Securities Administrator.

                  (c) The Master Servicer shall have the right (the party
exercising such right, the "Group II Terminator" and each of the Group I
Terminator and Group II Terminator, a "Terminator"), to purchase all of the
Group II Loans and each Group II REO Property remaining in REMIC II no later
than the Determination Date in the month immediately preceding the Distribution
Date on which the Group II Certificates will be retired (a "Group II Cleanup
Call"; either of the Group I Cleanup Call or a Group II Cleanup Call, a "Cleanup
Call"); PROVIDED, however, that the Group II Terminator may elect to institute a
Group II Cleanup Call only if the aggregate Scheduled Principal Balance of the
Group II Loans and each Group II REO Property remaining in the Trust Fund at the
time of such election is less than 10% of the aggregate Scheduled Principal
Balance of the Group II Loans as of the Cut-Off Date.

                  (d) A Group I Cleanup Call or Group II Cleanup Call shall be
at a price (each, a "Termination Price") equal to (i) with respect to a Group I
Cleanup Call, the aggregate Purchase Price of all the Group I Loans and Group I
REO Properties included in REMIC I plus any amounts due to Ambac in respect of
unpaid premiums and unpaid Reimbursement Amounts



                                     -135-
<PAGE>

and (ii) with respect to a Group II Cleanup Call, the aggregate Purchase Price
of all the Group II Loans and Group II REO Properties included in REMIC II. In
the event of any such Cleanup Call, the related Terminator shall deliver to the
Securities Administrator for deposit in the related Distribution Account not
later than the last Business Day of the month next preceding the month of the
final distribution on the Certificates an amount in immediately available funds
equal to the above-described Termination Price. The Securities Administrator
shall remit (a) to the Master Servicer from such funds deposited in the related
Distribution Account (i) any amounts which the Master Servicer notifies it in
writing that the Master Servicer would be permitted to withdraw and retain from
the related Distribution Account pursuant to Section 3.24 and (ii) any other
amounts otherwise payable by the Securities Administrator to the Master Servicer
from amounts on deposit in the related Distribution Account pursuant to the
terms of this Agreement and notified by the Master Servicer in writing and (b)
to the related Servicer, any amounts reimbursable to such Servicer pursuant to
the related Servicing Agreement, in each case prior to making any final
distributions pursuant to Section 9.1(f) below. Upon certification to the
Trustee and the Securities Administrator by a Servicing Officer of the making of
such final deposit, the Trustee shall promptly release to the related Terminator
the Mortgage Files for the remaining Group I Loans or Group II Loans, as
applicable, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate such transfer in each case without
recourse, representation or warranty.

                  (e) Notice of the redemption of Certificates shall be given
promptly by the Securities Administrator by letter to the Certificateholders
mailed (a) in the event such notice is given in connection with a Cleanup Call,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of the final distribution on the related Certificates or (b)
otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate or the related Certificates will
be redeemed, as applicable, and the final payment in respect of the related
REMIC Regular Interests or the related Certificates will be made upon
presentation and surrender of the related Certificates at the office of the
Securities Administrator therein designated, (ii) the amount of any such final
payment, (iii) that no interest shall accrue in respect of the related REMIC
Regular Interests or the related Certificates from and after the Interest
Accrual Period relating to the final Distribution Date therefor and (iv) that
the Record Date otherwise applicable to such Distribution Date is not applicable
with respect to the related Certificates, payments being made only upon
presentation and surrender of such Certificates at the office of the Securities
Administrator.

                  (f) Upon presentation of the Certificates by the
Certificateholders on the related final Distribution Date pursuant to paragraph
(e) above, the Securities Administrator shall distribute to each
Certificateholder so presenting and surrendering its Certificates the amount
otherwise distributable on such Distribution Date in accordance with Section 4.1
or Section 4.3, as applicable, in respect of the Certificates so presented and
surrendered. Any funds not distributed to any Holder or Holders of Certificates
being retired on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering
Holder or Holders. If any Certificates as to which notice has been given
pursuant to this Section 9.1 shall not have been surrendered for cancellation
within six months after the time specified in such notice, the Securities
Administrator shall mail a second notice to the remaining non-tendering


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<PAGE>


Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Securities Administrator shall, directly or through an agent,
mail a final notice to the remaining non-tendering Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining the funds
in trust and of contacting such Certificateholders shall be paid out of the
assets (related to the Group I Loans in the case of a Group I Cleanup Call and
the Group II Loans in the case of a Group II Cleanup Call) remaining in the
trust funds. If within one year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Securities Administrator
shall pay to the Depositor all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Securities Administrator as a result of such Certificateholder's failure
to surrender its Certificate(s) for final payment thereof in accordance with
this Section 9.1. Any such amounts held in trust by the Securities Administrator
shall be held in an Eligible Account and the Securities Administrator may direct
any depository institution maintaining such account to invest the funds in one
or more Eligible Investments. All income and gain realized from the investment
of funds deposited in such accounts held in trust by the Securities
Administrator shall be for the benefit of the Securities Administrator;
PROVIDED, HOWEVER, that the Securities Administrator shall deposit in such
account the amount of any loss of principal incurred in respect of any such
Eligible Investment made with funds in such accounts immediately upon the
realization of such loss.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the related REMIC shall terminate.

         Section 9.2 ADDITIONAL TERMINATION REQUIREMENTS.

                  (a) In the event of (x) a Group I Cleanup Call or Group II
Cleanup Call or (y) the final payment on or other liquidation of the last Loan
or REO Property remaining in REMIC I or REMIC II pursuant to Section 9.1, in
each case, the related REMIC shall be terminated in accordance with the
following additional requirements:

                  (i) The Securities Administrator shall specify the first day
         in the 90-day liquidation period in a statement attached to each
         REMIC's final Tax Return pursuant to Treasury regulation Section
         1.860F-1 and shall satisfy all requirements of a qualified liquidation
         under Section 860F of the Code and any regulations thereunder, as
         evidenced by an Opinion of Counsel obtained by and at the expense of
         the Terminator;

                  (ii) During such 90-day liquidation period and, at or prior to
         the time of making of the final payment on the Certificates, the
         Securities Administrator (on behalf of the Trustee) shall sell all of
         the assets of REMIC I or REMIC II, as applicable, to the Terminator for
         cash;

                  (iii) At the time of the making of the final payment on the
         Certificates, the Securities Administrator shall distribute or credit,
         or cause to be distributed or credited, to the Holders of the Residual
         Certificates all cash on hand in the Trust Fund (other than cash
         retained to meet claims), and the Trust Fund shall terminate at that
         time;



                                     -137-
<PAGE>

                  (iv) If the Trust Fund is being terminated as a result of the
         occurrence of the event described in clause (x) of the first paragraph
         of this Section 9.2, the Final Terminator (as described below), at its
         own expense, shall prepare or cause to be prepared the documentation
         required in connection with the adoption of a plan of liquidation of
         each REMIC pursuant to this Section 9.2. The Final Terminator pursuant
         to this 9.2(a)(iv) shall be the (A) Group I Terminator if the Group I
         Cleanup Call occurs later than the Group II Cleanup Call or (B) the
         Group II Terminator if the Group II Cleanup Call occurs later than the
         Group I Cleanup Call; and

                  (v) If the Trust Fund is being terminated as a result of the
         occurrence of the event described in clause (y) of the first paragraph
         of Section 9.2, at the expense of the Trust Fund, the Securities
         Administrator shall prepare or cause to be prepared the documentation
         required in connection with the adoption of a plan of liquidation of
         each related REMIC pursuant to this Section 9.2.

                  (b) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Securities Administrator to specify the 90-day
liquidation period for each REMIC, which authorization shall be binding upon all
successor Certificateholders.



                                     -138-
<PAGE>

                                   ARTICLE X
                                REMIC PROVISIONS

         Section 10.1 REMIC ADMINISTRATION.

                  (a) The Trustee shall elect to treat each REMIC under the Code
and, if necessary, under applicable state law and as instructed by the
Securities Administrator. Each such election shall be made by the Securities
Administrator on Form 1066 or other appropriate federal tax or information
return or any appropriate state return for the taxable year ending on the last
day of the calendar year in which the Certificates are issued. For the purposes
of the REMIC election in respect of REMIC I, the REMIC I Regular Interests shall
be designated as the Regular Interests in REMIC I and Component R-1 shall be
designated as the Residual Interest in REMIC I. The REMIC II Regular Interests
shall be designated as the Regular Interests in REMIC II and Component R-2 shall
be designated as the Residual Interest in REMIC II. The Certificates (other than
the Class R Certificates) shall be designated as the Regular Interests in REMIC
III and Component R-3 shall be designated as the Residual Interest in REMIC III.
The Trustee shall not permit the creation of any "interests" in each Trust REMIC
(within the meaning of Section 860G of the Code) other than the REMIC I Regular
Interests, REMIC II Regular Interests and the interests represented by the
Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

                  (c) The Securities Administrator shall be reimbursed for any
and all expenses relating to any tax audit of the Trust Fund (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to each REMIC that involve the Internal Revenue Service or state
tax authorities), including the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Securities Administrator, as agent for
each REMIC's tax matters person shall (i) act on behalf of the Trust Fund in
relation to any tax matter or controversy involving any REMIC and (ii) represent
the Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The holder of the largest Percentage Interest of each class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.

                  (d) The Securities Administrator shall prepare and file and
the Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.

                  (e) The Securities Administrator shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code,



                                     -139-
<PAGE>

the REMIC Provisions or other such compliance guidance, the Securities
Administrator shall provide (i) to any Transferor of a Residual Certificate such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any Person who is not a Permitted
Transferee upon receipt of additional reasonable compensation, (ii) to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption as
required) and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who shall serve as the representative of each
REMIC. The Depositor shall provide or cause to be provided to the Securities
Administrator, within ten (10) days after the Closing Date, all information or
data that the Securities Administrator reasonably determines to be relevant for
tax purposes as to the valuations and issue prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flow of the Certificates.

                  (f) To the extent in the control of the Trustee or the
Securities Administrator, each such Person (i) shall take such action and shall
cause each REMIC created hereunder to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions,
(ii) shall not take any action, cause the Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (A) endanger the status of each
Trust REMIC as a REMIC or (B) result in the imposition of a tax upon the Trust
Fund (including but not limited to the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless such action or inaction is permitted under this Agreement or the
Trustee and the Securities Administrator have received an Opinion of Counsel,
addressed to them (at the expense of the party seeking to take such action but
in no event at the expense of the Trustee or the Securities Administrator) to
the effect that the contemplated action will not, with respect to any REMIC,
endanger such status or result in the imposition of such a tax, nor (iii) shall
the Securities Administrator take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action; provided that the Securities
Administrator may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. In addition, prior to taking any action with respect to any REMIC or
the respective assets of each, or causing any REMIC to take any action, which is
not contemplated under the terms of this Agreement, the Securities Administrator
shall consult with the Trustee or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any REMIC, and the Securities Administrator shall not take any such action or
cause any REMIC to take any such action as to which the Trustee has advised it
in writing that an Adverse REMIC Event could occur. The Trustee may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of



                                     -140-
<PAGE>

the Code, or any other tax is imposed by the Code or any applicable provisions
of state or local tax laws, such tax shall be charged (i) to the Trustee
pursuant to Section 10.3 hereof, if such tax arises out of or results from a
breach by the Trustee of any of its obligations under this Article X, (ii) to
the Securities Administrator pursuant to Section 10.3 hereof, if such tax arises
out of or results from a breach by the Securities Administrator of any of its
obligations under this Article X, (iii) to the Master Servicer pursuant to
Section 10.3 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or under this
Article X, or (iv) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.

                  (h) The Trustee and the Securities Administrator shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC on a calendar year and on an accrual basis.

                  (i) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any REMIC other than in connection with any
Substitute Loan delivered in accordance with Section 2.3 unless it shall have
received an Opinion of Counsel addressed to it to the effect that the inclusion
of such assets in the Trust Fund will not cause the related REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
such REMIC to any tax under the REMIC Provisions or other applicable provisions
of federal, state and local law or ordinances.

                  (j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.

                  (k) The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.

         Section 10.2 PROHIBITED TRANSACTIONS AND ACTIVITIES.

         None of the Depositor, the Securities Administrator, the Master
Servicer or the Trustee shall sell, dispose of or substitute for any of the
Loans (except in connection with (i) the foreclosure of a Loan, including but
not limited to, the acquisition or sale of a Mortgaged Property acquired by deed
in lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Loans pursuant to Article
II of this Agreement), nor acquire any assets for any REMIC (other than REO
Property acquired in respect of a defaulted Loan), nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to any REMIC after the Closing Date (other than a Substitute Loan delivered in
accordance with Section 2.3), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such



                                     -141-
<PAGE>

sale, disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any REMIC as a REMIC or (b) cause any REMIC to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.

         Section 10.3 INDEMNIFICATION.

                  (a) The Trustee agrees to be liable for any taxes and costs
incurred by the Trust Fund, the Depositor, the Securities Administrator or the
Master Servicer including, without limitation, any reasonable attorneys fees
imposed on or incurred by the Trust Fund, the Depositor, the Securities
Administrator or the Master Servicer as a result of the Trustee's failure to
perform its covenants set forth in this Article X in accordance with the
standard of care of the Trustee set forth in this Agreement.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of the Master Servicer's failure
to perform its covenants set forth in Article III in accordance with the
standard of care of the Master Servicer set forth in this Agreement.

                  (c) The Securities Administrator agrees to be liable for any
taxes and costs incurred by the Trust Fund, the Depositor or the Trustee
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article X in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.



                                     -142-
<PAGE>

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

         Section 11.1 AMENDMENT. This Agreement may be amended from time to
time, by the Depositor, the Master Servicer, the Securities Administrator and
the Trustee, without the consent of any of the Certificateholders, (a) to cure
any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Agreement, (b) to
modify, eliminate or add to any provisions to such extent as shall be necessary
to maintain the qualification of the Trust Fund as four REMICs at all times that
any Class A, Class M , Class CE or Class P Certificates are outstanding,
provided, that such action shall not, as evidenced by an Opinion of Counsel
addressed to the Trustee and delivered to the Trustee, adversely affect in any
material respect the interests of any Certificateholder. No amendment shall be
deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no Opinion of Counsel
shall be required to address the effect of any such amendment on any such
consenting Certificateholder.

         This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates evidencing, in aggregate, not less than
66-2/3% of the Certificate Principal Balance of the Certificates for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; PROVIDED, HOWEVER, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Loans which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner,
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66-2/3% of the aggregate
Certificate Principal Balance of such Class, or (iii) modify the consents
required by the immediately preceding clauses (i) and (ii) without the consent
of the Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.1, Certificates registered in the name of
the Depositor or the Servicer or any Affiliate thereof shall be entitled to
Voting Rights with respect to matters affecting such Certificates. Without
limiting the generality of the foregoing, any amendment to this Agreement
required in connection with the compliance with or the clarification of any
reporting obligations described in Section 4.6 hereof shall not require the
consent of any Certificateholder and without the need for any Opinion of Counsel
or Rating Agency confirmation.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to it to the effect that such amendment
will not cause either REMIC I, REMIC II, REMIC III or REMIC IV of the Trust Fund
to fail to qualify as a REMIC at any time that REMIC I Regular Interests, REMIC
II Regular Interests, REMIC III Regular Interests or Certificates are
outstanding.



                                     -143-
<PAGE>

         As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and Rating Agency.

         It shall not be necessary for the consent of the Certificateholders
under this Section 11.1 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.

         Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel addressed to it
stating that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.

         Section 11.2 RECORDATION OF AGREEMENT; COUNTERPARTS. To the extent
permitted by applicable law, this Agreement (or an abstract hereof, if
acceptable by the applicable recording office) is subject to recordation in all
appropriate public offices for real property records in all the counties or
other comparable jurisdictions in which any or all of the properties subject to
the Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Depositor at the expense of
the Certificateholders, but only after the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

         Section 11.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.

         Except as otherwise expressly provided herein no Certificateholder,
solely by virtue of its status as Certificateholder, shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.

         No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
holder previously shall have given to the Trustee a written notice of default
and of the




                                     -144-
<PAGE>

continuance thereof, as hereinbefore provided, and unless all of the Holders of
Certificates evidencing, in aggregate, not less than 25% of the Trust Fund shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more holders of Certificates shall have any right in any manner whatever
by virtue or by availing of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.

         Section 11.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES OTHER THAN 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

         Section 11.5 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to 60 Wall Street, New York, New York 10005,
Attention: Deutsche Mortgage Securities, Inc., Mortgage Loan Trust, Series
2004-3, telecopy number: (212) 250-2500, or such other address or telecopy
number as may hereafter be furnished to the Master Servicer and the Trustee in
writing by the Depositor, (b) in the case of the Master Servicer and the
Securities Administrator, P.O. Box 98, Columbia, Maryland 21046 and for
overnight delivery to 9062 Old Annapolis Road, Columbia, Maryland 21045,
Attention: Deutsche Mortgage Securities, Inc., 2004-3 (telecopy number: (410)
715-2380), or such other address or telecopy number as may hereafter be
furnished to the Trustee and the Depositor in writing by the Master Servicer or
the Securities Administrator, (c) in the case of the Trustee, at the Corporate
Trust Office or such other address or telecopy number as the Trustee may
hereafter be furnish to the Master Servicer and the Depositor in writing by the
Trustee and (d) in the case of Ambac, Ambac Assurance Corporation, One State
Street Plaza, New York, New York 10004, Attention: Consumer Asset-Backed
Securities Group or such other address as may be hereafter furnished to the
Depositor, the Trustee and the Master Servicer in writing by Ambac. Any notice
required or permitted to be given to a Certificateholder shall be given by first
class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder also shall be mailed to the appropriate
party in the manner set forth above.



                                     -145-
<PAGE>

         Section 11.6 SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 11.7 NOTICE TO RATING AGENCIES.

         The Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies with respect to each of the following of which it has actual
knowledge:

                  1.       Any material change or amendment to this Agreement;

                  2.       The occurrence of any Master Servicer Event of
                           Default that has not been cured or waived;

                  3.       The resignation or termination of the Master Servicer
                           or the Trustee;

                  4.       The repurchase or substitution of Loans pursuant to
                           or as contemplated by Section 2.3;

                  5.       The final payment to the Holders of any Class of
                           Certificates;

                  6.       Any change in the location of a Distribution Account;

                  7.       Any event that would result in the inability of the
                           Trustee to make advances regarding delinquent Loans
                           pursuant to Section 7.2; and

                  8.       Any Insurer Default that has not been cured.

                  The Master Servicer shall make available to each Rating Agency
copies of the following:

                  1.       Each annual statement as to compliance described in
                           Section 3.16; and

                  2.       Each annual independent public accountants' servicing
                           report described in Section 3.17.

                  Any such notice pursuant to this Section 11.7 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York 10041 and to Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007 or such other addresses as the Rating
Agencies may designate in writing to the parties hereto.



                                     -146-
<PAGE>

         Section 11.8 ARTICLE AND SECTION REFERENCES.

         All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

         Section 11.9 GRANT OF SECURITY INTEREST.

         It is the express intent of the parties hereto that the conveyance of
the Loans by the Depositor to the Trustee, on behalf of the Trust Fund and for
the benefit of the Certificateholders, be, and be construed as, a sale of the
Loans by the Depositor and not a pledge of the Loans to secure a debt or other
obligation of the Depositor. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Loans are held to be property of the
Depositor, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Loans by the Depositor to the Trustee, on
behalf of the Trust Fund and for the benefit of the Certificateholders, to
secure a debt or other obligation of the Depositor and (b)(1) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles 8
and 9 of the Uniform Commercial Code as in effect from time to time in the State
of New York; (2) the conveyance provided for in Section 2.1 hereof shall be
deemed to be a grant by the Depositor to the Trustee, on behalf of the Trust
Fund and for the benefit of the Certificateholders, of a security interest in
all of the Depositor's right, title and interest in and to the Loans and all
amounts payable to the holders of the Loans in accordance with the terms thereof
and all proceeds of the conversion, voluntary or involuntary, of the foregoing
into cash, instruments, securities or other property, including without
limitation all amounts, other than investment earnings, from time to time held
or invested in the Distribution Accounts, whether in the form of cash,
instruments, securities or other property; (3) the obligations secured by such
security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Loans and the
Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the Trust
Fund and for the benefit of the Certificateholders, a security interest in the
Loans and all other property described in clause (2) of the preceding sentence,
for the purpose of securing to the Trustee the performance by the Depositor of
the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.1 to be a true, absolute and unconditional sale of the Loans and
assets constituting the Trust Fund by the Depositor to the Trustee, on behalf of
the Trust Fund and for the benefit of the Certificateholders.




                                     -147-
<PAGE>



                                  ARTICLE XII
                         CERTAIN MATTERS REGARDING AMBAC

         Section 12.1 RIGHTS OF AMBAC TO EXERCISE RIGHTS OF INSURED
CERTIFICATEHOLDERS.

         By accepting its Certificate, each Holder of an Insured Certificate
agrees that unless an Insurer Default exists, Ambac shall have the right to
exercise all consent, voting, direction and other control rights of the Holders
of Insured Certificates under this Agreement without any further consent of the
Holders of the Insured Certificates.

         Section 12.2 CLAIMS UPON THE POLICY; INSURANCE ACCOUNT.

                  (a) If, on the Business Day next succeeding the Determination
Date, the Securities Administrator determines that (i) the funds that will be on
deposit in the Distribution Account established for the benefit of the Group I
Certificateholders on the related Distribution Account Deposit Date, to the
extent distributable to the Holders of the Insured Certificates pursuant to
Section 4.1, are insufficient to pay the related Interest Distribution Amount
and related Group I Senior Principal Distribution Amount for such Distribution
Date, net of (a) any Prepayment Interest Shortfalls and Curtailment Shortfalls
allocated to the Insured Certificates and (b) any shortfalls relating to
application of the Relief Act or (ii) the funds available on the final
Distribution Date will be insufficient to reduce the Certificate Principal
Balance of the Insured Certificates to zero, the Securities Administrator shall
give notice by telephone or telecopy of the aggregate amount of such deficiency,
confirmed in writing in the form set forth as Exhibit A to the endorsement of
the Policy, to Ambac at or before 12:00 noon, New York City time, on the
Business Day prior to such Distribution Date. If, subsequent to such notice, and
prior to payment by Ambac pursuant to such notice, additional amounts are
deposited in the Certificate Account, the Securities Administrator shall
reasonably promptly notify Ambac and withdraw the notice or reduce the amount
claimed, as appropriate.

                  (b) The Securities Administrator shall establish a separate
special purpose trust account for the benefit of Holders of the Insured
Certificates and Ambac referred to herein as the "Insurance Account" over which
Securities Administrator shall have exclusive control and sole right of
withdrawal. The Securities Administrator shall deposit any amount paid to it
under the Policy in the Insurance Account and distribute such amount only for
purposes of payment to Holders of Insured Certificates of the Guaranteed
Distribution for which a claim was made. Such amount may not be applied to
satisfy any costs, expenses or liabilities of the Master Servicer, the
Securities Administrator, the Trustee or the Trust Fund. Amounts paid under the
Policy shall be transferred to the Distribution Account established for the
benefit of the Group I Certificateholders in accordance with the next succeeding
paragraph and disbursed by the Securities Administrator to Holders of Insured
Certificates in accordance with Section 4.1 or Section 9.1, as applicable. It
shall not be necessary for such payments to be made by checks or wire transfers
separate from the checks or wire transfers used to pay the Guaranteed
Distribution with other funds available to make such payment. However, the
amount of any payment of principal of or interest on the Insured Certificates to
be paid from funds transferred from the Insurance Account shall be noted as
provided in paragraph (c) below and in the statement to be furnished to Holders
of the Certificates pursuant to Section 4.6. Funds held in the Insurance Account
shall not be invested by the Securities Administrator.



                                     -148-
<PAGE>

         On any Distribution Date with respect to which a claim has been made
under the Policy, the amount of any funds received by the Securities
Administrator (on behalf of the Trustee) as a result of any claim under the
Policy, to the extent required to make the Guaranteed Distribution on such
Distribution Date, shall be withdrawn by the Securities Administrator from the
Insurance Account and deposited in the Distribution Account established for the
benefit of the Group I Certificateholders and applied by the Securities
Administrator, together with the other funds to be distributed to the Insured
Certificateholders pursuant to Section 4.1, directly to the payment in full of
the Guaranteed Distribution due on the Insured Certificates. Any funds remaining
in the Insurance Account on the first Business Day following a Distribution Date
shall be remitted by the Securities Administrator to Ambac, pursuant to the
written instructions of Ambac, by the end of such Business Day.

                  (c) The Securities Administrator shall keep a complete and
accurate record of the amount of interest and principal paid into the Insurance
Account in respect of any Insured Certificate from moneys received by the
Securities Administrator under the Policy. Ambac shall have the right to inspect
such records at reasonable times during normal business hours upon two Business
Day's prior written notice to the Securities Administrator.

         Section 12.3 EFFECT OF PAYMENTS BY THE INSURER; SUBROGATION.

         Anything herein to the contrary notwithstanding, for purposes of this
Section 12.3, any payment with respect to principal of or interest on the
Insured Certificates which is made with monies received pursuant to the terms of
the Policy shall not be considered payment of the Insured Certificates from the
Trust Fund. The Master Servicer, the Securities Administrator and the Trustee
acknowledge, and each Holder by its acceptance of an Insured Certificate agrees,
that without the need for any further action on the part of Ambac, the Master
Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar, to the extent Ambac makes payments, directly or indirectly, on
account of principal of or interest on the Insured Certificates to the Holders
of such Certificates, Ambac will be fully subrogated to, and each Holder of an
Insured Certificate and the Securities Administrator hereby delegate and assign
to Ambac, to the fullest extent permitted by law, the rights of such Holders to
receive such principal and interest from the Trust Fund; provided that Ambac
shall be paid such amounts only from the sources and in the manner explicitly
provided for herein.

         The Trustee, the Securities Administrator and the Master Servicer shall
cooperate in all respects with any reasonable request by Ambac for action to
preserve or enforce Ambac's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.

         Section 12.4 NOTICES AND INFORMATION TO AMBAC.

                  (a) All notices, statements, reports, certificates or opinions
required by this Agreement to be sent or made available to any other party
hereto or to the Certificateholders shall also be sent or made available to
Ambac.

                  (b) The Master Servicer shall designate a Person who shall be
available to Ambac to provide reasonable access to information regarding the
Group I Loans.



                                     -149-
<PAGE>

         Section 12.5 TRUSTEE TO HOLD POLICY.

         The Trustee will hold the Policy in trust as agent for the Insured
Certificateholders for the purpose of making claims thereon and distributing the
proceeds thereof. Neither the Policy, nor the amounts paid on the Policy will
constitute part of the Trust Fund or assets of any REMIC created by this
Agreement. Each Holder of an Insured Certificate, by accepting its Certificate,
appoints the Trustee as attorney-in-fact for the purpose of making claims on the
Policy. The Trustee shall surrender the Policy to Ambac for cancellation upon
the expiration of the term of the Policy as provided in the Policy following the
retirement of the Insured Certificates. To the extent that the Policy
constitutes a reserve fund for federal income tax purposes, (1) it shall be an
outside credit support agreement and not an asset of any REMIC and (2) it shall
be owned by the Insurer, all within the meaning of Section 1.860G-2(h) of the
Treasury Regulations.

         Section 12.6 PAYMENT OF INSURANCE PREMIUM.

         Unless otherwise designated in writing by the President or a Managing
Director of Ambac to the Trustee and the Securities Administrator, the Insurer
Premium to be paid pursuant to Section 4.1(a)(i)(A) shall be paid by the
Securities Administrator to Ambac by wire transfer with the following details
specifically stated in the wire transfer:


         Bank: Citibank, N.A.
         ABA Number: 021000089
         For the account of: Ambac Assurance Corporation
         Account Number: 40609486
         Re: AB0753BE DMSI 2004-3
         Attention: Joe Sievers


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]






                                     -150-
<PAGE>





         IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year
first above written.



                                  DEUTSCHE MORTGAGE SECURITIES, INC.,
                                  as Depositor


                                  By    /s/ Michael A. Commaroto
                                    --------------------------------------
                                  Name: MICHAEL A. COMMAROTO
                                  Its:  PRESIDENT


                                  By    /s/ Ted Hsueh
                                    --------------------------------------
                                  Name: TED HSUEH
                                  Its:  Authorized Signatory





                                  WELLS FARGO BANK,
                                  N.A.,
                                  as Master Servicer and Securities
                                  Administrator


                                  By    /s/ Peter A. Gobell
                                    --------------------------------------
                                  Name: Peter A. Gobell
                                  Its:  Vice President





                                  HSBC BANK USA,  not in its  individual
                                  capacity but solely as Trustee


                                  By: /S/ RICHARD WU
                                     -------------------------------------
                                  Name:    Richard Wu
                                  Its:     Vice President





<PAGE>




With Respect to Sections 6.7, 6.8 and 6.9:

THE MURRAYHILL COMPANY


By:    s/s Kevin J. Kanouff
   -----------------------------------------
Name:  Kevin J. Kanouff
       PRESIDENT AND GENERAL COUNSEL





<PAGE>


STATE OF             )
                     ) ss.:
COUNTY OF            )

         On the ___ day of April 2004, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of Deutsche Mortgage Securities, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.


                                                  Notary Public


[Notarial Seal]


<PAGE>


STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of April 2004, before me, a notary public in
and for said State, personally appeared _____________________ known to me to be
a _____________________ of Deutsche Mortgage Securities, Inc ., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.


                                                                Notary Public


[Notarial Seal]


<PAGE>


STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the __ day of April 2004, before me, a notary public in and
for said State, personally appeared ___________________________ known to me to
be a ____________________ of Wells Fargo Bank, N.A., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.


                                                                Notary Public


[Notarial Seal]


<PAGE>


STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of April 2004, before me, a notary public in
and for said State, personally appeared _______________ known to me to be a
_______________ of HSBC Bank USA, one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.


                                                                Notary Public


[Notarial Seal]



<PAGE>
                                   EXHIBIT A-1

       FORM OF CLASS [I-A-[1][2][3][4][5][6][7]][II-AR-[1][2]] CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AS DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES
ADMINISTRATOR NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.



<PAGE>



<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No. [1]                                       Pass-Through Rate: [___ %][Variable]

Class [I-A-[1][2][3][4][5][6][7]][II-AR-[1][2]]
Senior                                                    Percentage Interest: _____

Date of Pooling and Servicing Agreement and               Aggregate Initial Certificate Principal Balance
Cut-Off Date:                                             of this Class as of the Cut-Off Date:
April 1, 2004                                             $

First Distribution Date:                                  Initial Certificate Principal Balance of this
May 25, 2004                                              Certificate as of the Cut-Off Date:
                                                          $-----------

Master Servicer:
Wells Fargo Bank, N.A.                                    CUSIP: ___________

Final Distribution Date:
[March][May] 2034
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [I-A-[1][2][3][4][5][6][7]][II-AR-[1][2]]
         Certificates with respect to a trust fund consisting primarily of a
         pool of conventional one- to four-family fixed and adjustable interest
         rate mortgage loans secured by one- to four- family residences, units
         in planned unit developments and individual condominium units (the
         "Trust Fund") sold by DEUTSCHE MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][II] Loans (as defined below) are guaranteed or
insured by any governmental entity or by Deutsche Mortgage Securities, Inc., the
Master Servicer, the Trustee or the Securities Administrator or any of their
affiliates or any other person. None of Deutsche Mortgage Securities, Inc., the
Master Servicer or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.

                  This certifies that [Cede & Co.] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in the [fixed][adjustable]
rate mortgage loans and related assets included in the Trust Fund (the "Group
[I] [II] Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group

                                      A-1-2

<PAGE>



[I][II] Loans were sold by DB Structured Products, Inc. to DMSI. Wells Fargo
Bank, N.A. will act as master servicer of the Group [I][II] Loans (the "Master
Servicer," which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-Off Date specified above (the
"Agreement"), among DMSI, as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as Master Servicer and securities administrator (the "Securities
Administrator") and HSBC Bank USA, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

                  [[GROUP I SENIOR CERTIFICATES, OTHER THAN THE CLASS I-A-1 AND
CLASS I-A-IO CERTIFICATES:]The Pass-Through Rate applicable to the calculation
of interest payable with respect to this Certificate on any Distribution Date
(as hereinafter defined) shall be a rate per annum equal to the lesser of (i)
[___]% [[CLASS I-A-5 AND I-A-6 CERTIFICATES:], provided, however, such rate
shall be increased to ____% on each Distribution Date following the Distribution
Date on which the aggregate principal balance of the Group I Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Group I Loans as of
the Cut-off Date] and (ii) the applicable Net WAC Pass-Through Rate for such
Distribution Date. The Securities Administrator will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
month immediately preceding the month of such Distribution Date, an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. Any such
distributions will be made by wire transfer in immediately available funds to
the account of such Person or by any other means of payment acceptable to such
Person. The last scheduled Distribution Date is the Distribution Date in March
2034.]

                  [[CLASS I-A-1 AND GROUP II SENIOR CERTIFICATES:] The
Pass-Through Rate applicable to the calculation of interest payable with respect
to this Certificate on any Distribution Date (as hereinafter defined) shall be a
rate per annum equal to the lesser of (i) One-Month LIBOR plus [_____]% [[GROUP
II SENIOR CERTIFICATES:], in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Group II Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate principal balance of the
Group II Loans as of the Cut-off Date, or One-Month LIBOR plus [_____]%, in the
case of any Distribution Date thereafter] and (ii) the applicable Net WAC
Pass-Through Rate for such Distribution Date. The Securities Administrator will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date, an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount (of interest and principal, if any) required to be distributed to the
Holders of Certificates of the same Class as this Certificate. Any

                                      A-1-3

<PAGE>



such distributions will be made by wire transfer in immediately available funds
to the account of such Person or by any other means of payment acceptable to
such Person. The last scheduled Distribution Date is the Distribution Date in
[March]][May] 2034.]

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon as described in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder, and
that none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.


                                      A-1-4

<PAGE>



                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
[Group I][Group II] Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any [Group
I][Group II] Loan or (ii) the optional repurchase by the party named in the
Agreement of all the [Group I][Group II] Loans and other related assets of the
Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Scheduled Principal Balance of the [Group I][Group II] Loans is less
than the percentage of the aggregate Scheduled Principal Balance specified in
the Agreement of the [Group I][Group II] Loans at the Cut-Off Date. The exercise
of such right will effect the early retirement of this Certificate. In no event
will the Trust Fund created by the Agreement continue beyond the expiration of
21 years after the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.


                                      A-1-5

<PAGE>



                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: April 30, 2004

                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                               Authorized Officer




                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class
[I-A-[1][2][3][4][5][6][7]][II-AR-[1][2]] Certificates referred to in the
within-mentioned Agreement.

                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:________________________________________
                                              Authorized Signatory





<PAGE>



                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass- Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
                           ____________________________________________________
                                    Signature by or on behalf of assignor


                                      _________________________________________
                                             Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.





<PAGE>



                                   EXHIBIT A-2

                        FORM OF CLASS I-A-IO CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.



<PAGE>


<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No. [1]                                       Pass-Through Rate: Variable

Class I-A-IO                                              Percentage Interest: _____

Date of Pooling and Servicing Agreement and               Aggregate Initial Notional Amount of this
Cut-Off Date:                                             Class as of the Cut-Off Date:
April 1, 2004                                             $___________

First Distribution Date:                                  Initial Notional Amount of this Certificate as
May 25, 2004                                              of the Cut-Off Date:
                                                          $-----------

Master Servicer:
Wells Fargo Bank, N.A.

Final Distribution Date:
April 25, 2006                                            CUSIP: ___________
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

         evidencing a fractional undivided interest in the distributions
         allocable to the Class I-A-IO Certificates with respect to a trust fund
         consisting primarily of a pool of conventional one- to four-family
         fixed and adjustable interest rate mortgage loans secured by one- to
         four- family residences, units in planned unit developments and
         individual condominium units (the "Trust Fund") sold by DEUTSCHE
         MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][II] Loans (as defined below) are guaranteed or
insured by any governmental entity or by Deutsche Mortgage Securities, Inc., the
Master Servicer, the Trustee or the Securities Administrator or any of their
affiliates or any other person. None of Deutsche Mortgage Securities, Inc., the
Master Servicer or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.

                  This certifies that [Cede & Co.] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in the [fixed][adjustable]
rate mortgage loans and related assets included in the Trust Fund (the "Group
[I] [II] Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group
[I][II] Loans were sold by DB Structured Products, Inc. to DMSI. Wells Fargo
Bank, N.A. will act

                                      A-2-2

<PAGE>



as master servicer of the Group [I][II] Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-Off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date (as
hereinafter defined) shall be a rate per annum equal to (i) 4.50% with respect
the first twelve Distribution Dates following the Closing Date, (ii) 3.50% with
respect to the next twelve Distribution Dates and (iii) 0.00% thereafter. The
Securities Administrator will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the calendar month preceding
the month of such Distribution Date, an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person. The last scheduled Distribution Date is
the Distribution Date in April 2006.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The Class I-A-IO Certificates
have no Certificate Principal Balance. The initial Notional Amount of this
Certificate is set forth above.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder, and
that none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.


                                      A-2-3

<PAGE>



                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
Group I Loan remaining in the Trust Fund and disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Group I Loan or
(ii) the optional repurchase by the party named in the Agreement of all the
Group I Loans and other related assets of the Trust Fund in accordance with the
terms of the Agreement. Such optional repurchase may be made only on or after
the Distribution Date on which the aggregate Scheduled Principal Balance of the
Group I Loans is less than the percentage of the aggregate Scheduled Principal
Balance specified in the Agreement of the Group I Loans at the Cut-Off Date. The
exercise of such right will effect the early retirement of this Certificate. In
no event will the

                                      A-2-4

<PAGE>



Trust Fund created by the Agreement continue beyond the expiration of 21 years
after the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.


                                      A-2-5

<PAGE>



                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: April 30, 2004

                                 WELLS FARGO BANK, N.A.
                                 as Securities Administrator


                                 By:_______________________________________
                                              Authorized Officer




                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class I-A-IO Certificates referred to in
the within-mentioned Agreement.


                                 WELLS FARGO BANK, N.A.
                                 as Securities Administrator


                                 By:_______________________________________
                                            Authorized Signatory





<PAGE>



                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass- Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
                           ____________________________________________________
                                    Signature by or on behalf of assignor


                                      _________________________________________
                                             Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.





<PAGE>



                                   EXHIBIT A-3

                FORM OF CLASS [I-M][II-MR]-[1][2][3] CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
[GROUP I][GROUP II] SENIOR CERTIFICATES [AND][,][ THE CLASS [I-M-1][II- MR-1]
CERTIFICATES, [AND] THE CLASS [I-M-2][II-MR-2] CERTIFICATES], AS DESCRIBED IN
THE AGREEMENT (AS DEFINED HEREIN).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND CERTAIN LOSSES ALLOCABLE HERETO
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING
THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF
THE SECURITIES ADMINISTRATOR NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

                  ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.3(d) OF THE AGREEMENT REFERRED TO HEREIN.





<PAGE>


<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No. [1]                                       Pass-Through Rate:   [___%][Variable]

Class [I-M][II-MR]-[1][2][3]                              Percentage Interest: _____

Date of Pooling and Servicing Agreement and               Aggregate Initial Certificate Principal Balance
Cut-Off Date:                                             of this Class as of the Cut-Off Date:
April 1, 2004                                             $___________

First Distribution Date:                                  Initial Certificate Principal Balance of this
May 25, 2004                                              Certificate as of the Cut-Off Date:
                                                          $-----------

Master Servicer:
Wells Fargo Bank, N.A.                                    CUSIP: ___________

Final Distribution Date:
[March][May] 2034
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [I-M][II-MR]-[1][2][3] Certificates with respect
         to a trust fund consisting primarily of a pool of conventional one- to
         four-family fixed and adjustable interest rate mortgage loans secured
         by one- to four- family residences, units in planned unit developments
         and individual condominium units (the "Trust Fund") sold by DEUTSCHE
         MORTGAGE SECURITIES, INC.

                  This Certificate is payable solely from certain assets of the
Trust Fund as described in the Agreement (as defined below), and does not
represent an obligation of or interest in Deutsche Mortgage Securities, Inc.,
the Master Servicer, the Trustee or the Securities Administrator referred to
below or any of their affiliates or any other person. Neither this Certificate
nor the underlying Group [I][II] Loans (as defined below) are guaranteed or
insured by any governmental entity or by Deutsche Mortgage Securities, Inc., the
Master Servicer, the Trustee or the Securities Administrator or any of their
affiliates or any other person. None of Deutsche Mortgage Securities, Inc., the
Master Servicer or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.

                  This certifies that [Cede & Co.] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in the [fixed][adjustable]
rate mortgage loans and related assets included in the Trust Fund (the "Group
[I] [II] Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group
[I][II] Loans were sold by DB Structured Products, Inc. to DMSI. Wells Fargo
Bank, N.A. will act as master servicer of the Group [I][II] Loans (the "Master
Servicer," which term includes any

                                      A-3-2

<PAGE>



successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-Off
Date specified above (the "Agreement"), among DMSI, as depositor (the
"Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.

                  [[GROUP I MEZZANINE CERTIFICATES:]The Pass-Through Rate
applicable to the calculation of interest payable with respect to this
Certificate on any Distribution Date (as hereinafter defined) shall be a rate
per annum equal to the lesser of (i) [___]%; provided, however, such rate shall
be increased to ____% on each Distribution Date (as hereinafter defined)
following the Distribution Date on which the aggregate principal balance of the
Group I Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate principal balance of the
Group I Loans as of the Cut-off Date and (ii) the applicable Net WAC Pass-
Through Rate for such Distribution Date. The Securities Administrator will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. Any such distributions will be made by wire transfer in immediately
available funds to the account of such Person or by any other means of payment
acceptable to such Person. The last scheduled Distribution Date is the
Distribution Date in March 2034.]

                  [[GROUP II MEZZANINE CERTIFICATES:] The Pass-Through Rate
applicable to the calculation of interest payable with respect to this
Certificate on any Distribution Date (as hereinafter defined) shall be a rate
per annum equal to the lesser of (i) One-Month LIBOR plus [_____]%, in the case
of each Distribution Date through and including the Distribution Date on which
the aggregate principal balance of the Group II Loans (and properties acquired
in respect thereof) remaining in the Trust Fund is reduced to less than 10% of
the aggregate principal balance of the Group II Loans as of the Cut-off Date, or
One-Month LIBOR plus [_____]%, in the case of any Distribution Date thereafter
and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.
The Securities Administrator will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person. The last scheduled Distribution Date is
the Distribution Date in May 2034.]


                                      A-3-3

<PAGE>



                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto as
described in the Agreement.

                  Any transferee of this Certificate shall be deemed to make the
representations set forth in section 5.3(d) of the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
representing a like aggregate Percentage Interest will be issued to the
designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject

                                      A-3-4

<PAGE>



to certain limitations therein set forth, this Certificate is exchangeable for
one or more new Certificates evidencing the same Class and in the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Trustee, the Securities Administrator and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
[Group I][Group II] Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any [Group
I][Group II] Loan or (ii) the optional repurchase by the party named in the
Agreement of all the [Group I][Group II] Loans and other related assets of the
Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Scheduled Principal Balance of the [Group I][Group II] Loans is less
than the percentage of the aggregate Scheduled Principal Balance specified in
the Agreement of the [Group I][Group II] Loans at the Cut-Off Date. The exercise
of such right will effect the early retirement of this Certificate. In no event
will the Trust Fund created by the Agreement continue beyond the expiration of
21 years after the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.


                                      A-3-5

<PAGE>



                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: April 30, 2004

                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                               Authorized Officer




                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [I-M][II-MR]-[1][2][3] Certificates
referred to in the within-mentioned Agreement.


                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                             Authorized Signatory


<PAGE>



                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass- Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
                           ____________________________________________________
                                    Signature by or on behalf of assignor


                                      _________________________________________
                                             Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.





<PAGE>



                                   EXHIBIT A-4

                      FORM OF CLASS [I][II]-CE CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
GROUP [I][II] SENIOR CERTIFICATES AND THE GROUP [I][II] MEZZANINE CERTIFICATES,
AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  DISTRIBUTIONS ON THIS CERTIFICATE MAY BE MADE MONTHLY AS SET
FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN AS
THE DENOMINATION OF THIS CERTIFICATE.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3(c) OF THE AGREEMENT.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(d)
OF THE AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(d) OF THE AGREEMENT
THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE DEPOSITOR, THE
MASTER SERVICER, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE
TRUST FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.





<PAGE>




<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No. [1]

Class [I][II]-CE                                          Percentage Interest: _____

Date of Pooling and Servicing Agreement and               Aggregate Initial Certificate Principal Balance
Cut-Off Date:                                             of this Class as of the Cut-Off Date:
April 1, 2004                                             $_________

First Distribution Date:                                  Initial Certificate Principal Balance of this
May 25, 2004                                              Certificate as of the Cut-Off Date:
                                                          $----------

Master Servicer:
Wells Fargo Bank, N.A.                                    CUSIP:

Final Distribution Date:
[March][May] 2034
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

                  evidencing a fractional undivided interest in the
                  distributions allocable to the Class [I][II]-CE Certificates
                  with respect to a trust fund consisting primarily of a pool of
                  conventional one- to four- family fixed and adjustable
                  interest rate mortgage loans secured by one- to four- family
                  residences, units in planned unit developments and individual
                  condominium units (the "Trust Fund") sold by DEUTSCHE MORTGAGE
                  SECURITIES, INC.

         This Certificate is payable solely from certain assets of the Trust
Fund as described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Group [I][II] Loans (as defined below) are guaranteed or insured by
any governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that [______________________] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in the [fixed][adjustable]
rate mortgage loans and related assets included in the Trust Fund (the "Group
[I] [II] Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group
[I][II] Loans were sold by DB Structured Products, Inc. to DMSI. Wells Fargo
Bank, N.A. will act as master

                                      A-4-2

<PAGE>



servicer of the Group [I][II] Loans (the "Master Servicer," which term includes
any successors thereto under the Agreement referred to below). The Trust Fund
was created pursuant to the Pooling and Servicing Agreement dated as of the
Cut-Off Date specified above (the "Agreement"), among DMSI, as depositor (the
"Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

         The Securities Administrator will distribute on the 25th day of each
month, or, if such 25th day is not a Business Day, the immediately following
Business Day (each, a "Distribution Date"), commencing on the First Distribution
Date specified above, to the Person in whose name this Certificate is registered
at the close of business on the last Business Day of the calendar month
preceding the month of such Distribution Date, an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. Any such distributions will be made by wire transfer in immediately
available funds to the account of such Person or by any other means of payment
acceptable to such Person. The last scheduled Distribution Date is the
Distribution Date in [March][May] 2034.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose and designated in such notice. The initial Certificate Principal Balance
of this Certificate is set forth above. The Certificate Principal Balance hereof
will be reduced to the extent of distributions allocable to principal hereon and
Realized Losses allocable hereto as described in the Agreement.

         No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) written certifications from the Holder of the Certificate
desiring to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit D and either
Exhibit E or Exhibit F, as applicable, or (ii) an Opinion of Counsel reasonably
satisfactory to the Trustee, the Depositor and the Securities Administrator that
such transfer may be made without such registration or qualification (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Securities Administrator, the Master Servicer or any
Servicer in their respective capacities as such), together with copies of the
written certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates

                                      A-4-3

<PAGE>



without registration or qualification. Any Holder desiring to effect a transfer
of this Certificate shall be required to indemnify the Trustee, the Securities
Administrator, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

         No transfer of this Class [I][II]-CE Certificate will be made unless
the Depositor, the Trustee and the Securities Administrator have received either
(i) an opinion of counsel under Section 5.3(d) of the Agreement stating, among
other things, that the transferee's acquisition of a Class[I][II]-CE Certificate
is permissible under applicable law, will not constitute or result in a
non-exempt prohibited transaction under Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the
Internal Revenue Code (the "Code") and will not subject the Depositor, the
Trustee, the Securities Administrator, the Master Servicer, any Servicer or the
Trust Fund to any obligation or liability in addition to those undertaken in the
Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating that the transferee is not an employee benefit or other plan
subject to the prohibited transaction provisions of ERISA or Section 4975 of the
Code (a "Plan"), or any other person (including an investment manager, a named
fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf of
or purchasing any Certificate with "plan assets" of any Plan.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that none
of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% of the aggregate Certificate
Principal Balance of the related Class or Classes of Certificates. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for

                                      A-4-4

<PAGE>



such purposes, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Securities Administrator duly executed by
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates in authorized denominations representing
a like aggregate Percentage Interest will be issued to the designated
transferee.

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

         No service charge will be made to the Certificateholders for any such
registration of transfer, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Trustee, the
Securities Administrator and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator or any such agent shall be affected by notice to the contrary.

         The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
[Group I][Group II] Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any [Group
I][Group II] Loan or (ii) the optional repurchase by the party named in the
Agreement of all the [Group I][Group II] Loans and other related assets of the
Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Scheduled Principal Balance of the [Group I][Group II] Loans is less
than the percentage of the aggregate Scheduled Principal Balance specified in
the Agreement of the [Group I][Group II] Loans at the Cut-Off Date. The exercise
of such right will effect the early retirement of this Certificate. In no event
will the Trust Fund created by the Agreement continue beyond the expiration of
21 years after the death of certain persons identified in the Agreement.

         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.


                                      A-4-5

<PAGE>



                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: April 30, 2004


                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                              Authorized Officer




                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class[I][II]-CE Certificates referred to in
the within-mentioned Agreement.

                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                             Authorized Signatory



<PAGE>



                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass- Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
                           ____________________________________________________
                                    Signature by or on behalf of assignor


                                      _________________________________________
                                             Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.



<PAGE>



                                   EXHIBIT A-5

                       FORM OF CLASS [I][II]-P CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE AGREEMENT.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(d)
OF THE AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(d) OF THE AGREEMENT
THAT THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE DEPOSITOR, THE
MASTER SERVICER, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE
TRUST FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.




<PAGE>



<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No. [1]

Class [I][II]-P                                           Percentage Interest: _____

Date of Pooling and Servicing Agreement and               Aggregate Initial Certificate Principal Balance
Cut-Off Date:                                             of this Class as of the Cut-Off Date:
April 1, 2004                                             $100.00

First Distribution Date:                                  Initial Certificate Principal Balance of this
May 25, 2004                                              Certificate as of the Cut-Off Date:
                                                          $100.00

Master Servicer:
Wells Fargo Bank, N.A.                                    CUSIP:

Final Distribution Date:
[March][May] 2034
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

                           evidencing a fractional undivided interest in the
                           distributions allocable to the Class [I][II]-P
                           Certificates with respect to a trust fund consisting
                           primarily of a pool of conventional one- to four-
                           family fixed and adjustable interest rate mortgage
                           loans secured by one- to four- family residences,
                           units in planned unit developments and individual
                           condominium units (the "Trust Fund") sold by DEUTSCHE
                           MORTGAGE SECURITIES, INC.

         This Certificate is payable solely from certain assets of the Trust
Fund as described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Group [I][II] Loans (as defined below) are guaranteed or insured by
any governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that [_______________________] is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in the [fixed][adjustable]
rate mortgage loans and related assets included in the Trust Fund (the "Group
[I] [II] Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Group
[I][II]

                                      A-5-2

<PAGE>



Loans were sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A.
will act as master servicer of the Group [I][II] Loans (the "Master Servicer,"
which term includes any successors thereto under the Agreement referred to
below). The Trust Fund was created pursuant to the Pooling and Servicing
Agreement dated as of the Cut-Off Date specified above (the "Agreement"), among
DMSI, as depositor (the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer
and securities administrator (the "Securities Administrator") and HSBC Bank USA
as trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, capitalized
terms used herein shall have the meaning ascribed to them in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of its acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs, in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to the
Holders of the Class [I][II]-P Certificates on such Distribution Date pursuant
to the Agreement. Any such distributions will be made by wire transfer in
immediately available funds to the account of such Person or by any other means
of payment acceptable to such Person.

                  Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) written certifications from the Holder of the Certificate
desiring to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit D and either
Exhibit E or Exhibit F, as applicable, or (ii) an Opinion of Counsel reasonably
satisfactory to the Trustee, the Depositor and the Securities Administrator that
such transfer may be made without such registration or qualification (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Securities Administrator, the Master Servicer or any
Servicer in their respective capacities as such), together with copies of the
written certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Securities Administrator, the
Depositor, the Seller and the

                                      A-5-3

<PAGE>



Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

                  No transfer of this Class [I][II]-P Certificate will be made
unless the Depositor, the Trustee and the Securities Administrator have received
either (i) an opinion of counsel under Section 5.3(d) of the Agreement stating,
among other things, that the transferee's acquisition of a Class [I][II]-P
Certificate is permissible under applicable law, will not constitute or result
in a non-exempt prohibited transaction under Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Internal Revenue Code (the "Code") and will not subject the Depositor, the
Trustee, the Securities Administrator, the Master Servicer, any Servicer or the
Trust Fund to any obligation or liability in addition to those undertaken in the
Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating that the transferee is not an employee benefit or other plan
subject to the prohibited transaction provisions of ERISA or Section 4975 of the
Code (a "Plan"), or any other person (including an investment manager, a named
fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf of
or purchasing any Certificate with "plan assets" of any Plan.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
none of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of Certificates affected thereby evidencing not less than 66-2/3% of the
aggregate Certificate Principal Balance of the related Class or Classes of
Certificates. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Securities Administrator upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the Securities
Administrator for such purposes, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator duly
executed by the Holder hereof or such Holder's

                                      A-5-4

<PAGE>



attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement with respect to this
Certificate, coinciding with or following the earlier to occur of (i) the
maturity or other liquidation (or Advance with respect thereto) of the last
[Group I][Group II] Loan remaining in the Trust Fund and disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any [Group
I][Group II] Loan or (ii) the optional repurchase by the party named in the
Agreement of all the [Group I][Group II] Loans and other related assets of the
Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate Scheduled Principal Balance of the [Group I][Group II] Loans is less
than the percentage of the aggregate Scheduled Principal Balance specified in
the Agreement of the [Group I][Group II] Loans at the Cut-Off Date. The exercise
of such right will effect the early retirement of this Certificate. In no event,
however, will the Trust Fund created by the Agreement continue beyond the
expiration of 21 years after the death of certain persons identified in the
Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Securities Administrator by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.



                                      A-5-5

<PAGE>



                  IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.

Dated: April 30, 2004


                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                               Authorized Officer



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [I][II]-P Certificates referred to in
the within-mentioned Agreement.


                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                              Authorized Signatory



<PAGE>



                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass- Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
                           ____________________________________________________
                                    Signature by or on behalf of assignor


                                      _________________________________________
                                             Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.





<PAGE>



                                   EXHIBIT A-6

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3(c) AND 5.3(e) OF THE
AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(d) OF THE
AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(d) OF THE AGREEMENT THAT
THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE,
THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE TRUST FUND TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE SECURITIES
ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF
THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511
OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF
A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE



<PAGE>



OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO,
THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS
CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.3(d) OF THE
AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.3(c) AND 5.3(e) OF THE AGREEMENT.




                                      A-6-2

<PAGE>





Certificate No. [1]

Class R                                              Percentage Interest: 100%

Date of Pooling and Servicing Agreement and
Cut-Off Date:
April 1, 2004

First Distribution Date:
May 25, 2004

Master Servicer:
Wells Fargo Bank, N.A.                               CUSIP:

Final Distribution Date:
[May] 2034


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

                  evidencing a fractional undivided interest in the
                  distributions allocable to the Class R Certificates with
                  respect to a trust fund consisting primarily of a pool of
                  conventional one- to four-family fixed and adjustable interest
                  rate mortgage loans secured by one- to four- family
                  residences, units in planned unit developments and individual
                  condominium units (the "Trust Fund") sold by DEUTSCHE MORTGAGE
                  SECURITIES, INC.

         This Certificate is payable solely from the assets of the Trust Fund as
described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans (as defined below) are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that [_____________________] is the registered owner of
the Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in the fixed and adjustable
rate mortgage loans and related assets included in the Trust Fund (the "Mortgage
Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Mortgage Loans
were sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will
act as master

                                      A-6-3

<PAGE>



servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-Off
Date specified above (the "Agreement"), among DMSI, as depositor (the
"Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.

         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Securities Administrator of, among other things, an affidavit to the effect
that it is a United States Person and Permitted Transferee, (iii) any attempted
or purported transfer of any Ownership Interest in this Certificate in violation
of such restrictions will be absolutely null and void and will vest no rights in
the purported transferee, and (iv) if any person other than a United States
Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions, then the Depositor will have the
right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Depositor,
which purchaser may be the Depositor, or any affiliate of the Depositor, on such
terms and conditions as the Depositor may choose.

         The Securities Administrator will distribute on the 25th day of each
month, or, if such 25th day is not a Business Day, the immediately following
Business Day (each, a "Distribution Date"), commencing on the First Distribution
Date specified above, to the Person in whose name this Certificate is registered
at the close of business on the last Business Day of the calendar month
immediately preceding the month in which such Distribution Date occurs, an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amounts required to be distributed to the Holders of
Certificates of the same Class as this Certificate. Any such distributions will
be made by wire transfer in immediately available funds to the account of such
Person or by any other means of payment acceptable to such Person. The last
scheduled Distribution Date is the Distribution Date in May 2034.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose and designated in such notice.

         No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) written certifications from the Holder of the Certificate
desiring to effect the

                                      A-6-4

<PAGE>



transfer, and from such Holder's prospective transferee, substantially in the
forms attached to the Agreement as Exhibit D and either Exhibit E or Exhibit F,
as applicable, or (ii) an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Securities Administrator or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Master Servicer, the Securities Administrator or the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Securities Administrator, the Depositor, the Seller and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

         No transfer of this Class R Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(d) of the Agreement stating, among other
things, that the transferee's acquisition of a Class R Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code (the "Code") and will not subject the Depositor, the Trustee, the
Securities Administrator, the Master Servicer, any Servicer or the Trust Fund to
any obligation or liability in addition to those undertaken in the Agreement or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that none
of the Depositor, the Trustee, the Master Servicer or the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Securities Administrator.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% of the aggregate

                                      A-6-5

<PAGE>



Certificate Principal Balance of the related Class or Classes of Certificates.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Certificates in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated transferee.

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Depositor, the Master Servicer, the
Securities Administrator, the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Securities
Administrator, the Trustee or any such agent shall be affected by notice to the
contrary.

                  The obligations created by the Agreement with respect to this
Certificate (other than the obligations to make payments to Certificateholders
with respect to the termination of the Agreement) shall terminate upon the
remittance of all funds due under the Agreement, coinciding with or following
the earlier to occur of (i) the maturity or other liquidation (or Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan or (ii) the optional purchase by the party
named in the Agreement of all the Mortgage Loans and other related assets of the
Trust Fund remaining in the outstanding Loan Group in accordance with the terms
of the Agreement. Such optional purchase may be made only on or after the
Distribution Date on which the aggregate Scheduled Principal Balance of the
Mortgage Loans in such Loan Group is less than the percentage of the aggregate
Scheduled Principal Balance specified in the Agreement of the Mortgage Loans in
such Loan Group at the Cut-Off Date. The exercise of such right will effect the
early retirement of this Certificate. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.


                                      A-6-6

<PAGE>



         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.

                                      A-6-7

<PAGE>



         IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.

Dated: April 30, 2004


                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                               Authorized Officer



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R Certificates referred to in the
within-mentioned Agreement.


                                  WELLS FARGO BANK, N.A.
                                  as Securities Administrator


                                  By:_______________________________________
                                               Authorized Signatory



<PAGE>



                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass- Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

                  I (We) further direct the Securities Administrator to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
                           ____________________________________________________
                                    Signature by or on behalf of assignor


                                      _________________________________________
                                             Signature Guaranteed


                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.




<PAGE>



                                                                       EXHIBIT B

                                   [RESERVED]
                                   ----------



<PAGE>



                                                                       EXHIBIT C

                           FORM OF TRANSFER AFFIDAVIT

                                             Affidavit pursuant to Section
                                             860E(e)(4) of the Internal Revenue
                                             Code of 1986, as amended, and for
                                             other purposes

STATE OF          )
                  )ss:
COUNTY OF         )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Deutsche Mortgage Securities,
Inc. Mortgage Loan Trust, Series 2004-3 Mortgage Pass-Through Certificates,
Class R Certificates (the "Residual Certificates") for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by Deutsche Mortgage
Securities, Inc. (upon advice of counsel) to constitute a reasonable arrangement
to ensure that the Residual Certificates will not be owned directly or
indirectly by a disqualified organization; and (iv) it will not transfer such
Residual Certificates unless (a) it has received from the transferee an
affidavit in substantially the same form as this affidavit containing these same
four representations and (b) as of the time of the transfer, it does not have
actual knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.




<PAGE>



         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.


                [NAME OF INVESTOR]


                By:
                      --------------------------------------------------------
                      [Name of Officer]
                      [Title of Officer]
                      [Address of Investor for receipt of distributions]

                      Address of Investor for receipt of tax
                      information:


                                       C-2

<PAGE>



         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he/she
executed the same as his/her free act and deed and the free act and deed of the
Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF


My commission expires the ___ day of ___________________, 20___.



                                       C-3

<PAGE>



                                                                       EXHIBIT D

                         FORM OF TRANSFEROR CERTIFICATE


                                               ______________,200___


HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-3

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:     Deutsche Mortgage Securities, Inc., 2004-3

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention:     Deutsche Mortgage Securities, Inc.
               Alternative Loan Trust, Series 2004-3

Re:      Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series 2004-3,
         Class [[I][II]-CE][[I][II]-P][R]Mortgage Pass-Through Certificates
         --------------------------------------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of Series
2004-3 Mortgage Pass-Through Certificates, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of April 1, 2004 among Deutsche Mortgage
Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A., as
master servicer and securities administrator, and HSBC Bank USA, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, a covenants
with, the Depositor, the Trustee and the Securities Administrator that:

         Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that



<PAGE>



would require registration or qualification pursuant thereto. The Seller will
not act in any manner set forth in the foregoing sentence with respect to any
Certificate. The Seller has not and will not sell or otherwise transfer any of
the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.


                                       Very truly yours,



                                       (Seller)

                                       By:
                                          --------------------------------------

                                       Name:
                                            ------------------------------------

                                       Title:
                                             -----------------------------------


                                       D-2

<PAGE>



                                                                       EXHIBIT E

             FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

                                                 ___________,200__

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-3

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Deutsche Mortgage Securities, Inc., 2004-3

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention: Deutsche Mortgage Securities, Inc.
           Alternative Loan Trust, Series 2004-3

         Re:      Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series
                  2004-3, Class [[I][II]-CE][[I][II]-P][R] Mortgage Pass-Through
                  Certificates
                  -------------------------------------------------------------

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Series 2004-3 Mortgage Pass-Through Certificates, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of April 1, 2004 among Deutsche
Mortgage Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as master servicer and securities administrator, and HSBC Bank USA, as
trustee (the "Trustee"). All terms used herein and not otherwise defined shall
have the meanings set forth in the Pooling and Servicing Agreement. The
Purchaser hereby certifies, represents and warrants to, and covenants with, the
Depositor, the Securities Administrator and the Trustee that:

                           1. The Purchaser understands that (a) the
                  Certificates have not been and will not be registered or
                  qualified under the Securities Act of 1933, as amended (the
                  "Act") or any state securities law, (b) the Depositor is not
                  required to so register or qualify the Certificates, (c) the
                  Certificates may be resold only if registered and qualified
                  pursuant to the provisions of the Act or any state securities
                  law, or if an exemption from such registration and
                  qualification is available, (d) the Pooling and Servicing
                  Agreement contains restrictions regarding the transfer of the
                  Certificates and (e) the Certificates will bear a legend to
                  the foregoing effect.





<PAGE>



                           2. The Purchaser is acquiring the Certificates for
                  its own account for investment only and not with a view to or
                  for sale in connection with any distribution thereof in any
                  manner that would violate the Act or any applicable state
                  securities laws.

                           3. The Purchaser is (a) a substantial, sophisticated
                  institutional investor having such knowledge and experience in
                  financial and business matters, and, in particular, in such
                  matters related to securities similar to the Certificates,
                  such that it is capable of evaluating the merits and risks of
                  investment in the Certificates, (b) able to bear the economic
                  risks of such an investment and (c) an "accredited investor"
                  within the meaning of Rule 501 (a) promulgated pursuant to the
                  Act.

                           4. The Purchaser has been furnished with, and has had
                  an opportunity to review (a) [a copy of the Private Placement
                  Memorandum, dated ______, 2004, relating to the Certificates
                  (b)] a copy of the Pooling and Servicing Agreement and [(b)]
                  [(c)] such other information concerning the Certificates, the
                  Mortgage Loans and the Depositor as has been requested by the
                  Purchaser from the Depositor or the Seller and is relevant to
                  the Purchaser's decision to purchase the Certificates. The
                  Purchaser has had any questions arising from such review
                  answered by the Depositor or the Seller to the satisfaction of
                  the Purchaser. [If the Purchaser did not purchase the
                  Certificates from the Seller in connection with the initial
                  distribution of the Certificates and was provided with a copy
                  of the Private Placement Memorandum (the "Memorandum")
                  relating to the original sale (the "Original Sale") of the
                  Certificates by the Depositor, the Purchaser acknowledges that
                  such Memorandum was provided to it by the Seller, that the
                  Memorandum was prepared by the Depositor solely for use in
                  connection with the Original Sale and the Depositor did not
                  participate in or facilitate in any way the purchase of the
                  Certificates by the Purchaser from the Seller, and the
                  Purchaser agrees that it will look solely to the Seller and
                  not to the Depositor with respect to any damage, liability,
                  claim or expense arising out of, resulting from or in
                  connection with (a) error or omission, or alleged error or
                  omission, contained in the Memorandum, or (b) any information,
                  development or event arising after the date of the
                  Memorandum.]

                           5. The Purchaser has not and will not nor has it
                  authorized or will it authorize any person to (a) offer,
                  pledge, sell, dispose of or otherwise transfer any
                  Certificate, any interest in any Certificate or any other
                  similar security to any person in any manner, (b) solicit any
                  offer to buy or to accept a pledge, disposition of other
                  transfer of any Certificate, any interest in any Certificate
                  or any other similar security from any person in any manner,
                  (c) otherwise approach or negotiate with respect to any
                  Certificate, any interest in any Certificate or any other
                  similar security with any person in any manner, (d) make any
                  general solicitation by means of general advertising or in any
                  other manner or (e) take any other action, that (as to any of
                  (a) through (e) above) would constitute a distribution of any
                  Certificate under the Act, that would render the disposition
                  of any Certificate a violation of Section 5 of the Act or any
                  state securities law, or that would require registration or
                  qualification pursuant thereto. The Purchaser will not sell or
                  otherwise transfer any of the Certificates, except in
                  compliance with the provisions of the Pooling and Servicing
                  Agreement.


<PAGE>




                                         Very truly yours,



                                         (Purchaser)

                                         By:
                                            ------------------------------------

                                         Name:
                                              ----------------------------------

                                         Title:
                                               ---------------------------------




                                       E-3

<PAGE>



                                                                       EXHIBIT F

                       FORM OF RULE 144A INVESTMENT LETTER

                                                                        [Date]

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-3

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Deutsche Mortgage Securities, Inc., 2004-3

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention: Deutsche Mortgage Securities, Inc.
           Alternative Loan Trust, Series 2004-3

         Re:      Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series
                  2004-3 Mortgage Pass-Through Certificates, (the
                  "Certificates"), including the Class I-CE, II-CE, I-P, II-P
                  and R Certificates (the "Privately Offered Certificates")
                  ---------------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

                  (i)      we understand that the Privately Offered Certificates
                           are not being registered under the Securities Act of
                           1933, as amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Privately Offered
                           Certificates, the trust in which the Certificates
                           represent the entire beneficial ownership interest
                           (the "Trust") or any other matter we deemed relevant
                           to our decision to purchase Privately Offered
                           Certificates has been made available to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Privately Offered Certificates; we are an
                           institutional "accredited investor" as defined in
                           Section 501(a) of Regulation D promulgated under the
                           Act and a sophisticated institutional investor;



<PAGE>



                  (iv)     we are acquiring Privately Offered Certificates for
                           our own account, not as nominee for any other person,
                           and not with a present view to any distribution or
                           other disposition of the Privately Offered
                           Certificates;

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)
                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration requirements of the
                           Act and any applicable state securities or "Blue Sky"
                           laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the
                           Privately Offered Certificates (such disposition or
                           exchange not being currently foreseen or
                           contemplated), we will not transfer or exchange any
                           of the Privately Offered Certificates unless:

                                    (A) (1) the sale is to an Eligible Purchaser
                           (as defined below), (2) if required by the Pooling
                           and Servicing Agreement (as defined below) a letter
                           to substantially the same effect as either this
                           letter or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Securities
                           Administrator) is executed promptly by the purchaser
                           and delivered to the addressees hereof and (3) all
                           offers or solicitations in connection with the sale,
                           whether directly or through any agent acting on our
                           behalf, are limited only to Eligible Purchasers and
                           are not made by means of any form of general
                           solicitation or general advertising whatsoever; and

                                    (B) if the Privately Offered Certificate is
                           not registered under the Act (as to which we
                           acknowledge you have no obligation), the Privately
                           Offered Certificate is sold in a transaction that
                           does not require registration under the Act and any
                           applicable state securities or "blue sky" laws and,
                           if Wells Fargo Bank, N.A. (the "Securities
                           Administrator") so requests, a satisfactory Opinion
                           of Counsel is furnished to such effect, which Opinion
                           of Counsel shall be an expense of the transferor or
                           the transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate directly or indirectly by, or on
                           behalf of, an employee benefit plan or other
                           retirement arrangement which is subject to Title I of
                           the Employee Retirement Income Security Act of 1974,
                           as amended ("ERISA"), and/or section 4975 of the
                           Internal Revenue Code of 1986, as amended (the
                           "Code"), or (ii) are

                                       F-2

<PAGE>



                           providing an opinion of counsel to the effect that
                           the proposed transfer and holding of a Privately
                           Offered Certificate: (I) is permissible under
                           applicable law, (II) will not result in any
                           non-exempt prohibited transaction under Section 406
                           of ERISA or Section 4975 of the Code and (III) will
                           not subject the Depositor, the Trustee, the Master
                           Servicer, the Securities Administrator, any Servicer
                           or the Trust Fund to any obligation or liability in
                           addition to those undertaken in the Agreement.

                  (ix)     We understand that each of the Class I-CE, II-CE,
                           I-P, II-P and R Certificates bears, and will continue
                           to bear, a legend to substantiate the following
                           effect: "THIS CERTIFICATE MAY NOT BE HELD BY OR
                           TRANSFERRED TO A NON-UNITED STATES PERSON OR A
                           DISQUALIFIED ORGANIZATION (AS DEFINED BELOW). SOLELY
                           FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS
                           CERTIFICATE IS A "RESIDUAL INTEREST" IN A "REAL
                           ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
                           ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
                           OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
                           ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
                           CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE
                           PROVISIONS OF SECTION 5.3 OF THE AGREEMENT REFERRED
                           TO HEREIN. NO TRANSFER OF THIS CERTIFICATE MAY BE
                           MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES
                           EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(d) OF
                           THE AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION
                           5.3(d) OF THE AGREEMENT THAT THE PURCHASE OF THIS
                           CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
                           NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
                           TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
                           RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
                           ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT
                           SUBJECT THE MASTER SERVICER, THE TRUSTEE, THE
                           DEPOSITOR, THE SECURITIES ADMINISTRATOR, ANY SERVICER
                           OR THE TRUST FUND TO ANY OBLIGATION OR LIABILITY IN
                           ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT. ANY
                           RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
                           CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED
                           TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE
                           THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES
                           OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL
                           SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
                           INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
                           INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
                           ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN
                           SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX
                           IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
                           ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
                           511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN
                           SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH

                                       F-3

<PAGE>



                           PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR
                           (3) SHALL HEREINAFTER BE REFERRED TO AS A
                           "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A
                           DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
                           TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF
                           TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN
                           ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
                           CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
                           THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY
                           TRANSFER, SALE OR OTHER DISPOSITION OF THIS
                           CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
                           AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
                           REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE
                           OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
                           DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
                           HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
                           OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
                           THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED
                           TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH
                           AND THE PROVISIONS OF SECTION 5.3(d) OF THE AGREEMENT
                           REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED
                           ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
                           OWNERSHIP OF THIS CERTIFICATE. THIS CERTIFICATE HAS
                           NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
                           SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
                           LAWS OF ANY STATE AND MAY NOT BE RESOLD OR
                           TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH
                           ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
                           TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER
                           SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
                           TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF
                           SECTION 5.3 OF THE AGREEMENT."

                  "Eligible Purchaser" means a corporation, partnership or other
entity which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

                  Terms not otherwise defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement, dated as of April 1,
2004, between Deutsche Mortgage Securities, Inc., as depositor, Wells Fargo
Bank, N.A., as master servicer and securities administrator, and HSBC Bank USA,
as Trustee (the "Agreement").

                  If the Purchaser proposes that its Certificates be registered
in the name of a nominee on its behalf, the Purchaser has identified such
nominee below, and has caused such nominee to complete the Nominee
Acknowledgment at the end of this letter.


                                       F-4

<PAGE>



Name of Nominee (if any):
                          ---------------------------------


                                       F-5

<PAGE>



                  IN WITNESS WHEREOF, this document has been executed by the
undersigned who is duly authorized to do so on behalf of the undersigned
Eligible Purchaser on the ___ day of ________, 20___.

                                       Very truly yours,

                                       [PURCHASER]

                                       By:
                                            -----------------------------------
                                                (Authorized Officer)

                                       [By:
                                           ------------------------------------
                                                Attorney-in-fact]



<PAGE>



                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                         [NAME OF NOMINEE]

                                         By:
                                            -----------------------------------
                                                  (Authorized Officer)


                                         [By:
                                               --------------------------------
                                                  Attorney-in-fact]



<PAGE>



                                                                       EXHIBIT G

                         FORM OF BENEFIT PLAN AFFIDAVIT
[Date]

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-3

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Deutsche Mortgage Securities, Inc., 2004-3

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention: Deutsche Mortgage Securities, Inc.
           Mortgage Loan Trust, Series 2004-3

         Re:      Deutsche Mortgage Securities, Inc. Mortgage Loan Trust, Series
                  2004-3 Mortgage Pass-through Certificates, (the "Trust") Class
                  I-CE, II-CE, I-P, II-P and R Certificates (the "Purchased
                  Certificates")
                  -------------------------------------------------------------

Under penalties of perjury, I, ___________________, declare that, to the best of
my knowledge and belief, the following representations are true, correct and
complete; and

                  1. That I am the _________ of _________________ (the
"Purchaser"), whose taxpayer identification number is ___________, and on behalf
of which I have the authority to make this affidavit.

                  2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust.

                  3. The Purchaser either (a) is not an employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or a "plan" described in Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") or any entity deemed to hold plan assets of any of
the foregoing by reason of a plan's investment in such entity (a "Plan") or (b)
has provided the opinion of counsel required by Section 5.3(d) of the
Agreement.]





<PAGE>



IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly executed
on its behalf, by its duly authorized officer this    day of _____________, 20 .


                                            [Purchaser]
                                            By:_______________________________
                                            Its:

                                       G-2

<PAGE>




                                                                    SCHEDULE ONE
                                  LOAN SCHEDULE

                 [TO BE PROVIDED BY THE DEPOSITOR UPON REQUEST]








<PAGE>


                                                                    SCHEDULE TWO
                           PREPAYMENT CHARGE SCHEDULE




<PAGE>

                                 DEUTSCHE BANK @
                                  CMO POSITION
                         PRELIMINARY COLLATERAL ANALYSIS
                           DMSI 04-3 - FIXED - GROUP I
                                  1,330 RECORDS
                              BALANCE: 250,000,058

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------
                                        DMSI 04-3 - FIXED - GROUP I
------------------------------------------------------------------------------------------------------------------------------
                                                            CURRENT
PRODUCT                                 PRINCIPAL
TYPE                                     BALANCE       0-1 YEARS    1-2 YEARS   2-3 YEARS   3-4 YEARS    4-5 YEARS   5 YEARS
------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                  <C>          <C>       <C>         <C>           <C>       <C>
Fixed - 15 Year                         10,085,672.36        24.05        10.6      8.22        15.72         0         41.42
------------------------------------------------------------------------------------------------------------------------------
Fixed - 20 Year                            822,181.46        10.27           0         0        47.05         0         42.67
------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year                        203,310,119.65           29       19.41      7.56        17.69         0         26.34
------------------------------------------------------------------------------------------------------------------------------
Balloon - 15/30                          2,765,567.04            0       89.78      7.06            0         0          3.16
------------------------------------------------------------------------------------------------------------------------------
Fixed - 30 Year - 10 Year IO            33,016,517.09        27.33       18.67      9.31        12.05         0         32.65
------------------------------------------------------------------------------------------------------------------------------
TOTAL:                                 250,000,057.60         28.2       19.67      7.79        16.76         0         27.58
------------------------------------------------------------------------------------------------------------------------------

</TABLE>