<PAGE>

                                                                    Exhibit 10.1
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                             WELLS FARGO BANK, N.A.

                                (Master Servicer)

                                       and

                             WELLS FARGO BANK, N.A.

                                   (Servicer)

                               SERVICING AGREEMENT

                            Dated as of ______, 20__


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                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

                                    ARTICLE 1

                                   Definitions

Section 1.1    Definitions.....................................................2
               ACH.............................................................2
               Adjusted Tangible Net Worth.....................................2
               Administration Disclosure.......................................2
               Advance.........................................................2
               Affiliate.......................................................2
               Amounts Held for Future Distribution............................2
               Applicable Unscheduled Principal Receipt Period.................2
               Appraisal Report................................................2
               ARM Loan........................................................3
               Assignment......................................................3
               Assumption......................................................3
               Balloon Amount..................................................3
               Balloon Loan....................................................3
               Bankruptcy Code.................................................3
               BIF.............................................................3
               Borrower........................................................3
               Business Day....................................................3
               Buydown Agreement...............................................3
               Buydown Funds...................................................3
               Certificate Account.............................................3
               Code............................................................4
               Condominium Project.............................................4
               Condominium Unit................................................4
               Converted Mortgage Loan.........................................4
               Co-op Shares....................................................4
               Current Value...................................................4
               Curtailment.....................................................4
               Custodial Buydown Account.......................................4
               Custodial Principal and Interest (P&I) Account..................4
               Custodial Subsidy Account.......................................4
               Custodial Taxes and Insurance (T&I) Account.....................4
               Custodian.......................................................4
               Cut-Off Date....................................................4
               Debt Service Reduction..........................................4
               Deficient Valuation.............................................5
               Delinquency/Delinquent..........................................5
               Determination Date..............................................5
               Directly Operate................................................5

                                       -i-

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               Document Transfer Event.........................................5
               Due Date........................................................5
               Due-On-Sale Clause..............................................5
               Eligible Account................................................5
               Eligible Custodial P&I Account..................................5
               Eligible Investments............................................5
               Errors and Omissions Policy.....................................5
               Escrow Funds....................................................6
               Escrow Item.....................................................6
               FDIC............................................................6
               FHA.............................................................6
               FHLMC...........................................................6
               Fidelity Bond...................................................6
               Final Title Condition Report....................................6
               Flood Insurance.................................................6
               FNMA............................................................6
               Full Unscheduled Principal Receipt..............................6
               GNMA............................................................6
               GPM (or GPARM) Loan.............................................6
               Gross Margin....................................................6
               Hazard Insurance................................................7
               HUD.............................................................7
               Index...........................................................7
               Insurance Policy................................................7
               Insurance Proceeds..............................................7
               Interest Adjustment Date........................................7
               Letter of Credit................................................7
               Liquidation.....................................................7
               Liquidation Proceeds............................................7
               Liquidation Profits.............................................7
               Loan Originator.................................................7
               Loan-to-Value (LTV).............................................7
               Lost Note Affidavit.............................................8
               Master Servicer.................................................8
               Master Servicer Loan Number.....................................8
               Maximum Lifetime Mortgage Interest Rate.........................8
               Maximum Negative Amortization Amount............................8
               MERS............................................................8
               Mid-Month Receipt Period........................................8
               Minimum Lifetime Mortgage Interest Rate.........................8
               Month End Interest..............................................8
               Month End Interest Shortfall....................................8
               Monthly Accounting Reports......................................8
               Monthly Payment.................................................9
               Monthly Remittance..............................................9
               Mortgage Interest Rate..........................................9

                                      -ii-

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               Mortgage Loan...................................................9
               Mortgage Loan Documents.........................................9
               Mortgage Note...................................................9
               Mortgage Note Assumption Rider..................................9
               Mortgage Pass-Through Certificates..............................9
               Mortgaged Property..............................................9
               Mortgagee.......................................................9
               Non-Recoverable Advance........................................10
               Notice of Periodic Adjustment..................................10
               Officer:.......................................................10
               Opinion of Counsel.............................................10
               Owner Mortgage Loan File.......................................10
               P&I Advance....................................................10
               Partial Liquidation Proceeds...................................10
               Partial Liquidation Receipt Period.............................10
               Partial Unscheduled Principal Receipt..........................10
               Payment Adjustment Date........................................11
               Periodic Payment Cap...........................................11
               Periodic Rate Cap..............................................11
               Person.........................................................11
               Person.........................................................11
               Pledged Asset Mortgage Loan....................................11
               PMI Advance....................................................11
               Pool Insurance.................................................11
               Pool Insurer...................................................11
               Pooling and Servicing Agreement................................11
               Preliminary Title Report.......................................11
               Prepayment In Full.............................................11
               Primary Mortgage Insurance.....................................11
               Primary Mortgage Insurer.......................................12
               Prior Month Receipt Period.....................................12
               Property Inspection Report.....................................12
               Prudent Servicing Practices....................................12
               PUD (Planned Unit Development).................................12
               PUD Unit.......................................................12
               Purchase Price.................................................12
               Rating Agency..................................................12
               Real Estate Owned (REO)........................................12
               Realized Loss..................................................12
               Recovery.......................................................12
               Reference Bank.................................................13
               REMIC..........................................................13
               REMIC Provisions...............................................13
               Remittance Date................................................13
               Rents from Real Property.......................................13
               REO Disposition................................................13

                                      -iii-

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               REO Disposition Period.........................................13
               Representing Party.............................................13
               Retained Mortgage Loan File....................................13
               SAIF...........................................................13
               Scheduled Principal Balance....................................13
               Security Instrument............................................14
               Servicer.......................................................14
               Servicer Loan Mortgage Number..................................14
               Servicer Mortgage Loan File....................................14
               Servicing Fee..................................................14
               Servicing Fee Percentage.......................................14
               Single Family Property.........................................14
               Subsidy Funds..................................................14
               Subsidy Loan...................................................14
               Tangible Net Worth.............................................14
               T&I Advance....................................................14
               Threshold Amount...............................................15
               Title Insurance................................................15
               Transfer of Ownership..........................................15
               Trust Administrator............................................15
               Trustee........................................................15
               Type 1 Mortgage Loans..........................................15
               Type 2 Mortgage Loans..........................................15
               Unpaid Principal Balance.......................................15
               Unscheduled Principal Receipt..................................15
               Value..........................................................16

                                    ARTICLE 2

                                  Construction

Section 2.1    Legal Construction.............................................17
     2.1.1.       Compliance with Applicable Law..............................17
     2.1.2.       Potential Conflict..........................................17
     2.1.3.       Consistent Legal Compliance.................................17
     2.1.4.       General Interpretive Rules..................................17
     2.1.5.       Construction of Provisions..................................17

Section 2.2    Servicer Practices.............................................17
     2.2.1.       Prudent Servicing Practices.................................17
     2.2.2.       Non-Discrimination Practices................................18

Section 2.3    General Provisions.............................................18
     2.3.1.       Servicer's Agreement........................................18
     2.3.2.       Term of Agreement...........................................18
     2.3.3.       Amended Mortgage Loan Schedule..............................18
     2.3.4.       Assignment and Replacement..................................18

                                      -iv-

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     2.3.5.       Notices.....................................................18
     2.3.6.       Change of Accountants.......................................19

                                    ARTICLE 3

                                REMIC Compliance

Section 3.1    General........................................................20
     3.1.1.       Applicability...............................................20
     3.1.2.       Modifications of Mortgage...................................20
     3.1.3.       Indemnification with Respect to Certain Taxes and
                  Loss of REMIC Status........................................20

Section 3.2    REO Qualification..............................................21
     3.2.1.       Foreclosure Property........................................21
     3.2.2.       Foreclosure Property Qualification Restrictions.............21
     3.2.3.       REO Disposition.............................................21

Section 3.3    Prohibited Transactions and Activities.........................22
     3.3.1.       Mortgage Loan Disposition Restriction.......................22
     3.3.2.       Personal Property...........................................22

Section 3.4    Eligible Investments...........................................22
     3.4.1.       Custodial Account...........................................22
     3.4.2.       Escrow Account..............................................23

                                    ARTICLE 4

                             Servicer Considerations

Section 4.1    Servicer Eligibility Standards.................................24
     4.1.1.       Regulatory Approvals and Licensing..........................24
     4.1.2.       Net Worth and Portfolio Requirements........................24
     4.1.3.       Auditor's Opinion and Other Annual Reports..................24
     4.1.4.       Servicing Experience........................................26
     4.1.5.       Material Changes............................................26

Section 4.2    Errors and Omissions Insurance.................................27
     4.2.1.       E & O Requirement...........................................27
     4.2.2.       E & O Scope.................................................27
     4.2.3.       E & O Policy Maintenance....................................27
     4.2.4.       E & O Deductible............................................27
     4.2.5.       E & O Qualifications........................................27
     4.2.6.       Notice of Claim.............................................28

Section 4.3    Fidelity Bond Coverage.........................................28
     4.3.1.       Fidelity Bond Requirement...................................28

                                       -v-

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     4.3.2.       Fidelity Bond Coverage......................................28
     4.3.3.       Fidelity Bond Scope.........................................28
     4.3.4.       Fidelity Bond Maintenance...................................28
     4.3.5.       Fidelity Bond Deductible....................................28
     4.3.6.       Fidelity Bond Rating Requirement............................28
     4.3.7.       Notice of Event.............................................28

Section 4.4    Servicer's Liability...........................................28
     4.4.1.       Liability Exposure..........................................28
     4.4.2.       Scope of Liability..........................................28

Section 4.5    Indemnification................................................29
     4.5.1.       Scope of Indemnity..........................................29
     4.5.2.       Survival of Indemnity.......................................29

Section 4.6    Servicer's Compensation........................................29
     4.6.1.       Servicing Fee Amount........................................29
     4.6.2.       Servicing Fee Source........................................30

                                    ARTICLE 5

                         Representations And Warranties

Section 5.1    General........................................................31
     5.1.1.       Reliance....................................................31
     5.1.2.       Survival of Representations and Warranties..................31
     5.1.3.       Breach of Representation or Warranty........................31
     5.1.4.       Assignment of Representations and Warranties................31

Section 5.2    Servicer Representations and Warranties........................32
     5.2.1.       Qualification of Servicer...................................32
     5.2.2.       Requisite...................................................32
     5.2.3.       No Conflicts................................................32
     5.2.4.       Enforceable Agreement.......................................32
     5.2.5.       No Consents.................................................32
     5.2.6.       Agency Approval.............................................32
     5.2.7.       Financial Condition.........................................33
     5.2.8.       Servicing...................................................33
     5.2.9.       No Impairment...............................................33
     5.2.10.      No Inquiries................................................33
     5.2.11.      Custodial and Escrow Accounts Current.......................33
     5.2.12.      Insurance Maintenance.......................................33

                                      -vi-

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                                    ARTICLE 6

                              Custodial Accounting

Section 6.1    In General.....................................................35
     6.1.1.       Custodial Account Establishment.............................35
     6.1.2.       Custodial Account Separateness..............................35
     6.1.3.       Custodial Account Maintenance...............................35
     6.1.4.       Escrow Investment...........................................36
     6.1.5.       Clearing Account............................................37
     6.1.6.       Custodial Buydown Account...................................37
     6.1.7.       Certificate Account.........................................37
     6.1.8.       Custodial Subsidy Account...................................37

Section 6.2    Custodial P&I Account..........................................37
     6.2.1.       Mandatory Deposits..........................................37
     6.2.2.       Optional Deposits...........................................38
     6.2.3.       Permissible Withdrawals.....................................38
     6.2.4.       Account Beneficiary.........................................39
     6.2.5.       Use of Accounts.............................................39

Section 6.3    Custodial T&I Account..........................................39
     6.3.1.       Mandatory Deposits..........................................39
     6.3.2.       Permissible Withdrawals.....................................39
     6.3.3.       Account Requirements........................................40
     6.3.4.       Account Balance.............................................40

Section 6.4    Eligible Account Investments...................................40
     6.4.1.       Eligible Investments Permitted..............................40
     6.4.2.       Eligible Investment Restrictions............................40
     6.4.3.       Eligible Investment Income..................................40
     6.4.4.       Eligible Investment Losses..................................40
     6.4.5.       Eligible Investments Reports................................41
     6.4.6.       Inter-Company Uses of Funds.................................41

                                    ARTICLE 7

                            Mortgage Loan Accounting

Section 7.1    In General.....................................................42
     7.1.1.       Mortgage Loan Accounting Practices..........................42
     7.1.2.       Record Keeping..............................................42
     7.1.3.       Record Review...............................................42

Section 7.2    Mortgage Loan Records..........................................42
     7.2.1.       Account Records.............................................42
     7.2.2.       Account Record Information..................................42

                                      -vii-

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     7.2.3.       Accounting Practice.........................................43
     7.2.4.       Access to Certain Documentation and Information
                  Regarding the Mortgage Loans................................43

Section 7.3    Accounting Procedures..........................................43
     7.3.1.       Principal and Interest Computation..........................43
     7.3.2.       Amortization Requirement....................................43
     7.3.3.       Negative Amortization.......................................44
     7.3.4.       Interest Calculations.......................................44
     7.3.5.       Buydown Loans...............................................44

Section 7.4    Application Procedure..........................................44
     7.4.1.       Application Priority........................................44
     7.4.2.       Reapplication of Prior Payments.............................44
     7.4.3.       Advance Payments............................................44

Section 7.5    Curtailments...................................................45
     7.5.1.       Curtailment Amount..........................................45
     7.5.2.       Curtailment Application.....................................45
     7.5.3.       Effect of Curtailment.......................................45
     7.5.4.       Curtailment Transmission....................................45

Section 7.6    Liquidations...................................................45
     7.6.1.       Month End Interest..........................................45
     7.6.2.       Liquidation Reports.........................................45
     7.6.3.       Deposit of Funds............................................45
     7.6.4.       Document Request............................................45

Section 7.7    Realized Losses................................................46
     7.7.1.       Liquidation Realized Loss Determination.....................46
     7.7.2.       Bankruptcy Realized Loss Determination......................46
     7.7.3.       Reporting Requirement.......................................46
     7.7.4.       Servicer's Liability........................................46

                                    ARTICLE 8

                                    ARM Loans

Section 8.1    ARM Loan Servicing.............................................48
     8.1.1.       In General..................................................48
     8.1.2.       Servicer's Liability........................................48
     8.1.3.       Adjustment Reports..........................................48
     8.1.4.       Substitute Index............................................48

Section 8.2    Notice of Periodic Adjustment..................................48
     8.2.1.       Notice Requirement..........................................48
     8.2.2.       Notice Contents.............................................49

                                     -viii-

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Section 8.3    ARM Loan Conversion............................................49
     8.3.1.       Servicer's Determination....................................49
     8.3.2.       Conversion Notification.....................................49
     8.3.3.       Purchase by Servicer........................................49

                                    ARTICLE 9

                               Mortgage Loan Files

Section 9.1    Owner Mortgage Loan Files and Retained Mortgage Loan Files.....50
     9.1.1.       Owner Mortgage Loan File and Retained Mortgage
                  Loan File Requirements......................................50
     9.1.2.       Custodian...................................................50
     9.1.3.       Release of Documents from Owner Mortgage Loan File or
                  Retained Mortgage Loan File.................................50
     9.1.4.       Execution by Trustee........................................51
     9.1.5.       Representing Party Officers' Certificate....................51
     9.1.6.       Custodial Fees..............................................51

Section 9.2    Servicer Mortgage Loan Files...................................51
     9.2.1.       Servicer Mortgage Loan File Requirements....................51
     9.2.2.       Servicer Mortgage Loan File Access..........................52
     9.2.3.       Alternate Media.............................................52

Section 9.3    Requisite Form.................................................53
     9.3.1.       Form of Endorsements........................................53
     9.3.2.       Form of Assignment..........................................53

                                   ARTICLE 10

                                     Escrows

Section 10.1   Escrow Criteria................................................54
     10.1.1.      Escrow Requirement..........................................54
     10.1.2.      Mortgage Loans without Escrow...............................54

Section 10.2   Payment of Escrow Items........................................54
     10.2.1.      Escrow Payment Obligation...................................54
     10.2.2.      Escrow Item Payments........................................54
     10.2.3.      Escrow Fund Insufficiency...................................54
     10.2.4.      Nonpayment Notice...........................................54

Section 10.3   Escrow Fund Determination......................................55
     10.3.1.      Escrow Funds Analysis.......................................55
     10.3.2.      Escrow Fund Surplus.........................................55
     10.3.3.      Escrow Fund Deficiency......................................55

                                      -ix-

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Section 10.4   Records........................................................55
     10.4.1.      Escrow Funds Records........................................55
     10.4.2.      Escrow Obligations Records..................................55

Section 10.5   Escrow Waiver..................................................55
     10.5.1.      Waiver Conditions...........................................55
     10.5.2.      Waiver Rescission...........................................55

                                   ARTICLE 11

                       Collection and Servicing Practices

Section 11.1   General Servicing Requirements.................................56
     11.1.1.      Servicing Practices.........................................56
     11.1.2.      Tax Returns and Other Reports...............................56
     11.1.3.      Servicer Internal Controls..................................56
     11.1.4.      Pool Insurance Compliance...................................56
     11.1.5.      Primary Mortgage Insurance Compliance.......................56
     11.1.6.      Letter of Credit Compliance.................................56

Section 11.2   Delegation of Duties...........................................56
     11.2.1.      Permissible Delegations.....................................56
     11.2.2.      Delegee's Qualifications....................................57
     11.2.3.      Responsibility for Costs....................................58
     11.2.4.      Servicer's Liability........................................58

Section 11.3   Due-on-Sale Clause Enforcement.................................58
     11.3.1.      Enforcement Requirement.....................................58
     11.3.2.      Litigation Considerations...................................58
     11.3.3.      Approval Requirement........................................58
     11.3.4.      Exempt Transactions.........................................58

Section 11.4   Assumptions....................................................60
     11.4.1.      Assumption Requirements.....................................60
     11.4.2.      Approval and Release........................................60
     11.4.3.      Notification of Assumption..................................61
     11.4.4.      Assumption Fees.............................................61
     11.4.5.      Disclosure Requirement......................................61

Section 11.5   Partial Releases and Easements.................................61
     11.5.1.      Prerequisites...............................................61
     11.5.2.      Release or Modification of Lien.............................61
     11.5.3.      Master Servicer's Approval..................................62

Section 11.6   Recordation of Assignments.....................................62
     11.6.1.      Recordation Requirement.....................................62
     11.6.2.      Extension of Recording Period...............................62

                                       -x-

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     11.6.3.      Delivery Requirement........................................62
     11.6.4.      Waiver of Recordation.......................................62

Section 11.7   General Servicing Considerations...............................63
     11.7.1.      Abandonment.................................................63
     11.7.2.      Buydown Funds...............................................63
     11.7.3.      Notification Matters........................................63
     11.7.4.      Eminent Domain..............................................64
     11.7.5.      Late Charges................................................64

Section 11.8   Borrower Bankruptcy............................................64
     11.8.1.      Servicer's Duty.............................................64
     11.8.2.      Responsibility for Costs....................................64
     11.8.3.      Challenge Bankruptcy Reductions.............................64
     11.8.4.      Bankruptcy Adjustments......................................64
     11.8.5.      Bankruptcy Plan Surveillance................................64

                                   ARTICLE 12

                             Delinquency Management

Section 12.1   In General.....................................................65
     12.1.1.      Servicing Practices.........................................65
     12.1.2.      Servicer's Capabilities.....................................65
     12.1.3.      Servicing Objectives........................................65
     12.1.4.      Servicer's Expenses.........................................65

Section 12.2   Delinquency Servicing Procedures...............................65
     12.2.1.      Late Notice.................................................65
     12.2.2.      Telephonic Inquiry..........................................65
     12.2.3.      Notice of Default...........................................66
     12.2.4.      Borrower Interview..........................................66
     12.2.5.      Continuing Contacts.........................................66
     12.2.6.      Property Inspection.........................................66

Section 12.3   Relief of Borrowers............................................66
     12.3.1.      Servicer's Role.............................................66
     12.3.2.      Servicer's Discretion.......................................66
     12.3.3.      Relief Requirement..........................................66
     12.3.4.      Primary Mortgage Insurance Considerations...................66
     12.3.5.      Responsibility for Costs....................................67
     12.3.6.      Forbearance Plan............................................67
     12.3.7.      Accommodation Limitations...................................67
     12.3.8.      Pool Insurance Considerations...............................67

Section 12.4   Special Delinquency Servicing Considerations...................68
     12.4.1.      Advance Responsibility During Delinquency...................68

                                      -xi-

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     12.4.2.      Primary Mortgage Insurance Compliance.......................68
     12.4.3.      Pool Insurance Compliance...................................68

                                   ARTICLE 13

                           Foreclosure Administration

Section 13.1   Foreclosure Prerequisites......................................69
     13.1.1.      Foreclosure/Alternative to Foreclosure Initiation...........69
     13.1.2.      Foreclosure Expenses........................................69
     13.1.3.      Hazardous Wastes............................................69

Section 13.2   Deed-in-Lieu of Foreclosure....................................70
     13.2.1.      Conditions..................................................70
     13.2.2.      Subsequent Actions..........................................71

Section 13.3   Actions Prior to Foreclosure...................................71
     13.3.1.      Notice Requirements.........................................71
     13.3.2.      Initiation of Proceedings...................................71
     13.3.3.      Short Sale of Defaulted Mortgage Loans in
                  Lieu of Foreclosure.........................................71

Section 13.4   Foreclosure Procedures.........................................71
     13.4.1.      Foreclosure Expenses........................................71
     13.4.2.      Bidding Instructions........................................72
     13.4.3.      Buydown Funds Use...........................................72
     13.4.4.      Servicer's Responsibilities.................................72
     13.4.5.      Conveyance Documents........................................72

Section 13.5   Mortgage Loan Reinstatement....................................72
     13.5.1.      Borrower's Full Payment.....................................72
     13.5.2.      Borrower's Partial Payment..................................73
     13.5.3.      Obligations upon Reinstatement..............................73
     13.5.4.      Certain Assumptions Permitted...............................73

                                   ARTICLE 14

                               REO Administration

Section 14.1   General Provisions.............................................74
     14.1.1.      REO Action Plan.............................................74

Section 14.2   REO Servicing..................................................74
     14.2.1.      REO Servicing Requirements..................................74
     14.2.2.      Servicer's Responsibilities.................................74
     14.2.3.      Notice......................................................75

Section 14.3   REO Records and Reports........................................75

                                      -xii-

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     14.3.1.      Records Retention...........................................75
     14.3.2.      Evidence of Title...........................................75
     14.3.3.      REO Expenses................................................75
     14.3.4.      REO Documents...............................................76

Section 14.4   REO Marketing..................................................76
     14.4.1.      REO Marketing Efforts.......................................76
     14.4.2.      REO Sales...................................................76
     14.4.3.      Primary Mortgage Insurance Considerations...................76
     14.4.4.      Master Servicer Instructions................................77
     14.4.5.      Pool Insurance Considerations...............................77

Section 14.5   REO Rehabilitation.............................................77
     14.5.1.      REO Rehabilitation Requirement..............................77
     14.5.2.      Master Servicer Approval....................................77
     14.5.3.      Written Contractor Bids.....................................77
     14.5.4.      Primary Mortgage Insurance Considerations...................77

Section 14.6   REO Administration Failure.....................................77
     14.6.1.      Servicer Removal............................................77
     14.6.2.      Servicer's Continuing Obligations...........................78
     14.6.3.      Servicer's Duty to Compensate...............................78

                                   ARTICLE 15

                         Insurance and Letter of Credit

Section 15.1   General Provisions.............................................79
     15.1.1.      Insurance Requirements......................................79
     15.1.2.      Uninsured Losses............................................79
     15.1.3.      Servicer's Obligation to Maintain Insurance.................79
     15.1.4.      Insurance Notices...........................................80
     15.1.5.      Default by Insurer..........................................80
     15.1.6.      Insurance Carrier Rating....................................80
     15.1.7.      Insurance Carrier Licenses..................................80
     15.1.8.      Risk Exposure...............................................80
     15.1.9.      Evidence of Insurance.......................................80

Section 15.2   Primary Mortgage Insurance.....................................81
     15.2.1.      Primary Mortgage Insurance Requirement......................81
     15.2.2.      Primary Mortgage Insurance Coverage.........................81
     15.2.3.      Primary Mortgage Insurer Downgrading........................81
     15.2.4.      Primary Mortgage Insurance Cancellation.....................82
     15.2.5.      Primary Mortgage Insurance Claims...........................82

Section 15.3   Hazard Insurance...............................................82
     15.3.1.      Hazard Insurance Requirement................................82

                                     -xiii-

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     15.3.2.      Hazard Insurance Coverage...................................83
     15.3.3.      Hazard Insurance Deductible.................................83
     15.3.4.      Hazard Insurance Vacancy Coverage...........................83
     15.3.5.      Hazard Insurance Mortgagee Provisions.......................83

Section 15.4   Flood Insurance................................................83
     15.4.1.      Flood Insurance Requirement.................................83
     15.4.2.      Flood Insurance Coverage....................................83
     15.4.3.      Flood Insurance Deductible..................................83

Section 15.5   Title Insurance................................................83
     15.5.1.      Servicer's Obligations......................................83
     15.5.2.      Policy Custody..............................................84
     15.5.3.      Title Insurance Claims......................................84

Section 15.6   Insurance Loss Settlements.....................................84
     15.6.1.      Settlement Approval.........................................84
     15.6.2.      Settlement Disbursements....................................84
     15.6.3.      Settlement Funds............................................85
     15.6.4.      Settlement Notice...........................................85
     15.6.5.      Continuing Coverage.........................................85
     15.6.6.      Property Inspections........................................85

Section 15.7   Letters of Credit..............................................85
     15.7.1.      Letter of Credit Draws......................................85
     15.7.2.      Draws in the Event of Servicer Termination..................86

                                   ARTICLE 16

                          Condominium and PUD Insurance

Section 16.1   General Provisions.............................................87
     16.1.1.      Applicability...............................................87
     16.1.2.      Premiums....................................................87
     16.1.3.      Deductible Reserves.........................................87
     16.1.4.      Name of Insured.............................................87
     16.1.5.      Mortgagee Clause............................................87
     16.1.6.      Reconstruction Coverage.....................................87

Section 16.2   Common Area Multiple Peril Insurance...........................87
     16.2.1.      Common Area Multiple Peril Insurance Requirement............87
     16.2.2.      Common Area Multiple Peril Insurance Coverage...............88
     16.2.3.      Common Area Multiple Peril Insurance Deductible.............88
     16.2.4.      Boiler and Machinery Coverage...............................88

Section 16.3   Blanket Hazard Insurance.......................................88
     16.3.1.      Blanket Hazard Insurance Requirement........................88

                                      -xiv-

<PAGE>

     16.3.2.      Blanket Hazard Insurance Coverage...........................88
     16.3.3.      Blanket Hazard Insurance Deductible.........................88

Section 16.4   Common Area Comprehensive General Liability (CGL) Insurance....88
     16.4.1.      Common Area CGL Insurance Requirement.......................88
     16.4.2.      Common Area CGL Insurance Coverage..........................89

Section 16.5   Owners' Association Fidelity Insurance.........................89
     16.5.1.      Owners' Association Fidelity Insurance Requirement..........89
     16.5.2.      Owners' Association Fidelity Insurance Coverage.............89

Section 16.6   Blanket Flood Insurance........................................89
     16.6.1.      Blanket Flood Insurance Requirement.........................89
     16.6.2.      Blanket Flood Insurance Coverage............................89
     16.6.3.      Blanket Flood Insurance Deductible..........................90

                                   ARTICLE 17

                                    Advances

Section 17.1   Principal and Interest Advances................................91
     17.1.1.      P&I Advance Requirement.....................................91
     17.1.2.      P&I Advance Limitation......................................91
     17.1.3.      P&I Advance Recovery........................................91
     17.1.4.      Advance During Bankruptcy and Foreclosure...................91

Section 17.2   Foreclosure Advances...........................................92
     17.2.1.      Foreclosure Advance Requirement.............................92
     17.2.2.      Foreclosure Advance Limitation..............................92
     17.2.3.      Foreclosure Advance Recovery................................92
     17.2.4.      Foreclosure Advance Records.................................92

Section 17.3   Tax & Insurance Advances.......................................92
     17.3.1.      T&I Advance Requirement.....................................92
     17.3.2.      T&I Advance Recovery........................................92
     17.3.3.      T&I Advance Limitation......................................92
     17.3.4.      Advance During Bankruptcy and Foreclosure...................92

Section 17.4   Non-Recoverable Advances.......................................93
     17.4.1.      Ordinary Recovery...........................................93
     17.4.2.      Final Recovery..............................................93
     17.4.3.      Non-Recoverable Advance Determination.......................93

Section 17.5   Failure to Advance.............................................93
     17.5.1.      Grounds for Termination.....................................93
     17.5.2.      Servicer Reimbursement......................................93

                                      -xv-

<PAGE>

Section 17.6   Rehabilitation Advance.........................................94
     17.6.1.      Rehabilitation Advance Requirement..........................94
     17.6.2.      Rehabilitation Advance Limitation...........................94
     17.6.3.      Rehabilitation Advance Recovery.............................94

Section 17.7   PMI Advances...................................................94
     17.7.1.      PMI Advance Option..........................................94
     17.7.2.      PMI Advance Recovery........................................94

                                   ARTICLE 18

                             Reporting Requirements

Section 18.1   Monthly Accounting Reports.....................................95
     18.1.1.      Monthly Accounting Report Requirement.......................95
     18.1.2.      Monthly Accounting Report Elements..........................95
     18.1.3.      Automated Reports...........................................95
     18.1.4.      Electronic Reporting........................................95
     18.1.5.      Machine Readable Records....................................95

Section 18.2   Account Reconciliations........................................96
     18.2.1.      Reconciliation Preparation..................................96
     18.2.2.      Account Records.............................................96

Section 18.3   Monthly Remittance Requirements................................96
     18.3.1.      Remittance of Funds.........................................96
     18.3.2.      Servicer Compensation.......................................97

                                   ARTICLE 19

                     Transfers and Termination of Servicing

Section 19.1   Transfer of Servicing..........................................98
     19.1.1.      Transfer Prohibition........................................98
     19.1.2.      Transfer Request............................................98
     19.1.3.      Servicer Liability..........................................98
     19.1.4.      Master Servicer's Determination.............................98

Section 19.2   Termination of Servicing.......................................98
     19.2.1.      Grounds for Termination.....................................98
     19.2.2.      Trustee Notification........................................99
     19.2.3.      Servicer Termination........................................99
     19.2.4.      Consequences of Termination.................................99
     19.2.5.      Effect of Termination......................................100
     19.2.6.      Custodial Account Threshold Reduction......................100

                                      -xvi-

<PAGE>

                                   ARTICLE 20

                            Miscellaneous Provisions

Section 20.1   Amendments....................................................101
     20.1.1.      Unilateral Authority.......................................101
     20.1.2.      Consensual Amendment.......................................101
     20.1.3.      Trustee Notification.......................................101
     20.1.4.      Trustee Disapproval........................................101

Section 20.2   General Construction..........................................101
     20.2.1.      Binding Nature.............................................101
     20.2.2.      Entire Agreement...........................................101
     20.2.3.      Governing Law..............................................102
     20.2.4.      Indulgences Not Waivers....................................102
     20.2.5.      Titles Not to Affect Interpretation........................102
     20.2.6.      Provisions Severable.......................................102
     20.2.7.      Servicer an Independent Contractor.........................102
     20.2.8.      Third Party Beneficiary....................................102
     20.2.9.      Counterparts...............................................103

                                     -xvii-

<PAGE>

             This Servicing Agreement, made as of this ____ day of May, 20__
(the "Agreement"), between Wells Fargo Bank, N.A., a national banking
association (the "Servicer") and Wells Fargo Bank, N.A., a national banking
association, (the "Master Servicer"), recites and provides as follows:

                                    RECITALS

             WHEREAS, the Servicer is engaged in the business of servicing
residential mortgage loans and the Servicer desires to be retained to service
the Mortgage Loans identified on Schedule A hereto subject to and in accordance
with the terms of this Agreement; and

             WHEREAS, the Master Servicer, acting pursuant to the Pooling and
Servicing Agreement related to the Wells Fargo Asset Securities Corporation,
Mortgage Pass-Through Certificates, Series 200_-_, will supervise, monitor and
oversee the performance of the Servicer under this Agreement.

             NOW THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Servicer and the Master Servicer agree as follows:


<PAGE>

                                    ARTICLE 1

                                   Definitions

Section 1.1  Definitions.
             -----------

             ACH: Automated Clearing House.

             Adjusted Tangible Net Worth: As of the date of determination
thereof, the sum of: (i) Servicer's Tangible Net Worth; plus (ii) one percent
(1%) of the amount of Servicer's servicing portfolio, as determined by the
Master Servicer in the Master Servicer's reasonable discretion.

             Administration Disclosure: With respect to a Pledged Asset Mortgage
Loan, the Pledged Asset Mortgage Loan Administration and Information Sharing
Disclosure and Acknowledgment executed by the related Borrower.

             Advance: Any payment made with respect to a Mortgage Loan or the
related Mortgaged Property by the Servicer from its own funds made in the nature
of an advance pursuant to the provisions of this Agreement.

             Affiliate: Any person or entity controlling, controlled by or under
common control with a specified entity. The term "control" means the power to
direct the management and policies of a person or entity, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise. "controlling" and "controlled" shall have meanings correlative to the
foregoing.

             Amounts Held for Future Distribution: As to any Remittance Date,
amounts on account of (i) all Unscheduled Principal Receipts received after the
last day of the Applicable Unscheduled Principal Receipt Period ending in the
month of such Remittance Date and all related payments of interest on such
principal prepayments and amounts received from the Servicer or a Representing
Party in the month of such Remittance Date as the Purchase Price for any
repurchased Mortgage Loan and (ii) payments which represent early receipt of
scheduled payments of principal and interest due on a date or dates subsequent
to the related Due Date.

             Applicable Unscheduled Principal Receipt Period: With respect to
the Type 1 Mortgage Loans and both Full Unscheduled Principal Receipts and
Partial Unscheduled Principal Receipts, the Mid-Month Receipt Period. With
respect to the Type 2 Mortgage Loans and both Full Unscheduled Principal
Receipts and Partial Unscheduled Principal Receipts, the Prior Month Receipt
Period.

             Appraisal Report: A report setting forth the fair market value of a
Mortgaged Property as determined by an appraiser who, at the time the appraisal
was conducted, met the minimum qualifications of FNMA and FHLMC for appraisers
of conventional residential mortgage loans.

                                       -2-

<PAGE>

             ARM Loan: A Mortgage Loan, if any, the Mortgage Interest Rate of
which is subject to periodic adjustment in accordance with the terms of the
related Mortgage Note.

             Assigned Letter of Credit: A Letter of Credit related to a Pledged
Asset Mortgage Loan originated on or after June 14, 2002 where the named
beneficiary has been changed from Wells Fargo Bank to the Trustee.

             Assignment: The document which transfers all the rights of the
secured party pursuant to a Security Instrument to a transferee for valid
consideration.

             Assumption: The process whereby, on sale or transfer of a legal or
beneficial interest in a Mortgaged Property, the new owner of such Mortgaged
Property becomes legally obligated under the terms of the related existing
Security Instrument, Mortgage Note and any addenda and riders to such Security
Instrument or Mortgage Note. Subsequent to the Assumption, the new owner of the
property shall be deemed to be the Borrower under the related Mortgage Loan
Documents.

             Balloon Amount: The remaining principal balance to be paid at
maturity of a Balloon Loan by the related Borrower pursuant to the terms of the
related Mortgage Note.

             Balloon Loan: A Mortgage Loan, if any, which amortizes its
principal payments over a period which is longer than the stated maturity of
such Mortgage Loan pursuant to the terms of the related Mortgage Note so as to
require the payment of the Balloon Amount at maturity in order to retire the
Mortgage Loan.

             Bankruptcy Code: The Bankruptcy Code of 1978, as amended.

             BIF: The Bank Insurance Fund.

             Borrower: The individual obligated to repay a Mortgage Loan. (The
Borrower may be the beneficiary or beneficiaries of an Illinois land trust when
the Mortgaged Property is located in Illinois.)

             Business Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a legal holiday in the City of New York, State of Maryland, State of
Minnesota or State of Iowa or (iii) a day on which banking institutions in the
City of New York, or the State of Maryland, State of Minnesota or State of Iowa
are authorized or obligated by law or executive order to be closed.

             Buydown Agreement: An agreement governing the application of
Buydown Funds with respect to a Mortgage Loan.

             Buydown Funds: Money advanced by a builder, seller or other
interested party to reduce a Borrower's Monthly Payment during the initial years
of a Mortgage Loan.

             Certificate Account: A segregated custodial account established by
the Master Servicer into which the Servicer shall remit funds from the related
Custodial P&I Account.

                                       -3-

<PAGE>

             Code: The Internal Revenue Code of 1986, as it may be amended from
time to time, any successor statutes thereto, and applicable U.S. Department of
the Treasury temporary or final regulations promulgated thereunder.

             Condominium Project: Real estate including the separate ownership
in fee, or on a satisfactory leasehold estate, of a particular residential unit
with an indivisible interest in the real estate designated for common ownership
strictly by unit owners.

             Condominium Unit: A Single Family Property within a Condominium
Project.

             Converted Mortgage Loan: An ARM Loan with respect to which the
Borrower has complied with the applicable requirements of the related Mortgage
Note to convert the related Mortgage Interest Rate to a fixed rate of interest,
and the Servicer has processed such conversion.

             Co-op Shares: Shares issued by private non-profit housing
corporations.

             Current Value: The appraised value of the related Mortgaged
Property (a) from an Appraisal Report conducted within six (6) months of the use
of such value under this Agreement or (b) determined by such other method
acceptable to the Master Servicer.

             Curtailment: A partial prepayment by the Borrower of principal on a
Mortgage Loan that otherwise is current, which prepayment is not accompanied by
an amount representing the full amount of scheduled interest due on the related
Mortgage Loan.

             Custodial Buydown Account: An account maintained by the Servicer
specifically to hold all Buydown Funds to be applied to individual Mortgage
Loans.

             Custodial Principal and Interest (P&I) Account: An account
maintained by the Servicer, specifically for the collection of principal and
interest, Insurance Proceeds, Liquidation Proceeds and other amounts received
with respect to Mortgage Loans.

             Custodial Subsidy Account: An account maintained by the Servicer
specifically to hold all Subsidy Funds to be applied to individual Mortgage
Loans.

             Custodial Taxes and Insurance (T&I) Account: An account maintained
by the Servicer, specifically for the payment of real estate tax assessments and
insurance premiums in respect of Mortgaged Property related to Mortgage Loans.

             Custodian: The Corporate Trust Services division of Wells Fargo
Bank or its successor in interest under the Custodial Agreement.

             Cut-Off Date: As specified in Section 11.02 of the Pooling and
Servicing Agreement.

             Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a

                                       -4-

<PAGE>

proceeding under the Bankruptcy Code, except such a reduction constituting a
Deficient Valuation.

             Deficient Valuation: With respect to any Mortgage Loan the related
Mortgaged Property of which is involved in a bankruptcy proceeding, the
reduction by the bankruptcy court of the Unpaid Principal Balance of the
Mortgage Note.

             Delinquency/Delinquent: A Delinquency with respect to a Mortgage
Loan occurs, or a Mortgage Loan is Delinquent when all or part of a Borrower's
Monthly Payment or, where applicable, an Escrow Item is paid after the
applicable Due Date. For reporting purposes, a Delinquency that remains uncured
for 30 days or more, but less than 60 days, is considered a 30-day Delinquency.
A Delinquency that has been uncured for more than 60 days, but less than 90
days, is considered a 60-day Delinquency. A Delinquency that has been uncured
for 90 days or more is considered a 90-day Delinquency. The foregoing shall be
determined based on an assumption of a year comprised of twelve 30-day months.

             Determination Date: The 17th day of the month in which the related
Remittance Date occurs, or if such 17th day is not a Business Day, the Business
Day preceding such 17th day.

             Directly Operate: With respect to any REO, the direct or indirect
furnishing or rendering of services to the tenants thereof, management or
operation of such REO, the holding of such REO primarily for sale to customers,
performance of any construction work thereon or any use of such REO in a trade
or business, in each case other than with the approval of the Master Servicer;
provided, however, that the Servicer shall not be considered to Directly Operate
an REO solely because it establishes rental terms, chooses tenants, enters into
or renews leases, deals with taxes and insurance, or makes decisions as to
repairs or capital expenditures with respect to such REO.

             Document Transfer Event: As defined in the Pooling and Servicing
Agreement.

             Due Date: With respect to a Mortgage Loan, the day of each month on
which a Monthly Payment and, where applicable, any Escrow Funds payment is due
as stated in the related Mortgage Note. The Due Date for all Mortgage Loans
shall be the first day of each month.

             Due-On-Sale Clause: The clause in a Security Instrument requiring
the payment of the Unpaid Principal Balance of the related Mortgage Loan upon
the sale of, or the transfer of an interest in, the related Mortgaged Property.

             Eligible Account: As defined in the Pooling and Servicing
Agreement.

             Eligible Custodial P&I Account: As defined in Section 6.1.2.

             Eligible Investments: As defined in the Pooling and Servicing
Agreement.

             Errors and Omissions Policy: An insurance policy naming the
Trustee, its successors and assigns as loss payees relative to losses caused by
errors or omissions of the

                                       -5-

<PAGE>

Servicer and its personnel, including, but not limited to losses caused by the
failure to pay insurance premiums or taxes, to record or perfect liens, to
effect valid transfers of Mortgage Notes, or to properly service Mortgage Loans.

             Escrow Funds: All funds collected with respect to a Mortgage Loan
by the Servicer to cover related Escrow Items according to the provisions of
this Agreement.

             Escrow Item: An expense required to be paid by a Borrower under the
related Security Instrument including, without limitation, taxes, special
assessments, ground rents, water, sewer and other governmental impositions or
charges that are or may become liens on the related Mortgaged Property prior to
that of the related Security Instrument, as well as Hazard Insurance, Flood
Insurance and Primary Mortgage Insurance premiums.

             FDIC: Federal Deposit Insurance Corporation and its successors.

             FHA: The Federal Housing Administration and its successors.

             FHLMC: Federal Home Loan Mortgage Corporation and its successors.

             Fidelity Bond: An insurance policy naming the Trustee, its
successors and assigns as loss payees relative to losses caused by improper or
unlawful acts of the Servicer's personnel.

             Final Title Condition Report. A title condition report issued by
American Land Title Company, Inc., a wholly-owned subsidiary of the Servicer,
evidencing that according to the records of the county in which the Mortgaged
Property is located, the Security Instrument is a valid first lien on the
related Mortgaged Property subject only to permitted encumbrances.

             Flood Insurance: An insurance policy insuring against flood damage
to a Mortgaged Property, where required.

             FNMA: Federal National Mortgage Association and its successors.

             Full Unscheduled Principal Receipt: Any Unscheduled Principal
Receipt with respect to a Mortgage Loan (i) in the amount of the outstanding
principal balance of such Mortgage Loan and resulting in the full satisfaction
of such Mortgage Loan or (ii) representing Liquidation Proceeds other than
Partial Liquidation Proceeds.

             GNMA: Government National Mortgage Association and its successors.

             GPM (or GPARM) Loan: A fixed rate Mortgage Loan or ARM Loan, if
any, that provides during a portion of its term that the interest portion of the
Monthly Payment on such Mortgage Loan shall be less than the full amount of
interest due on such Mortgage Loan based on the related Mortgage Interest Rate.

             Gross Margin: With respect to each ARM Loan, the fixed percentage
specified in the related Mortgage Note that is added to the applicable Index on
each Interest Adjustment Date to determine the new Mortgage Interest Rate for
such ARM Loan.

                                       -6-

<PAGE>

             Hazard Insurance: A fire and casualty extended coverage insurance
policy insuring against loss or damage from fire and other perils covered within
the scope of standard extended hazard coverage naming the Servicer, its
successors and assigns, as a mortgagee under a standard mortgagee clause,
together with all riders and endorsements thereto.

             HUD: The United States Department of Housing and Urban Development
and its successors.

             Index: With respect to each ARM Loan, the applicable index
specified in the related Mortgage Note that is added to the related Gross Margin
on each Interest Adjustment Date to determine the new Mortgage Interest Rate for
such ARM Loan.

             Insurance Policy: Any insurance policy for a Mortgage Loan required
hereunder, including, without limitation, Primary Mortgage Insurance, Hazard
Insurance, Flood Insurance, Pool Insurance and Title Insurance policies.

             Insurance Proceeds: Proceeds from an Insurance Policy, other than
such proceeds which are applied by the Borrower or held to be applied by the
Borrower to the restoration of the related Mortgaged Property.

             Interest Adjustment Date: With respect to each ARM Loan, the date
on which the related Mortgage Interest Rate changes in accordance with the terms
of such Mortgage Note, the first of which is set forth in such Mortgage Note and
on the respective Mortgage Loan Schedule.

             Letter of Credit : With respect to a Pledged Asset Mortgage Loan, a
letter of credit issued by the Pledge Holder which may be drawn on by the
Servicer in the event that the related Pledged Asset Mortgage Loan continues in
default for 90 days.

             Liquidation: Application of full payment to a Mortgage Loan which
results in the release of the lien of the related Security Instrument on any
related Mortgaged Property, whether through foreclosure and sale of the related
REO, condemnation, prepayment in full or otherwise, or the realization of all
sums from the final disposition of the related REO, provided that when a PMI
Advance is made with respect to a Mortgage Loan, for purposes of Sections 7.6,
7.7, 18.1 and 18.3, the Liquidation of a Mortgage Loan will be deemed to have
occurred upon the application of all payments to the Mortgage Loan other than
the Primary Mortgage Insurance proceeds covered by such PMI Advance.

             Liquidation Proceeds: The amount received or advanced by the
Servicer which ultimately relates to the Liquidation of a Mortgage Loan,
including any PMI Advances and amounts received by drawing on a Letter of Credit
in connection with the Liquidation of a Mortgage Loan.

             Liquidation Profits: As defined in the Pooling and Servicing
Agreement.

             Loan Originator: The entity that closes a Mortgage Loan in its own
name.

             Loan-to-Value (LTV): The ratio that results when the Unpaid
Principal Balance of a Mortgage Loan is divided by the Value of the related
Mortgaged Property.

                                       -7-

<PAGE>

             Lost Note Affidavit: An affidavit executed by an Officer of the
Servicer identifying the applicable Mortgage Note, stating that such Mortgage
Note has not been located after a thorough and diligent search and agreeing to
indemnify the purchaser of the Mortgage Loan against any loss from the
unavailability of the original Mortgage Note. Attached to such affidavit shall
be a true and correct copy of the original Mortgage Note.

             Master Servicer: Wells Fargo Bank or any successors or assigns.
Initially, the master servicing functions will be performed by the Corporate
Trust Services division of Wells Fargo Bank.

             Master Servicer Loan Number: A unique number assigned by the Master
Servicer to each Mortgage Loan set forth in Schedule A.

             Maximum Lifetime Mortgage Interest Rate: With respect to each ARM
(or GPARM) Loan, the interest rate set forth in the related Mortgage Note as the
maximum Mortgage Interest Rate thereunder.

             Maximum Negative Amortization Amount: With respect to any Mortgage
Loan that provides for negative amortization, the maximum principal balance
which is permitted under the terms of the related Mortgage Note.

             MERS: Mortgage Electronic Registration Systems, Inc. or its
designee.

             Mid-Month Receipt Period: With respect to each Remittance Date, the
one month period beginning on the Determination Date occurring in the calendar
month preceding the month in which such Remittance Date occurs and ending on the
day preceding the Determination Date immediately preceding such Remittance Date.

             Minimum Lifetime Mortgage Interest Rate: With respect to each ARM
Loan, the interest rate set forth in the related Mortgage Note as the minimum
Mortgage Interest Rate thereunder, if any.

             Month End Interest: In the event that any Prepayments in Full of
any Mortgage Loans are received by the Servicer after the Applicable Unscheduled
Principal Receipt Period in the month in which such prepayments occurred, the
lesser of (i) the aggregate of the difference for each such Mortgage Loan
between the interest payment that would have been paid on such Mortgage Loan
that was prepaid through the last day of the month in which such prepayment
occurred and the interest payment actually received by the Servicer on such
Mortgage Loan that was prepaid and (ii) the product of 1/12th of 0.20% and the
aggregate of the Scheduled Principal Balance of all the Mortgage Loans serviced
hereunder.

             Month End Interest Shortfall: The excess of the amount described in
clause (i) of the definition of Month End Interest over the amount described in
clause (ii) of the definition thereof.

             Monthly Accounting Reports: The reports due from the Servicer on a
monthly basis (in the case of Type 2 Mortgage Loans, due no later than the tenth
calendar day of the month, or the preceding Business Day if the tenth day is not
a Business Day and, in the case of

                                       -8-

<PAGE>

Type 1 Mortgage Loans, due no later than the 18th calendar day of the month, or
the preceding Business Day if the 18th day is not a Business Day) relative to
all Mortgage Loans serviced by the Servicer, which reports are required to be
submitted to the Master Servicer.

             Monthly Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest due in the applicable month under the
terms of the related Mortgage Note.

             Monthly Remittance: The Servicer's aggregate payment due each month
to the Certificate Account as specified in Section 18.3.1.

             Mortgage Interest Rate: The interest rate payable by the Borrower
on a Mortgage Loan according to the terms of the Mortgage Note which, in the
case of ARM Loans, may be adjusted periodically as provided in such Mortgage
Note.

             Mortgage Loan: A mortgage loan identified on Schedule A. "Mortgage
Loan" includes all of the Trustee's right, title and interest in and to such
Mortgage Loan, including, without limitation, the related Mortgage Loan
Documents and all other material and information collected by the Servicer in
connection with the Mortgage Loan including Monthly Payments, Liquidation
Proceeds, Insurance Proceeds and all other rights, benefits and proceeds arising
from or in connection with such Mortgage Loan.

             Mortgage Loan Documents. With respect to a Mortgage Loan, the
documents to be delivered to the Custodian pursuant to Section 2.01 of the
Pooling and Servicing Agreement, and all other documents described in Article 9
hereof.

             Mortgage Loan Purchase Agreement: As defined in the Pooling and
Servicing Agreement.

             Mortgage Note: A manually executed written instrument evidencing
the related Borrower's promise to repay a stated sum of money, plus interest, to
the related Loan Originator by a specific date according to a schedule of
monthly principal and interest payments.

             Mortgage Note Assumption Rider: A rider attached to a Mortgage Note
which states the terms upon which an Assumption may occur, including, but not
limited to, consent in writing by the insurer under any Primary Mortgage
Insurance Policy with respect to the related Mortgage Loan.

             Mortgage Pass-Through Certificates: The specific series of Wells
Fargo Asset Securities Corporation, mortgage pass-through certificates specified
on page 1 of this Agreement.

             Mortgaged Property: Land, improvements thereon and other property
subject to the lien of a Security Instrument, which may include Co-op Shares or
residential long-term leases, securing repayment of the debt evidenced by the
related Mortgage Note.

             Mortgagee: The secured party to which a Security Instrument
initially grants a lien on the related Mortgaged Property.

                                       -9-

<PAGE>

             Net Mortgage Interest Rate: With respect to a Mortgage Loan, the
difference between (a) the Mortgage Interest Rate on such Mortgage Loan and (b)
the Servicing Fee Percentage.

             Non-Assigned Letter of Credit: A Letter of Credit where the named
beneficiary is Wells Fargo Bank.

             Non-Recoverable Advance: Any amount previously advanced by the
Servicer with respect to a Mortgage Loan which the Servicer has determined,
pursuant to the terms of this Agreement, not to be recoverable from Insurance
Proceeds, Liquidation Proceeds or other payments with respect to such Mortgage
Loan.

             Notice of Periodic Adjustment: With respect to each ARM Loan, a
notice provided to the Borrower of any changes or adjustments to the related
Mortgage Interest Rate or the related Monthly Payment.

             Officer: An officer of a corporation or a principal of a
partnership, who is authorized to execute documents on behalf of his corporation
or partnership, respectively.

             Opinion of Counsel: A written opinion of counsel, reasonably
acceptable in form and substance to the Master Servicer, and who may be in-house
or outside counsel to the Servicer but which must be Independent outside counsel
with respect to any such opinion of counsel concerning the taxation, or status
for tax purposes, of the Trustee.

             Owner Mortgage Loan File: With respect to each Mortgage Loan, a
file maintained by the Custodian for such Mortgage Loan, which file contains the
documents specified in Section 2.01(a) of the Pooling and Servicing Agreement,
as well as any other documents required to be added to the Owner Mortgage Loan
File pursuant to the Pooling and Servicing Agreement.

             P&I Advance: An advance by the Servicer of any principal and
interest payments not timely paid by the related Borrower (other than with
respect to a Balloon Loan, any amounts of principal payments in respect of
Balloon Amounts) to ensure that there are sufficient funds to cover the Monthly
Remittance on each Remittance Date.

             Partial Liquidation Proceeds: As to any Remittance Date,
Liquidation Proceeds received by the Servicer on a Mortgage Loan during the
related Partial Liquidation Receipt Period other than those Liquidation Proceeds
received during such Partial Liquidation Receipt Period which result from the
complete and final Liquidation of such Mortgage Loan.

             Partial Liquidation Receipt Period: As to any Remittance Date, the
period from and including the Determination Date occurring in the month
preceding the month of such Remittance Date (or, in the case of the first
Remittance Date, from and including the Cut-off Date) to but not including the
Determination Date occurring in the month of such Remittance Date.

             Partial Unscheduled Principal Receipt: An Unscheduled Principal
Receipt which is not a Full Unscheduled Principal Receipt.

                                      -10-

<PAGE>

             Payment Adjustment Date: With respect to each ARM Loan, the date on
which the Borrower's Monthly Payment changes in accordance with the terms of the
related Mortgage Note.

             Periodic Payment Cap: With respect to an ARM Loan, the limit on the
percentage increase that may be made on the related Monthly Payment on any
Payment Adjustment Date, as set forth in the related Mortgage Note.

             Periodic Rate Cap: With respect to an ARM Loan, the limit,
expressed as incremental percentage points, on the increase or decrease that may
be made to the related Mortgage Interest Rate on any Interest Adjustment Date
from such Mortgage Interest Rate immediately prior to such Interest Adjustment
Date, as set forth in the related Mortgage Note.

             Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust or unincorporated organization.

             Pledge Holder: The entity which issued a Letter of Credit.

             Pledged Asset Mortgage Loan : A Mortgage Loan as to which, at the
time of origination, a Letter of Credit was issued in favor of the initial
holder of such Mortgage Loan.

             PMI Advance: As defined in Section 17.7.1.

             Pool Insurance: An insurance policy insuring against certain credit
risk losses on certain Mortgage Loans up to a certain amount.

             Pool Insurer: With respect to any Mortgage Loan, the insurer under
the Pool Insurance policy relating to such Mortgage Loan.

             Pooling and Servicing Agreement: The pooling and servicing
agreement among Wells Fargo Asset Securities Corporation, as seller, Wells Fargo
Bank, N.A., as master servicer, the Trustee, and, if applicable, the Trust
Administrator, relating to the issuance of the Mortgage Pass-Through
Certificates.

             Preliminary Title Report: A report issued by a title insurance
company in anticipation of issuing a Title Insurance policy which evidences
existing liens and gives a preliminary opinion as to the absence of any
encumbrance on title to a Mortgaged Property, except liens to be removed on or
before purchase or refinance, as the case may be, by the Borrower and Permitted
Encumbrances.

             Prepayment In Full: With respect to any Mortgage Loan, any payment
by the Borrower in the amount of the outstanding principal balance of such
Mortgage Loan which is received in advance of its Due Date and is not
accompanied by an amount representing scheduled interest for any period
subsequent to the date of prepayment.

             Primary Mortgage Insurance: Insurance obtained from a Primary
Mortgage Insurer which insures the holder of a Mortgage Note against loss in the
event the related

                                      -11-

<PAGE>

Borrower defaults under such Mortgage Note or the related Security Instrument,
including all riders and endorsements thereto.

             Primary Mortgage Insurer: With respect to any Mortgage Loan, the
insurer under the Primary Mortgage Insurance policy relating to such Mortgage
Loan.

             Prior Month Receipt Period: With respect to each Remittance Date,
the calendar month preceding the month in which such Remittance Date occurs.

             Property Inspection Report: A report, submitted by the Servicer to
the Master Servicer, describing the related Mortgaged Property.

             Prudent Servicing Practices: Such practices observed generally by
servicers in discharging their servicing obligations in a prudent manner in
accordance with industry standards for mortgage loans similar to the Mortgage
Loans.

             PUD (Planned Unit Development): A parcel of real estate that
contains property and improvements owned and maintained by a homeowners'
association, corporation or trust for the enjoyment and use of individual PUD
Unit owners within that parcel of land. The shared portions of the parcel are
known as common property.

             PUD Unit: A single family residential property within a PUD.

             Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Servicer pursuant to Section 5.1.3 or Section 8.3.3 hereof, an
amount equal to (a) the Unpaid Principal Balance of the Mortgage Loan, plus (b)
accrued interest thereon at the Mortgage Interest Rate through the last day of
the month in which the purchase occurs, and, if the Servicer is the entity
paying the Purchase Price, minus (c) any unreimbursed advances of principal and
interest made by the Servicer on such Mortgage Loan and any outstanding
Servicing Fee owed with respect to such Mortgage Loan. Further, in connection
with any such purchase of a Mortgage Loan as a result of a breach of a
representation or warranty under this Agreement, the Servicer shall provide the
Trustee with an indemnity, in form and substance satisfactory to the Master
Servicer, against additional costs, expenses and taxes arising out of the
repurchase. With respect to any Mortgage Loan purchased or repurchased from the
Trustee pursuant to an agreement other than this Agreement, the purchase price
specified in such other agreement.

             Rating Agency: As defined in the Pooling and Servicing Agreement.

             Real Estate Owned (REO): Any Mortgaged Property the title to which
is acquired on behalf of the Trustee through foreclosure, deed-in-lieu of
foreclosure, abandonment or reclamation from bankruptcy in connection with a
defaulted Mortgage Loan.

             Realized Loss: As to any defaulted Mortgage Loan, any loss realized
by the Trustee of such Mortgage Loan as calculated pursuant to Section 7.7
hereof.

             Recovery : As defined in the Pooling and Servicing Agreement.

                                      -12-

<PAGE>

             Reference Bank: Wells Fargo Bank, N.A. or if such entity is no
longer lending money or no longer quoting a prime rate, such other entity as the
Master Servicer may specify by written notice to the Servicer.

             REMIC: The segregated pool or pools of assets designated as one or
more real estate mortgage investment conduits, within the meaning of the REMIC
Provisions, pursuant to the Pooling and Servicing Agreement.

             REMIC Provisions: The provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of the Code, and related provisions, and regulations and
rulings promulgated thereunder, as the foregoing may be in effect from time to
time and including any proposed legislation or regulations which, as proposed,
would have an effective date prior to enactment thereof.

             Remittance Date: The 24th day of each month (or the preceding
Business Day if the 24th day is not a Business Day). Each month, the Servicer
must transfer all required funds from the Custodial P&I Account to the
Certificate Account on or before the Remittance Date.

             Rents from Real Property: With respect to any REO, gross income of
the character described in Section 856(d) of the Code (generally, rent for the
use of real property, the amount of which is not dependent, in whole or in part,
upon the income or profit of any person, including certain payments for certain
services and personal property incidental to and customarily provided in
connection with the rental of such real property.)

             REO Disposition: The receipt by the Servicer of Liquidation
Proceeds and other payments and recoveries (including proceeds of a final sale)
from the sale or other disposition of the REO.

             REO Disposition Period: The period of time in which the Servicer
shall dispose or cooperate with the Trustee in disposing of an REO as set forth
in Section 14.4.2.

             Representing Party: A Person that has transferred Mortgage Loans,
directly or through one or more intermediaries, to the Trustee pursuant to an
agreement for the sale of Mortgage Loans pursuant to which a Representing Party
has made representations and warranties with respect to certain Mortgage Loans,
and under which the Trustee, its successors and assigns has recourse against
such Representing Party for any breach thereunder with respect to such Mortgage
Loans.

             Retained Mortgage Loan File: A file for each Mortgage Loan
maintained by the Servicer prior to any Document Transfer Event and by the
Custodian after any Document Transfer Event that contains the documents
specified in Section 2.01(b) of the Pooling and Servicing Agreement and any
additional documents required to be added to the Retained Mortgage Loan File
pursuant to the Pooling and Servicing Agreement.

             SAIF: The Savings Association Insurance Fund.

             Scheduled Principal Balance: With respect to each Mortgage Loan (or
related REO), the principal balance of such Mortgage Loan as of the applicable
Due Date calculated by

                                      -13-

<PAGE>

taking into account the application of any Monthly Payments due on or before
such Due Date (whether or not such Monthly Payments were received from the
Borrower), and Curtailments, Insurance Proceeds or Liquidation Proceeds, and
Realized Losses received or realized by the Servicer prior to such Due Date.

             Security Instrument: A written instrument creating a valid first
lien on a Mortgaged Property. A Security Instrument may be in the form of a
mortgage, deed of trust, deed to secure debt or security deed, including any
riders and addenda thereto.

             Servicer: Wells Fargo Bank, the entity that has entered into this
Agreement with the Master Servicer and any successors or assigns of Wells Fargo
Bank. Initially, the servicing functions will be performed by the Wells Fargo
Home Mortgage division of Wells Fargo Bank.

             Servicer Loan Mortgage Number: A unique number assigned by the
Servicer to a Mortgage Loan.

             Servicer Mortgage Loan File: A file maintained by the Servicer for
each Mortgage Loan that contains the documents specified in Section 9.2 hereof,
as well as any other documents that come into the Servicer's possession with
respect to a Mortgage Loan.

             Servicing Fee: For each Mortgage Loan, the compensation due the
Servicer in an amount equal to the product of (i) one-twelfth of the Servicing
Fee Percentage and (ii) the Scheduled Principal Balance of the Mortgage Loan as
of the immediately preceding Due Date (without taking into account any payment
of principal due on such Due Date).

             Servicing Fee Percentage: With respect to each Mortgage Loan, the
percentage specified on Schedule A hereto.

             Single Family Property: A one-unit residential property.

             Subsidy Funds: Funds contributed by the employer of a Borrower in
order to reduce the payments required from the Borrower for a specified period
in specified amounts.

             Subsidy Loan: A Mortgage Loan, if any, subject to a temporary
interest subsidy agreement pursuant to which the monthly interest payments made
by the related Borrower will be less than the scheduled monthly interest
payments on such Mortgage Loan, with the resulting difference in interest
payments being provided by the employer of the Borrower.

             Tangible Net Worth: As of the date of determination thereof, the
par value (or value stated on the Servicer's books) of the capital stock of all
classes of the Servicer, plus, or minus in the case of a deficiency, the amount
of paid in capital and retained earnings of the Servicer, all determined in
accordance with generally accepted accounting principles as are then in effect.
The Master Servicer may exclude assets that are unacceptable, in the Master
Servicer's reasonable discretion, from the determination of the Servicer's
Tangible Net Worth.

             T&I Advance: An advance by the Servicer of any taxes and insurance
premiums due with respect to any Mortgage Loan.

                                      -14-

<PAGE>

             Threshold Amount: With respect to any Custodial P&I Account, (i)
$100,000 or, in the case of any Eligible Custodial P&I Account, the aggregate
amount on deposit therein (i.e., an unlimited amount); or (ii) after any notice
has been given pursuant to Section 19.2.6, the amount specified in such notice.

             Title Insurance: An American Land Title Association (ALTA) mortgage
loan title policy form 1970, or other form of Title Insurance Policy acceptable
to FNMA or FHLMC, including all riders and endorsements thereto, insuring that
the Security Instrument constitutes a valid first lien on the related Mortgaged
Property subject only to permitted encumbrances.

             Transfer of Ownership: Includes, but is not limited to, the
conveyance of a Mortgaged Property, whether legal or equitable, voluntary or
involuntary, by any of the following methods:

             (a)  outright sale;
             (b)  deed;
             (c)  installment sale contract;
             (d)  land contract;
             (e)  contract for deed;
             (f)  leasehold interest with the term greater than three years;
             (g)  lease with option to purchase;
             (h)  land trust; or
             (i)  any other conveyance of an interest in real property,
                  including those involving secondary financing.

             Trust Administrator: If applicable, the trust administrator
specified in the Pooling and Servicing Agreement, its successors and assigns.

             Trustee: The trustee specified in the Pooling and Servicing
Agreement, its successors and assigns.

             Type 1 Mortgage Loans: The Mortgage Loans identified on Schedule A
as Type 1 Mortgage Loans.

             Type 2 Mortgage Loans: The Mortgage Loans identified on Schedule A
as Type 2 Mortgage Loans.

             Unpaid Principal Balance: With respect to any Mortgage Loan, the
outstanding principal balance payable by the Borrower under the terms of the
Mortgage Note.

             Unscheduled Principal Receipt: Any Mortgagor payment or other
recovery of principal on a Mortgage Loan which is received in advance of its Due
Date and is not accompanied by an amount representing scheduled interest for any
period subsequent to the date of prepayment, including, without limitation,
prepayments of principal (whether full or partial), Liquidation Proceeds,
Partial Liquidation Proceeds, Insurance Proceeds, proceeds of REO Dispositions,
Recoveries and proceeds received from any condemnation award or proceeds in lieu
of condemnation other than that portion of such proceeds released to the
mortgagor in accordance with the terms of the Mortgage Loan Documents or Prudent
Servicing Practices and

                                      -15-

<PAGE>

excluding any proceeds of a repurchase of a Mortgage Loan by the Servicer or a
Representing Party.

             Value: The lesser of the appraised value or sales price of the
related Mortgaged Property at the time the Mortgage Loan is closed. For a
refinanced Mortgage Loan, the Value of the related Mortgaged Property is its
appraised value at the time the refinanced Mortgage Loan is closed.

             Wells Fargo Bank: Wells Fargo Bank, N.A., or its successor in
interest.


                                      -16-

<PAGE>

                                    ARTICLE 2

                                  Construction

Section 2.1  Legal Construction
             ------------------

             2.1.1.  Compliance with Applicable Law. The obligations of the
Servicer pursuant to this Agreement shall at all times be performed in
compliance with all applicable laws.

             2.1.2.  Potential Conflict. If any obligation of the Servicer
pursuant to this Agreement shall give rise to a potential conflict with
applicable law, such obligation shall be construed so as to (a) comply with all
applicable laws and (b) effectuate with respect to such obligations, to the
fullest extent permitted by law, the intention of the parties hereto as
expressed in this Agreement.

             2.1.3.  Consistent Legal Compliance. The fact that certain
provisions of this Agreement contain language which expressly requires
compliance with all applicable laws, shall not give rise to an implication that
other provisions, which do not expressly include such language, operate in
derogation of the requirement for such legal compliance.

             2.1.4.  General Interpretive Rules. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(i) the terms defined in this Agreement have the meanings assigned to them in
this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender; (ii) reference
herein to "Article", "Section", "Clause", and other subdivisions, and to
"Exhibits", without reference to a document, are to designated Articles,
Sections, Clauses and other subdivisions of, and to Exhibits to, this Agreement;
(iii) reference to a Clause without further reference to a Section is a
reference to such Clause as contained in the same Section in which the reference
appears, and this rule shall also apply to other subdivisions; (iv) "including"
means "including but not limited to"; and (v) the words "herein", "hereof",
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular provision.

             2.1.5.  Construction of Provisions. Although certain provisions of
this Agreement contain express language which precludes the Servicer's recovery
of, or reimbursement for, expenses incurred hereunder, no inference to the
contrary shall be drawn from absence of such, or similar, language in any other
provision hereof regarding expenses.

Section 2.2  Servicer Practices
             ------------------

             2.2.1.  Prudent Servicing Practices. Where not inconsistent with
the provisions of this Agreement, the Servicer shall at all times perform its
obligations hereunder in accordance with Prudent Servicing Practices, which
shall not be less exacting than the Servicer employs and exercises in servicing
and administering mortgage loans for its own account, or for the account

                                      -17-

<PAGE>

of FNMA or FHLMC, including exploring alternatives to foreclosure to mitigate
Realized Losses.

             2.2.2.  Non-Discrimination Practices. The Servicer shall at all
times perform its obligations under this Agreement so as to (a) treat Borrowers
on the basis of their individual merits and (b) not discriminate against
Borrowers on the basis of their race, creed or national origin.

Section 2.3  General Provisions
             ------------------

             2.3.1.  Servicer's Agreement. The Servicer agrees with the Master
Servicer to service the Mortgage Loans in accordance with the provisions of this
Agreement and, to the extent of any instructions of the Master Servicer that are
given, such instructions and, subject to the provisions hereof and without any
further instruction by the Master Servicer except as shall be expressly provided
for herein, shall have full power and authority to do all things necessary in
connection therewith.

             2.3.2.  Term of Agreement. Except as otherwise provided herein,
the duties, responsibilities and obligations to be performed and carried out by
the Servicer under this Agreement shall commence upon the execution of this
Agreement and shall continue until (a) each Mortgage Loan is (i) liquidated or
(ii) otherwise paid in full, (b) all payments related thereto are remitted in
accordance with this Agreement, and (c) all obligations hereunder related
thereto are discharged.

             2.3.3.  Amended Mortgage Loan Schedule. From time to time as
additional Mortgage Loans are transferred to be serviced hereunder by the
Servicer, Schedule A shall be amended by the Master Servicer to include the new
Mortgage Loans. Due to defects in documentation and for other reasons, certain
Mortgage Loans referred to in the Mortgage Loan Schedule may be deleted and
other Mortgage Loans may be added. The Servicer hereby agrees to any such
addition and/or deletion of any Mortgage Loans and, in the event any Mortgage
Loans are added and/or deleted from the Mortgage Loan Schedule, the Servicer
authorizes the Master Servicer to amend and attach hereto a corrected Mortgage
Loan Schedule, as Schedule A, reflecting only those Mortgage Loans that are
serviced hereunder. The Master Servicer shall provide the Servicer with the
corrected and updated Mortgage Loan Schedule.

             2.3.4.  Assignment and Replacement. The Servicer acknowledges and
agrees that in the event that the Master Servicer resigns as Master Servicer
under this Agreement, any successor master servicer has the right to assume the
Master Servicer's rights and obligations and to enforce the Servicer's
obligations under this Agreement.

             2.3.5.  Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received upon actual
receipt of registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:

                                      -18-

<PAGE>

             (a)     if to the Master Servicer:

                     Wells Fargo Bank, N.A.
                     9062 Old Annapolis Road
                     Columbia, Maryland 21045
                     Attention: Director of Master Servicing

             (b)     if to the Servicer:

                     Wells Fargo Bank, N.A.
                     7001 Westown Parkway
                     West Des Moines, Iowa 50266
                     Attention: Senior Vice President, Servicing

             (c)     if to the Custodian:

                     Wells Fargo Bank, N.A.
                     1015 10th Avenue South East
                     Minneapolis, Minnesota 55414
                     Attention: Bradley Johnson, Assistant Vice President

             (d)     if to the Trustee:

                     [Trustee]
                     [Address]
                     Attention:

Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this paragraph for the giving of notice.

             2.3.6.  Change of Accountants. During the term of this Agreement,
the Servicer shall not change, or make any substitution of, its certified public
accountants except upon written notice to the Master Servicer given 30 days
prior to such change or substitution.

                                      -19-

<PAGE>

                                    ARTICLE 3

                                REMIC Compliance

Section 3.1  General
             -------

             3.1.1.  Applicability. The provisions of this Article 3 apply to
all the Mortgage Loans or Mortgaged Property unless the Mortgage Loan has not
been transferred (or been identified for a future transfer) to an entity with
respect to which an election to be characterized as a REMIC has been (or is
expected to be) made.

             3.1.2.  Modifications of Mortgage. With the prior written consent
of the Master Servicer, the Servicer may modify the terms of a Mortgage Loan
which is in default or a Mortgage Loan as to which default is reasonably
foreseeable; provided, however, that (i) such modification may not reduce the
amount of principal owed under the related Mortgage Note or permanently reduce
the Mortgage Interest Rate for such Mortgage Loan and (ii) the Servicer and the
Master Servicer have determined that such modification is likely to increase the
proceeds of such Mortgage Loan over the amount expected to be collected pursuant
to foreclosure. Notwithstanding anything to the contrary in this Agreement, the
Servicer shall not permit any modification of any material term of a Mortgage
Loan (including the Mortgage Interest Rate, the principal balance, the
amortization schedule, or any other term affecting the amount or timing of
payments on the Mortgage Loan) where such modification is not the result of a
default or as to which default is reasonably foreseeable under the Mortgage Loan
unless the Master Servicer has consented thereto and the Servicer has received
an Opinion of Counsel or a ruling from the Internal Revenue Service (at the
expense of the Servicer or the party making the request of the Servicer to
modify the Mortgage Loan) to the effect that such modification would not be
treated as giving rise to a new debt instrument for federal income tax purposes
or a disposition of the modified Mortgage Loan and that such modification is
permitted under the REMIC Provisions.

             3.1.3.  Indemnification with Respect to Certain Taxes and Loss of
REMIC Status. In the event that the REMIC fails to qualify as a REMIC, loses
its status as a REMIC, or incurs state or local taxes, or tax as a result of a
prohibited transaction or contribution subject to taxation under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Trustee, the
Trust Administrator (if applicable), the Master Servicer and the holders of the
related Certificates against any and all losses, claims, damages, liabilities or
expenses ("REMIC Failure Losses") resulting from such negligence; provided,
however, that the Servicer shall not be liable for any such REMIC Failure Losses
attributable to the action or inaction of the Master Servicer or the holders of
such Certificates nor for any such REMIC Failure Losses resulting from
misinformation provided by the Master Servicer on which the Servicer has relied.
The foregoing shall not be deemed to limit or restrict the rights and remedies
of the other holders of the Certificates now or hereafter existing at law or in
equity.

                                      -20-

<PAGE>

Section 3.2  REO Qualification
             -----------------

             3.2.1.  Foreclosure Property. Notwithstanding any other provision
of this Agreement, the Servicer, shall not rent, lease, or otherwise earn income
on behalf of the REMIC with respect to any REO which might cause such REO to
fail to qualify as "foreclosure" property within the meaning of section
860G(a)(8) of the Code (e.g., rent based upon the earnings of the lessee) or
result in the receipt by the REMIC of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code (e.g., income attributable
to any asset which is not a qualified mortgage, a cash flow or reserve fund
investment, or personal property not incidental to the REO) or any "net income
from foreclosure property" which is subject to tax under the REMIC Provisions
unless the Master Servicer has received an Opinion of Counsel (at the Servicer's
expense) to the effect that, under the REMIC Provisions and (where appropriate,
any relevant proposed legislation) any income generated for the REMIC by the REO
would not result in the imposition of a tax upon the REMIC. In general, the
purpose of this Section 3.2 and the REMIC Provisions (which this section is
intended to implement) is to ensure that the income earned by the REMIC is
passive type income such as interest on mortgages and passive type rental income
on real property.

             3.2.2.  Foreclosure Property Qualification Restrictions. Without
limiting the generality of the foregoing, the Servicer shall not:

             (a) permit the REMIC to enter into, renew or extend any lease with
     respect to any REO, if the lease by its terms will give rise to any income
     that does not constitute Rents from Real Property;

             (b) permit any amount to be received or accrued under any lease
     other than amounts that will constitute Rents from Real Property;

             (c) authorize or permit any construction on any REO, other than the
     completion of a building or other improvement thereon, and then only if
     more than ten percent of the construction of such building or other
     improvement was completed before default on the related Mortgage Loan
     became imminent, all within the meaning of Section 856(e)(4)(B) of the
     Code; or

             (d) Directly Operate or allow any other Person to Directly Operate,
     any REO on any date more than 90 days after its acquisition date, other
     than through an "independent contractor," within the meaning of Section
     856(e) of the Code;

unless, in any such case, the Servicer has requested and received an Opinion of
Counsel (at the Servicer's expense) to the effect that such action will not
cause such REO to fail to qualify as "foreclosure property" within the meaning
of Section 860G(a)(8) of the Code at any time that it is held by the REMIC, in
which case the Servicer may take such actions as are specified in such Opinion
of Counsel.

             3.2.3.  REO Disposition. Within 30 days following an REO
Disposition, the Servicer shall provide to the Master Servicer a statement of
accounting for the related REO, including without limitation, (i) the loan
number of the related Mortgage Loan, (ii) the date such Mortgaged Property was
acquired in foreclosure or by deed in lieu of foreclosure, (iii) the date of

                                      -21-

<PAGE>

REO Disposition, (iv) the gross sales price and related selling and other
expenses, (v) accrued interest calculated from the date of acquisition to the
disposition date and (vi) such other information as the related trustee may
reasonably request.

Section 3.3  Prohibited Transactions and Activities
             --------------------------------------

             3.3.1.  Mortgage Loan Disposition Restriction. The Servicer shall
not permit the sale, disposition or substitution for any of the Mortgage Loans
(except in a disposition pursuant to (i) the foreclosure or default of a
Mortgage Loan, (ii) the bankruptcy or insolvency of the REMIC, (iii) the
termination of the REMIC in a "qualified liquidation" or "clean-up" call as
defined in Section 860F of the Code or (iv) a substitution of a Qualifying
Substitution Mortgage Loan as permitted under the REMIC Provisions), nor acquire
any assets for the REMIC, after the startup day of the REMIC, nor sell or
dispose of any investments in any of the accounts established by the Servicer
for the REMIC for gain, nor accept any contributions to the REMIC (other than
certain cash contributions permitted by Section 860G(c) of the Code) unless it
has received an Opinion of Counsel (at the expense of the Person requesting the
Servicer to take such action) to the effect that such disposition, acquisition,
substitution, or acceptance will not (a) affect adversely the status of the
REMIC as a REMIC or of the Certificates, other than the Certificates
representing the residual interest in the REMIC, as the regular interests
therein within the meaning of the REMIC Provisions, (b) affect the distribution
of interest or principal on the Certificates, (c) result in the encumbrance of
the assets transferred or assigned to the REMIC (except pursuant to the
provisions of this Agreement) or (d) cause the REMIC to be subject to a tax on
"prohibited transactions" or "prohibited contributions" pursuant to the REMIC
Provisions.

             3.3.2.  Personal Property. The Servicer shall not acquire any
personal property relating to any Mortgage Loan unless either:

             (a) such personal property is incident to real property (within the
     meaning of Section 856(e)(1) of the Code) so acquired by the Servicer; or

             (b) the Servicer shall have requested and received an Opinion of
     Counsel, at the expense of the Servicer, to the effect that the holding of
     such personal property by the REMIC will not cause the imposition of a tax
     on the REMIC under the REMIC Provisions or cause the REMIC to fail to
     qualify as a REMIC at any time that any Certificate is outstanding.

Section 3.4  Eligible Investments
             --------------------

             3.4.1.  Custodial Account. Funds in any custodial accounts
established by the Servicer and maintained in respect of the REMIC may be
invested and, if invested, shall be invested in Eligible Investments selected by
the Servicer which shall mature not later than the Business Day immediately
preceding the next Remittance Date, and any such Eligible Investment shall not
be sold or disposed of prior to its maturity. All such Eligible Investments
shall be made in the name of the REMIC or its nominee. All income and gain
realized from any such investment shall be, as long as the Servicer is servicing
the Mortgage Loans held by the REMIC, for the benefit of the Servicer as
additional compensation and shall be subject to its

                                      -22-

<PAGE>

withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments shall be deposited in the relevant account by
the Servicer out of its own funds immediately as realized. The foregoing
requirements for deposit in such account are exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments of
interest on funds in such account and, as long as the Servicer is servicing the
Mortgage Loans held by the REMIC, payments in the nature of prepayment fees,
late payment charges, assumption fees or any similar fees customarily associated
with the servicing mortgage loans paid by any mortgagor need not be deposited by
the Servicer in such account and may be retained by the Servicer as additional
servicing compensation. If the Servicer deposits in such account any amount not
required to be deposited therein, it may at any time withdraw such amount, any
provision herein to the contrary notwithstanding.

             3.4.2.  Escrow Account. Subject to the terms of the related
Mortgage Notes and Security Instrument, and further subject to applicable law,
any funds in any escrow account shall be invested in Eligible Investments that
mature prior to the date on which payments have to be made out of the related
escrow account and any such Eligible Investment shall not be sold or disposed of
prior to its maturity; provided that, if any loss is incurred on any such
investment, the Servicer shall cover such loss by making a deposit into the
appropriate escrow account out of its own funds in the amount of such loss.
Withdrawals from any escrow account may be made (to the extent amounts have been
escrowed for such purpose and to the extent permitted by the related Security
Instrument and Mortgage Note) only (i) to effect timely payment of Escrow Items
in connection with the related Mortgage Loan, (ii) to reimburse the Master
Servicer or Servicer out of related collections for advances with respect to
Escrow Items, (iii) to refund to any mortgagors any sums determined to be
overages, (iv) to pay interest, if any, owed to mortgagors on such account to
the extent required by law, (v) for application to restoration or repair of the
Mortgaged Property, (vi) to clear and terminate the escrow account on the
termination of this Agreement or (vii) to remove funds placed in such escrow
account in error. The Servicer shall be entitled to all investment income on any
escrow account not required to be paid to mortgagors pursuant to the preceding
sentence.

                                      -23-

<PAGE>

                                    ARTICLE 4

                            Servicer Considerations

Section 4.1  Servicer Eligibility Standards
             ------------------------------

             To service Mortgage Loans under this Agreement the Servicer must
satisfy the eligibility standards set forth in this Section 4.1 initially and at
all times thereafter.

             4.1.1.  Regulatory Approvals and Licensing. The Servicer must be:

             (a) FNMA or FHLMC approved and in good standing;

             (b) a HUD approved mortgagee in good standing;

             (c) in compliance with all applicable capital requirements and
     other requirements from time to time specified by any governmental agency
     or quasi-governmental authority having jurisdiction over the Servicer; and

             (d) properly licensed to service the Mortgage Loans in all relevant
     jurisdictions where such licenses are required.

             4.1.2.  Net Worth and Portfolio Requirements.

             (a) The Servicer must maintain a Tangible Net Worth of at least
     $1,000,000.

             (b) The Servicer must maintain an Adjusted Tangible Net Worth of at
     least $1,000,000.

             (c) The Servicer must maintain a servicing portfolio of at least
     $1,000,000,000.

             4.1.3.  Auditor's Opinion and Other Annual Reports. For so long as
the Mortgage Loans are master serviced by the Master Servicer, the Servicer must
provide the Master Servicer, as part of the application process (except as to
clause (c) and (d)) and annually thereafter no later than the 30/th/ day (or if
not a Business Day, the immediately preceding Business Day) preceding the latest
date in each year on which an annual report on Form 10-K may be timely filed
with the SEC (without regard to any extension), with the following reports and
opinions:

             (a) financial statements for the most recently closed fiscal year,
     together with an unqualified opinion thereon of an independent certified
     public accountant who is a member of the American Institute of Certified
     Public Accountants, unless the Master Servicer, in its reasonable
     discretion, decides to waive this requirement regarding qualification;

             (b) a statement from the independent certified public accountant
     (the "Annual Independent Public Accountant's Servicing Report") who
     prepared the above-referenced financial statements for the Servicer (i)
     certifying that, on the basis of an examination of

                                      -24-

<PAGE>

     certain documents and records relating to the mortgage loans being serviced
     by the Servicer conducted substantially in compliance with the Uniform
     Single Attestation Program for Mortgage Bankers, the servicing of such
     mortgage loans was conducted in compliance with the provisions of this
     Agreement or other similar agreements, except for (a) such exceptions as
     such firm believes to be immaterial and (b) such other exceptions as are
     set forth in such statement and (ii) including a management assertion
     letter signed by an officer of the Servicer;

             (c) a certificate signed by any Officer of the Servicer involved
     in, or responsible for, the administration and servicing of the Mortgage
     Loans (the "Annual Statement of Compliance") certifying that the Officer
     signing such certificate has supervised a review of the activities of the
     Servicer during the preceding fiscal year and of the Servicer's performance
     during the most recently closed fiscal year under this Agreement and that
     to the best of such officer's knowledge, based on such review, the Servicer
     has fulfilled its duties, responsibilities and obligations under this
     Agreement throughout such year, or, if there has been failure by the
     Servicer to fulfill any duty, responsibility or obligation under this
     Agreement, specifying the nature and status of each such failure; and

             (d) a certificate signed by an Officer of the Servicer to the
     Master Servicer for the benefit of such Master Servicer and its officers,
     directors and affiliates in the event that the Master Servicer files a
     Sarbanes-Oxley certification directly with the SEC in connection with the
     securitization of the Mortgage Loans (the "Transaction"), certifying as to
     the following matters:

                    (i)   Based on such Officer's knowledge, the information
                          relating to the Mortgage Loans and the servicing
                          thereof submitted by the Servicer to the Master
                          Servicer which is used in connection with preparation
                          of the reports on Form 8-K and the annual report on
                          Form 10-K filed with the SEC with respect to the
                          Transaction, taken as a whole, does not contain any
                          untrue statement of a material fact or omit to state a
                          material fact necessary to make the statements made,
                          in light of the circumstances under which such
                          statements were made, not misleading as of the date of
                          this certification;

                    (ii)  The servicing information required to be provided to
                          the Master Servicer by the Servicer under the
                          Agreement has been provided to the Master Servicer;

                    (iii) Such Officer is responsible for reviewing the
                          activities performed by the Servicer under the
                          Agreement and based upon the review required by the
                          Agreement, and except as disclosed in the Annual
                          Statement of Compliance, the Annual Independent Public
                          Accountant's Servicing Report and all servicing
                          reports, officer's certificates and other information
                          relating to the servicing of the Mortgage Loan
                          submitted to the Master Servicer, the Servicer has,

                                      -25-

<PAGE>

                          as of the date of the certification fulfilled its
                          obligations under the Agreement; and

                    (iv)  Such Officer has disclosed to the Master Servicer all
                          significant deficiencies relating to the Servicer's
                          compliance with the minimum servicing standards in
                          accordance with a review conducted in compliance with
                          the Uniform Single Attestation Program for Mortgage
                          Bankers or similar standard as set forth in the
                          Agreement.

             The foregoing certification shall also be given upon thirty (30)
days written request by the Master Servicer in connection with any additional
Sarbanes-Oxley certifications directly filed by the Master Servicer involving
the Mortgage Loans.

             The Servicer shall indemnify and hold harmless the Master Servicer
and its officers, directors, agents and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 4.1.3 or the negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Master
Servicer, then the Servicer agrees that it shall contribute to the amount paid
or payable by the Master Servicer as a result of the losses, claims, damages or
liabilities of the Master Servicer in such proportion as is appropriate to
reflect the relative fault of the Master Servicer on the one hand and the
Servicer on the other in connection with a breach of the Servicer's obligations
under this Section 4.1.3 or the Servicer's negligence, bad faith or willful
misconduct in connection therewith.

             4.1.4.  Servicing Experience. The Servicer shall satisfactorily
demonstrate to the Master Servicer, in the Master Servicer's reasonable
discretion, the following experience:

             (a) that it has at least three (3) years of conventional mortgage
     loan servicing experience;

             (b) that it has a staff knowledgeable in servicing of Mortgage
     Loans and the administration of REO; and

             (c) that it has experience maintaining a servicing portfolio in
     excess of $1 billion.

             4.1.5.  Material Changes. The Servicer shall promptly report to the
Master Servicer any change in its business operations, financial condition,
properties or assets since the date of the latest submitted financial statements
which could have a material adverse effect on the Servicer's ability to perform
its obligations hereunder. Events for which the Master Servicer must receive
notice include, but are not limited to, the following:

             (a) any change in the Servicer's business address and/or telephone
     number;

             (b) any merger, consolidation, or significant reorganization;

                                      -26-

<PAGE>

             (c) any changes in the Servicer's ownership whether by direct or
     indirect means. Indirect means include any change in ownership of the
     Servicer's parent;

             (d) any change in the Servicer's corporate name;

             (e) if the Servicer is a savings and loan association, any change
     in the Servicer's charter from federal to state or vice versa;

             (f) any decreases in capital, adverse alteration of debt/equity
     ratios, or changes in management ordered or required by a regulatory
     authority supervising or licensing the Servicer;

             (g) any significant adverse change in the Servicer's financial
     position;

             (h) entry of any court judgment or regulatory order in which the
     Servicer is or may be required to pay a claim or claims which, in the
     Master Servicer's reasonable opinion, have a material adverse effect on the
     Servicer's financial condition; and

             (i) the Servicer admits to committing, or is found to have
     committed, a material, in the Master Servicer's reasonable opinion,
     violation of any law, regulation, or order.

Section 4.2  Errors and Omissions Insurance
             ------------------------------

             4.2.1.  E & O Requirement. A Servicer must maintain, at all times
and at its own expense, an Errors and Omissions Policy in an amount and with an
insurer acceptable to FNMA or FHLMC.

             4.2.2.  E & O Scope. The Errors and Omissions Policy must
explicitly insure the Servicer, its successors and assigns, against any losses
resulting from negligence, errors or omissions on the part of officers,
employees or other persons acting on behalf of the Servicer in the performance
of its duties as a Servicer pursuant to this Agreement.

             4.2.3.  E & O Policy Maintenance. The Servicer must maintain in
effect the Errors and Omissions Policy at all times and the Errors and Omissions
Policy may not be canceled, permitted to lapse or otherwise terminated without
thirty Business Days' prior written notice by registered mail to the Master
Servicer. Further, the Errors and Omissions Policy must provide that, or the
insurer must state in writing to the Master Servicer that, the Errors and
Omissions Policy shall not be cancelable without the giving of notice as
provided for in the prior sentence.

             4.2.4.  E & O Deductible. The terms of the Errors and Omissions
Policy must provide for a deductible amount that is acceptable to FNMA or FHLMC.

             4.2.5.  E & O Qualifications. The Errors and Omissions Policy must
be obtained by the Servicer from an insurer which satisfies FNMA or FHLMC
standards in this regard.

                                      -27-

<PAGE>

             4.2.6.  Notice of Claim. The Servicer must immediately report to
the Master Servicer all claims made against the insurer under the Errors and
Omissions Policy, and shall promptly follow such report with a written notice to
the Master Servicer.

Section 4.3  Fidelity Bond Coverage
             ----------------------

             4.3.1.  Fidelity Bond Requirement. A Servicer must maintain, at all
times, at its own expense, a Fidelity Bond in an amount and with an insurer
acceptable to FNMA or FHLMC and having terms that are acceptable to FNMA or
FHLMC.

             4.3.2.  Fidelity Bond Coverage. The amount of Fidelity Bond
coverage shall be an amount acceptable to FNMA or FHLMC.

             4.3.3.  Fidelity Bond Scope. The coverage of the Fidelity Bond
must explicitly insure the Servicer, its successors and assigns, against any
losses resulting from dishonest, fraudulent or criminal acts on the part of
Officers, employees or other persons acting on behalf of the Servicer.

             4.3.4.  Fidelity Bond Maintenance. The Servicer must maintain in
effect the Fidelity Bond at all times and the Fidelity Bond may not be canceled,
permitted to lapse or otherwise terminated without thirty Business Days' prior
written notice by registered mail to the Master Servicer. Further, the Fidelity
Bond must provide that, or the insurer must state in writing to the Master
Servicer that, the Fidelity Bond shall not be cancelable without the giving of
notice as provided for in the prior sentence.

             4.3.5.  Fidelity Bond Deductible. The terms of the Fidelity Bond
must provide for a deductible amount that does not exceed FNMA or FHLMC
requirements.

             4.3.6.  Fidelity Bond Rating Requirement. The Fidelity Bond must
be obtained from a company which satisfies FNMA or FHLMC standards in this
regard.

             4.3.7.  Notice of Event. The Servicer must promptly report to the
Master Servicer any and all occurrences against the Fidelity Bond of the
Servicer.

Section 4.4  Servicer's Liability
             --------------------

             4.4.1.  Liability Exposure. Any and all losses not covered under
the Fidelity Bond or Errors and Omissions Policy, as a result of (i) the
respective deductible provisions thereof, (ii) the limits of coverage of the
Fidelity Bond or Errors and Omissions Policy or (iii) any claim denied which
should have been covered by the Fidelity Bond or the Errors and Omissions
Policy, as the case may be, according to the terms of this Agreement had the
Fidelity Bond or Errors and Omissions Policy been properly obtained and
maintained and respective claim been properly submitted for payment, shall be
borne by the Servicer, where the Servicer has acted in a manner in which the
Servicer is not relieved from liability as described in Section 4.4.2 hereof.

             4.4.2.  Scope of Liability. Neither the Servicer or any
subservicer appointed by it, nor any of their respective partners, directors,
officers, employees or agents, or its delegees pursuant to Section 11.2.1
hereof, shall be under any liability to the Master Servicer, the Trustee

                                      -28-

<PAGE>

or, if applicable, the Trust Administrator for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer, any subservicer or any of their respective
partners, directors, officers, employees or agents, or its delegees pursuant to
Section 11.2.1 hereof, against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of his or its duties or by reason of reckless disregard of his or its
obligations and duties hereunder. The Servicer, any subservicer and any of their
respective partners, directors, officers, employees or agents, or its delegees
pursuant to Section 11.2.1 hereof, 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.

Section 4.5  Indemnification
             ---------------

             4.5.1.  Scope of Indemnity. The Servicer hereby agrees to indemnify
and hold harmless (a) the Master Servicer, (b) the Trustee, (c) the Trust
Administrator (if applicable) and (d) the officers, directors, employees, agents
and Affiliates of any of the foregoing (any of the foregoing hereinafter
referred to as the "Indemnified Party"), from and against any and all claims,
losses, damages, liabilities, fines, settlements, awards, offsets, defenses,
counterclaims, actions, penalties, forfeitures, legal fees, judgments and any
other costs, fees and expenses (including, without limitation, reasonable
attorneys' fees and court costs) (any of the foregoing which satisfy the
criteria of this paragraph are collectively referred to as "Claims"), either
directly or indirectly arising out of, based upon, or relating to (i) a breach
by the Servicer, its officers, directors, employees, or agents, or its delegees
pursuant to Section 11.2.1 hereof, of any representation or warranty contained
herein, or any failure to disclose any matter that makes such representation and
warranty misleading or inaccurate, or any inaccuracy in material information
furnished by the Servicer regarding itself, (ii) a breach of any representation
or warranty made by any Indemnified Party in reliance upon any such
representation or warranty, failure to disclose, or inaccuracy in information
furnished by the Servicer regarding itself, (iii) any failure of the Servicer,
its officers, directors, employees, or agents, or its delegees pursuant to
Section 11.2.1 hereof, to perform any of its obligations under this Agreement in
a manner in which the Servicer is not relieved from liability as described in
Section 4.4.2 hereof and (iv) any acts or omissions of the Servicer, its
officers, directors, employees, or agents, or its delegees pursuant to Section
11.2.1 hereof, in a manner in which the Servicer is not relieved from liability
as described in Section 4.4.2 hereof. Each Indemnified Party shall cooperate
with the Servicer in the defense of such Claims and shall not settle any such
Claim without the prior written consent of the Servicer.

             4.5.2.  Survival of Indemnity. This indemnification shall survive
purchase, transfer of any interest in a Mortgage Loan by any indemnified party,
the Liquidation of such Mortgage Loan, termination of the Servicer's servicing
rights with respect to such Mortgage Loan and termination or expiration of this
Agreement between the Servicer and the Master Servicer and its successors and
assigns.

Section 4.6  Servicer's Compensation
             -----------------------

             4.6.1.  Servicing Fee Amount. In consideration of the services
rendered under this Agreement, absent default by the Servicer, the Servicer
shall on each Remittance Date be entitled to a monthly aggregate servicing
compensation (the "Monthly Servicing Compensation")

                                      -29-

<PAGE>

for the preceding month which shall equal the sum of (a) the Servicing Fee
payable with respect to each Mortgage Loan serviced during such month and (b)
any interest earnings on each Custodial P&I Account with respect to such month
other than interest earnings thereon which are payable to the Borrower pursuant
to the Security Instrument or applicable law, subject to any adjustment for
Month End Interest as described in Section 7.6.1. Absent default by the
Servicer, the Servicer shall also be entitled to retain in addition to the
Monthly Servicing Compensation any late charges, prepayment fees, penalty
interest, assumption fees, modification fees or deficiency recovery fees paid by
the Borrower, any Liquidation Profits or any other customary income or any
payments of interest related to any Prepayment in Full received by the Servicer
prior to the Applicable Unscheduled Receipt Period, which amounts are not
required to be deposited into the Custodial P&I Account. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for herein.

             4.6.2.  Servicing Fee Source. The Servicing Fee for each Mortgage
Loan shall be payable solely from the interest portion of the related Monthly
Payment paid by the Borrower or other payment of interest paid with respect to
the Mortgage Loan, whether from the proceeds of foreclosure or any judgment,
writ of attachment or levy against the Borrower or his assets, or from funds
paid in connection with any prepayment in full or from Insurance Proceeds or
Liquidation Proceeds.

                                      -30-

<PAGE>

                                    ARTICLE 5

                         Representations And Warranties

Section 5.1  General
             -------

             5.1.1.  Reliance. The Master Servicer relies upon the
representations and warranties contained in this Article 5 hereof, in the
acceptance of the Servicer. The representations and warranties contained herein
shall inure to the benefit of the Master Servicer, the Trustee and, if
applicable, the Trust Administrator.

             5.1.2.  Survival of Representations and Warranties. The
representations and warranties made herein shall survive termination of this
Agreement, and shall inure to the benefit of the Master Servicer, its respective
successors, Affiliates and assigns and each indemnified party under Section
4.5.1, its respective successors, Affiliates and assigns, in each case,
regardless of any review or investigation made by or on behalf of such parties
with respect to any Mortgage Loan.

             5.1.3.  Breach of Representation or Warranty. Upon breach of any
requirement or representation or warranty included in this Agreement relative to
any Mortgage Loan, the Servicer must:

             (a) Promptly notify the Master Servicer in writing of the nature of
     the breach, the date on which the breach occurred or began and the
     Servicer's plans, if any, for curing the breach;

             (b) Effect a cure of the breach within 30 days after its occurrence
     or onset and a reasonable extension will be granted if warranted and
     necessary to fully cure the breach but in no event greater than 90 days;
     and

             (c) If no complete cure has been effected within such period in the
     Master Servicer's reasonable discretion, purchase any Mortgage Loan in
     which the Trustee's interest has been impaired or which, in the reasonable
     opinion of the Master Servicer, has suffered a material impairment of
     Value; provided that purchase shall be within five days after receipt by
     the Servicer of written notice from the Master Servicer requesting the
     Servicer's purchase of the Mortgage Loan at the Purchase Price.

             5.1.4.  Assignment of Representations and Warranties. The Servicer
agrees that each of the Trustee and, if applicable, Trust Administrator may, at
any time, assign the representations and warranties given by the Servicer as set
forth in this Article 5 which it then possesses, in whole or in part, or an
undivided interest therein, to one or more Persons.

                                      -31-

<PAGE>

Section 5.2  Servicer Representations and Warranties
             ---------------------------------------

             The Servicer represents and warrants, as of the date of this
Agreement and, except as otherwise provided, throughout the term of this
Agreement, that the statements set forth below in this Section 5.2 are true and
accurate.

Relative to the Servicer:
------------------------

             5.2.1.  Qualification of Servicer. The Servicer is duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation and is duly qualified to do business and is in good
standing under the laws of each jurisdiction that requires such qualification
wherein it owns or leases any material properties, or in which it conducts any
material business or in which the performance of its duties under this Agreement
would require such qualification, except where the failure to so qualify would
not have a material adverse effect on (a) the Servicer's performance of its
obligations under this Agreement, (b) the value or marketability of the Mortgage
Loans, or (c) the ability to foreclose on the related Mortgaged Properties.

             5.2.2.  Requisite. The Servicer has the corporate power and
authority to own its properties and conduct any and all business required or
contemplated by this Agreement and to perform the covenants and obligations to
be performed by it under this Agreement. The Servicer holds all material
licenses, certificates and permits from all governmental authorities necessary
for conducting its business as it is presently conducted.

             5.2.3.  No Conflicts. The execution and delivery of this Agreement
are within the corporate power of the Servicer and have been duly authorized by
all necessary actions on the part of the Servicer; neither the execution and
delivery of this Agreement by the Servicer, nor the consummation by the Servicer
of the transactions herein contemplated, nor compliance with the provisions
hereof by the Servicer, will (i) conflict with or result in a breach of, or
constitute a default under, any of the provisions of the articles of
incorporation or bylaws of the Servicer or any law, governmental rule or
regulation, or any judgment, decree or order binding on the Servicer or any of
its properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which it is a party or by which it is
bound or (ii) result in the creation or imposition of any lien, charge or
encumbrance upon any of its properties pursuant to the terms of any such
indenture, mortgage, deed of trust, contract or other instrument.

             5.2.4.  Enforceable Agreement. This Agreement, when duly executed
and delivered by the Servicer, will constitute a legal, valid and binding
agreement of the Servicer, enforceable in accordance with its terms, subject, as
to enforcement or remedies, to applicable bankruptcy, reorganization, insolvency
or other similar laws affecting creditors' rights generally from time to time in
effect, and to general principles of equity.

             5.2.5.  No Consents. No consent, approval, order or authorization
of any governmental authority or registration, qualification or declaration with
any such authority is required in order for the Servicer to perform its
obligations under this Agreement.

             5.2.6.  Agency Approval. The Servicer has been approved by FNMA or
FHLMC and will remain approved as an "eligible seller/servicer" of conventional,
residential mortgage

                                      -32-

<PAGE>

loans as provided in FNMA or FHLMC guidelines and in good standing. The Servicer
has not received any notification from FNMA or FHLMC that the Servicer is not in
compliance with the requirements of the approved seller/servicer status or that
such agencies have threatened the servicer with revocation of its approved
seller/servicer status.

             5.2.7.  Financial Condition. The Servicer is not, and, with passage
of time, does not expect to become, insolvent or bankrupt. The Servicer shall
promptly notify the Master Servicer of any material adverse change of its
financial condition.

             5.2.8.  Servicing. The servicing practices used by the Servicer
under this Agreement have been and are in all respects in compliance with all
federal, state and local laws, rules, regulations and requirements in connection
therewith and are in accordance with Prudent Servicing Practices.

             5.2.9.  No Impairment. There is no action, suit, proceeding or
investigation pending or, to the best of the Servicer's knowledge after due
inquiry, threatened, against the Servicer which, either in any one instance or
in the aggregate, may result in any material adverse change in business
operations, financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or in any material liability on the
part of the Servicer, or which if adversely determined would affect the validity
of this Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer to perform under the terms of this
Agreement.

             5.2.10. No Inquiries. The Servicer has not been the subject of an
audit by any of the Master Servicer, FHA, HUD, FDIC, FNMA, FHLMC, GNMA or any
Primary Mortgage Insurer, which audit included material allegations of failure
to comply with applicable loan origination, servicing or claims procedures, or
resulted in a request for repurchase of Mortgage Loans or indemnification in
connection with the Mortgage Loans.

Relative to the Mortgage Loans:
------------------------------

             5.2.11. Custodial and Escrow Accounts Current. All Custodial P&I
Accounts, Custodial T&I Accounts, Custodial Buydown Accounts and Escrow Funds
are maintained by the Servicer and have been maintained in accordance with
applicable law and the terms of the Mortgage Loans. The Escrow Items required by
the Mortgages which have been paid to the Servicer for the account of the
Borrower are on deposit in the appropriate Custodial Account. All funds received
by the Servicer in connection with the Mortgage Loans, including, without
limitation, foreclosure proceeds, Insurance Proceeds, condemnation proceeds and
principal reductions, have promptly been deposited in the appropriate Custodial
Account, and all such funds have been applied to reduce the principal balance of
the Mortgage Loans in question, or for reimbursement of repairs to the Mortgaged
Property or as otherwise required by applicable law.

             5.2.12. Insurance Maintenance. Pursuant to the terms of the related
Security Instrument, all buildings or other improvements upon the related
Mortgaged Property are insured by an insurance policy or policies meeting the
requirements of Articles 15 and 16 hereof. The

                                      -33-

<PAGE>

related Security Instrument obligates the Borrower thereunder to maintain the
hazard insurance policy at the Borrower's cost and expense and, upon the
Borrower's failure to do so, authorizes the Mortgagee under the related Security
Instrument to obtain and maintain such insurance at the Borrower's cost and
expense and to seek reimbursement therefor from the Borrower. The hazard
insurance policy is the valid and binding obligation of the insurer, is in full
force and effect, and will be in full force and effect and inure to the benefit
of the Trustee. The Servicer and the Borrower have not engaged in any act or
omission that would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of either.
The Mortgage Loan Documents permit the maintenance of an escrow account to pay
the premiums for the above mentioned insurance, and the requirement for such
escrows has not been waived, unless otherwise required by applicable state law.


                                      -34-

<PAGE>

                                    ARTICLE 6

                              Custodial Accounting

Section 6.1  In General
             ----------

             6.1.1.  Custodial Account Establishment. The Servicer must
establish appropriate custodial accounts for the benefit of the Trustee, its
successors and assigns for the deposit of funds collected in connection with
such Mortgage Loans. All custodial accounts and related records must be
maintained in accordance with sound and controlled accounting practices. The
custodial accounts maintained pursuant to this Agreement may be custodial
accounts for one or more other series of mortgage pass-through certificates
issued by Wells Fargo Asset Securities Corporation; provided, however, that (a)
the trustee for such other series under the related pooling and servicing
agreement(s) is the Trustee and (b) the master servicer for such other series
under the related pooling and servicing agreement(s) is the Master Servicer.

             6.1.2.  Custodial Account Separateness. (a) At least one custodial
account for principal and interest (i.e., a Custodial P&I Account), one
custodial account for taxes and insurance (i.e., a Custodial T&I Account), one
custodial account for Subsidy Funds, if applicable (i.e., a Custodial Subsidy
Account) and one custodial account for Buydown Funds, if applicable (i.e., a
Custodial Buydown Account), shall be established and maintained for the Mortgage
Loans. Except as specified in 6.1.2(b), without the written consent of the
Master Servicer, funds in these accounts may not be commingled with other funds
held by the Servicer. Each Custodial P&I Account shall be established as an
Eligible Account ("Eligible Custodial P&I Account").

             (b) Notwithstanding anything to the contrary elsewhere in this
     Agreement, the Servicer may employ the Custodial T&I Account as the
     Custodial Subsidy Account and/or the Custodial Buydown Account to the
     extent that the Servicer can separately identify any Subsidy Funds or
     Buydown Funds, as applicable, deposited therein.

             6.1.3.  Custodial Account Maintenance. The Servicer must ensure
that each Custodial P&I Account, Custodial T&I Account, Custodial Subsidy
Account and Custodial Buydown Account meets the following guidelines:

             (a) the accounts must be Eligible Accounts;

             (b) the name of each Custodial P&I Account, Custodial T&I Account
     and Custodial Buydown Account shall include a reference to the name of the
     Trustee and the designation of the series of Mortgage Pass-Through
     Certificates or, where such accounts are accounts maintained for multiple
     series of mortgage pass-through certificates as described in Section 6.1.1,
     a reference to "Wachovia Bank, National Association, as trustee for Wells
     Fargo Asset Securities Corporation, Mortgage Pass-Through Certificates;"

             (c) the Servicer must transfer all funds on hand relating to such
     Mortgage Loans, Monthly Payments due on or after the related Cut-Off Date
     and any principal

                                      -35-

<PAGE>

     prepayments received after the related Cut-Off Date, into the appropriate
     custodial accounts meeting the requirements of Sections 6.1.1 and 6.1.2
     hereof;

             (d) beginning with any payment due on or after the related Cut-Off
     Date, all collections on the Mortgage Loans must be credited to the
     appropriate custodial account no later than the first Business Day
     following receipt;

             (e) (i) the Servicer shall not permit the balance of any Custodial
     P&I Account to exceed the Threshold Amount or include any amounts then
     required to be remitted to the Certificate Account pursuant to Section
     18.3.1, (ii) in the event the Servicer collects amounts in excess of the
     Threshold Amount prior to the next scheduled transfer of funds to the
     respective Certificate Account, the Servicer must transfer the excess funds
     directly to the related Certificate Account by wire before the close of
     business on any day on which the amount on deposit in such account exceeds
     the Threshold Amount and (iii) in the event that the Servicer fails to
     transfer the funds in excess of the Threshold Amount to the related
     Certificate Account or to remit to the Certificate Account the Monthly
     Remittance on the Remittance Date pursuant to Section 18.3.1, the Master
     Servicer is authorized to debit such Custodial P&I Account and transfer
     such amounts to the related Certificate Account;

             (f) (i) the Servicer must file with the Master Servicer the
     appropriate ACH Debit Form for each Custodial P&I Account; (ii) the Master
     Servicer may monitor the principal balance of each Custodial P&I Account
     and may issue an ACH debit for amounts on deposit in any such account in
     excess of the Threshold Amount or otherwise in violation of Section
     6.1.3(e); (iii) such amounts will immediately be deposited into the
     appropriate Certificate Account; and (iv) the ability of the Master
     Servicer to withdraw and remit such funds to the appropriate Certificate
     Account does not relieve the Servicer of its obligations to remit such
     funds to the related Certificate Account;

             (g) upon the establishment of a Custodial P&I Account, Custodial
     T&I Account or Custodial Buydown Account, the Servicer shall promptly
     advise the Master Servicer in writing of, or of any change in, the name and
     address of the depository, the individual employee of the depository who is
     responsible for overseeing such account, the account number, the title of
     the account and the individuals whose names appear on the signature card;
     and

             (h) (i) establishment and maintenance of the Custodial P&I Account,
     Custodial T&I Account and Custodial Buydown Account will be an expense of
     the Servicer; (ii) such custodial accounts may be interest-bearing accounts
     provided that such accounts comply with all local, state and federal laws
     and regulations governing interest-bearing accounts and, in the case of a
     Custodial T&I Account or Custodial Buydown Account, governing Borrower
     escrow accounts; and (iii) the Servicer must ensure that all interest
     credited to any custodial account that is not due the Borrower is removed
     by the Servicer within 30 days after receipt of such interest.

             6.1.4.  Escrow Investment. If the Servicer elects or is required by
law to deposit the Borrower's Escrow Funds into an interest-bearing custodial
account, the Servicer shall either

                                      -36-

<PAGE>

(a) deposit such funds into an account which permits withdrawal on demand so as
to pay Escrow Items as they come due, or (b) invest such funds in an Eligible
Account so that adequate funds mature the Business Day prior to the date payment
is due for each Escrow Item.

             6.1.5.  Clearing Account. If the Servicer finds it necessary to use
a clearing account, the following guidelines must be followed:

             (a) the titles of such accounts must reflect that they are
     custodial in nature, and the depository in which the accounts are
     maintained must be informed in writing that the accounts are custodial
     accounts;

             (b) a check drawn on or funds transferred from a Custodial P&I
     Account or Custodial T&I Account must be deposited to a disbursement
     clearing account before or at the same time as any checks on the clearing
     account are issued;

             (c) a single clearing account must not be utilized both as a
     collection and disbursement clearing account;

             (d) the accounts must be held at depository institutions in which
     accounts are insured by the FDIC, through either the BIF or SAIF;

             (e) the Servicer must maintain adequate records and audit trails to
     support all debits and credits of each Borrower's payment records and
     accounts; and

             (f) collections deposited to a depository clearing account must be
     credited to the appropriate custodial account no later than one Business
     Day following receipt by the Servicer.

             6.1.6.  Custodial Buydown Account. The Servicer must establish a
separate custodial account to hold Buydown Funds on Mortgage Loans being
serviced for the Trustee, its successors and assigns. These accounts must be
clearly marked to indicate that the Servicer is a custodian for Buydown Funds
being held for the Trustee, its successors and assigns.

             6.1.7.  Certificate Account. The Master Servicer shall establish a
segregated Certificate Account in accordance with Section 3.01 of the Pooling
and Servicing Agreement.

             6.1.8.  Custodial Subsidy Account. The Servicer must establish a
separate custodial account to hold Subsidy Funds on Mortgage Loans being
serviced for the Trustee, its successors and assigns. These accounts must be
clearly marked to indicate that the Servicer is a custodian for Subsidy Funds
being held for the Trustee, its successors and assigns.

Section 6.2  Custodial P&I Account
             ---------------------

             6.2.1.  Mandatory Deposits. The following funds must be deposited
into each related Custodial P&I Account within one Business Day after the
Servicer's receipt of such amounts, or in the case of clauses (d) and (e)
hereof, on the Remittance Date or, in the case of clause (g) hereof, on the
Business Day after the Servicer's receipt of the Borrower's required monthly
payment under the related subsidy agreement:

                                      -37-

<PAGE>

             (a) Principal collections from related Mortgage Loans (including
     Prepayments in Full and Curtailments), together with Month End Interest, if
     applicable;

             (b) Interest collections from related Mortgage Loans (net of
     Servicing Fees or other compensation of the Servicer as set forth in
     Section 4.6.1);

             (c) Liquidation Proceeds and Insurance Proceeds from related
     Mortgage Loans other than proceeds held in an escrow account and applied to
     the restoration and repair of the related Mortgaged Property;

             (d) related P&I Advances;

             (e) any related PMI Advances;

             (f) the proceeds of any purchase, or substitution under a purchase
     agreement, of a related Mortgage Loan by the Servicer or a Representing
     Party, or sale of an REO;

             (g) an amount from the Custodial Subsidy Account that when added to
     the Borrower's payment will equal the full monthly amount due under the
     related Mortgage Note; and

             (h) any amounts received pursuant to Section 15.7.

             6.2.2.  Optional Deposits. The following funds may, but are not
required to, be deposited into each related Custodial P&I Account:

             (a) late charges;

             (b) prepayment fees;

             (c) penalty interest;

             (d) assumption fees;

             (e) Liquidation Profits; and

             (f) unapplied funds if the Borrower that remitted such funds
is not required to maintain Escrow Funds.

The Servicer shall maintain separate accounting for each of the foregoing types
of funds. Provided that the Servicer is not in default of its obligations
hereunder, the Servicer may retain any late charges, prepayment fees, penalty
interest, assumption fees and Liquidation Profits as additional servicing
compensation.

             6.2.3.  Permissible Withdrawals. The Servicer may make withdrawals
from each related Custodial P&I Account solely for the following:

             (a) remittances to the related Certificate Account;

                                      -38-

<PAGE>

             (b) reimbursement to itself for advances which have been recovered
     by subsequent collections including late payments, Liquidation Proceeds or
     Insurance Proceeds, to the extent funds on deposit recovered by such
     subsequent collections relate to the Mortgage Loans as to which such
     advances were made;

             (c) interest earnings on deposits to the related Custodial P&I
     Account, but only to the extent that such interest has been credited;

             (d) removal of amounts deposited in error;

             (e) removal of charges or other such amounts deposited on a
     temporary basis in the account;

             (f) removal of Servicing Fees to the extent deposited therein; and

             (g) termination of the account.

             6.2.4.  Account Beneficiary. Each Custodial P&I Account (other than
any Eligible Custodial P&I Account) must be titled to show the respective
interests of the Servicer as trustee and of the Master Servicer as beneficiary.

             6.2.5.  Use of Accounts. The Servicer shall not use the Custodial
P&I Account as a collection clearing account.

Section 6.3  Custodial T&I Account
             ---------------------

             6.3.1.  Mandatory Deposits. The following funds must be deposited
into each respective Custodial T&I Account:

             (a) related Borrowers' Escrow Funds;

             (b) related T&I Advances;

             (c) the remaining balance of Title Insurance loss drafts;

             (d) rent receipts to offset any related T&I Advances by the
     Servicer;

             (e) unapplied funds; and

             (f) Liquidation Proceeds from a related Mortgage Loan that offset a
     deficit balance in the related Borrower's Escrow Funds.

             6.3.2.  Permissible Withdrawals. With respect to each related
Borrower, the Servicer may make withdrawals from each respective Custodial T&I
Account to the extent of the balance of such related Borrower's Escrow Funds for
the following:

             (a) timely payment of such related Borrower's taxes and insurance
     premiums;

                                      -39-

<PAGE>

             (b) refunds to such related Borrower of excess Escrow Funds
     collected from such Borrower;

             (c) recovering T&I Advances made with respect to such related
     Borrower by the Servicer;

             (d) payment of interest, if required, to such related Borrower on
     his Escrow Funds;

             (e) removal of any deposits made in error; and

             (f) termination of the account.

             6.3.3.  Account Requirements. Each Custodial T&I Account is to be
designated in the name of the Servicer acting as an agent for the individual
related Borrowers to make such Escrow Item payments in order to show that the
account is custodial in nature. The Servicer is required to keep records
identifying each Borrower's payment deposited into the account.

             6.3.4.  Account Balance. The Servicer must never allow any
Custodial T&I Account to become overdrawn as to any individual related Borrower.
If there are insufficient funds in the account, the Servicer must advance its
own funds to cure the overdraft.

Section 6.4  Eligible Account Investments
             ----------------------------

             6.4.1.  Eligible Investments Permitted. Unless prevented or
restricted by written notice of the Master Servicer pursuant to Section 6.4.5
hereof, the Servicer may, from time to time, withdraw funds from a Custodial P&I
Account, Custodial Subsidy Account or Custodial Buydown Account, and immediately
invest such funds in Eligible Investments in accordance with this Agreement.
Upon the maturity of such Eligible Investments, such funds shall be redeposited
into the Eligible Account from which they were drawn or into the Certificate
Account.

             6.4.2.  Eligible Investment Restrictions. No Eligible Investment
shall be sold or disposed of at a gain prior to maturity unless the Servicer has
obtained the consent of the Master Servicer.

             6.4.3.  Eligible Investment Income. All income (other than any gain
from a sale or disposition of the type referred to in Section 6.4.2 hereof)
realized from any such Eligible Investment shall be for the benefit of the
Servicer as additional servicing compensation.

             6.4.4.  Eligible Investment Losses. The amount of any losses
incurred in respect of any investments permitted under this Section 6.4 shall be
deposited in the Certificate Account by the Servicer out of its own funds
immediately as realized. The Master Servicer may, in its reasonable discretion,
from time to time, require the Servicer to provide a reasonable amount of
security to cover the risk of such investment losses. To the extent that the
Servicer shall not immediately deposit the amount of such losses in the
Certificate Account, the Master Servicer may immediately act against such
security as well as pursue all other remedies permitted by law.

                                      -40-

<PAGE>

             6.4.5.  Eligible Investments Reports. The Servicer shall, at any
time provide such information and reports regarding its Eligible Investments
under this Agreement as the Master Servicer may request.

             6.4.6.  Inter-Company Uses of Funds. Notwithstanding anything
herein to the contrary, and subject to the proviso set forth below, the Servicer
is permitted to withdraw funds from a Custodial P & I Account and commingle such
funds with the general assets of the Servicer to be used for general corporate
purposes until such time as such funds are required to be remitted to the
related Certificate Account; provided, however, that the provisions of this
Section 6.4.6 shall be applicable only for so long as (i) a master guarantee
substantially in the form of Exhibit A attached hereto has been issued by Wells
Fargo & Company for the benefit of the certificateholders of the Mortgage
Pass-Through Certificates and is currently in force and (ii) the short-term debt
or long-term debt of Wells Fargo & Company is rated by each of the Rating
Agencies in its highest short-term or highest long-term rating category or in
such lower rating category as would not result in a downgrading or withdrawing
of the rating then assigned to any of the Mortgage Pass-Through Certificates by
either Rating Agency or result in any of such rated Mortgage Pass-Through
Certificates being placed on credit review status by either Rating Agency.

                                      -41-

<PAGE>

                                    ARTICLE 7

                            Mortgage Loan Accounting

Section 7.1  In General
             ----------

             7.1.1.  Mortgage Loan Accounting Practices. The Servicer shall
administer the application and accounting of payments made on the Mortgage Loans
in accordance with the provisions of this Agreement.

             7.1.2.  Record Keeping. The Servicer must maintain complete and
accurate records of all transactions affecting any Mortgage Loan. Each Mortgage
Loan must be clearly marked to indicate that it is being serviced for the
Trustee, its successors and assigns.

             7.1.3.  Record Review. The Master Servicer and its designee have
the right to:

             (a) conduct reviews and audits of the Servicer's records and
     operating procedures during any Business Day; and

             (b) examine the Servicer's financial records, the Borrowers' Escrow
     Funds records and any and all other relevant documents and materials,
     whether held by the Servicer or by another on behalf of the Servicer, to
     ensure compliance with terms and conditions of this Agreement and the
     Master Servicer's standards.

Section 7.2  Mortgage Loan Records
             ---------------------

             7.2.1.  Account Records. Permanent Mortgage Loan account records
must be maintained by the Servicer for each Mortgage Loan. Each account record
must be identifiable by the Servicer Loan Number.

             7.2.2.  Account Record Information. The Servicer shall maintain the
following information for each Mortgage Loan in a readily accessible form:

             (a) the Master Servicer Loan Number;

             (b) the current Unpaid Principal Balance;

             (c) the date of receipt, amount of payment and distribution of such
     payment for each Monthly Payment received with respect to such Mortgage
     Loan as to each related Due Date;

             (d) for ARM Loans, the current Mortgage Interest Rate, all
     limitations contained in the Mortgage Note with respect to periodic
     adjustments in the Mortgage Interest Rate, the scheduled Interest
     Adjustment Dates, Payment Adjustment Dates, the Gross Margin and the Index;

                                      -42-

<PAGE>

             (e) other transactions affecting the amounts due from or payable to
     the related Borrower;

             (f) the current outstanding balances of principal and interest
     deposits, advances, taxes and insurance deposits and unapplied payments
     with respect to such Mortgage Loan;

             (g) any overdraft of the Borrower's Escrow Funds;

             (h) any servicing reports or loan histories; and

             (i) any other information customarily maintained by a mortgage loan
     servicer of one to four family residential mortgages.

             7.2.3.  Accounting Practice. Except as otherwise provided herein,
all Mortgage Loan account records must be maintained according to (a) the
Uniform Single Attestation Program for Mortgage Bankers and (b) where
applicable, sound and generally accepted accounting practices.

             7.2.4.  Access to Certain Documentation and Information Regarding
the Mortgage Loans. At the request of the Master Servicer, the Servicer shall
provide to the Master Servicer, the Office of Thrift Supervision, the FDIC and
the supervisory agents and examiners of the Office of Thrift Supervision and the
examiners of the FDIC, as appropriate, access to the documentation regarding the
Mortgage Loans required by applicable regulations of the Office of Thrift
Supervision or the FDIC, such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it. The Servicer shall permit such representatives to
photocopy any such documentation and shall provide equipment for that purpose at
a charge reasonably approximating the cost of such photocopying to the Servicer.

Section 7.3  Accounting Procedures
             ---------------------

             7.3.1.  Principal and Interest Computation. All Mortgage Loans must
amortize with interest calculated and paid in arrears. Under this method, the
interest due from a Borrower on a Due Date is calculated based on (a) the Unpaid
Principal Balance of the related Mortgage Loan prior to application of the
principal portion of the related current Monthly Payment, (b) thirty days
interest at the related Mortgage Interest Rate and (c) adjusted as herein
provided for the effects of Curtailments, Partial Liquidation Proceeds,
Prepayments in Full and Liquidations. The calculated interest portion is then
subtracted from the related Monthly Payment to obtain the principal portion. The
principal portion is then applied to the Unpaid Principal Balance of the related
Mortgage Loan. The amount to be applied to interest for a multiple installment
must be calculated using the Unpaid Principal Balance of the related Mortgage
Loan remaining after the previous interest calculation and principal
application.

             7.3.2.  Amortization Requirement. The amortization of each Mortgage
Loan must reduce to zero, or as to Balloon Loans, the respective Balloon Amount,
at the end of the Mortgage Loan term through the application of regular monthly
payments. Capitalization of

                                      -43-

<PAGE>

interest is not permitted, except as provided by the terms of any Mortgage Loan
that provides for negative amortization.

             7.3.3.  Negative Amortization. To the extent any Mortgage Loan
provides for negative amortization, such as a GPM or GPARM Loan, the Servicer
must assure that the Unpaid Principal Balance of such Mortgage Loan never
exceeds the related Maximum Negative Amortization Amount, and that the related
Monthly Payment is recast as provided for in the Mortgage Note such that the
balance fully amortizes within the remaining term of such Mortgage Loan.

             7.3.4.  Interest Calculations. Monthly interest calculations for
periods of a full month must be based on a 30-day month and a 360-day year.
Factors used for such calculations should be carried to a minimum of three
decimal places. The dollar amount of any interest payment shall be carried out
to a minimum of three decimal places. Interest calculations for a period of less
than a full month must be based on a 365-day year.

             7.3.5.  Buydown Loans. The Servicer must amortize a Mortgage Loan
for which Buydown Funds are applied at the Mortgage Interest Rate, not at the
buy-down rate, in order to ensure that payments are collected to amortize
properly the Mortgage Loan.

Section 7.4  Application Procedure
             ---------------------

             7.4.1.  Application Priority. A payment from a Borrower will
normally consist of interest, principal, deposits for insurance and taxes and
late charges, if applicable. Payments received from Borrowers must be applied in
the order provided for in the related Security Instrument. To the extent not
inconsistent with the related Security Instrument, such payments shall be
applied in the following order:

             (a) required monthly interest;

             (b) required monthly principal;

             (c) deposits for taxes and insurance;

             (d) prepayment charges; and

             (e) any fees which may be retained by the Servicer, including late
     charges, returned check fees, and assumption fees.

             7.4.2.  Reapplication of Prior Payments. If the Servicer reapplies
prior prepayments or accumulated Curtailments for payment of subsequent
installments it shall promptly notify the Master Servicer of such reapplication
and shall follow any instructions of the Master Servicer in respect of such
reapplication.

             7.4.3.  Advance Payments. Payments made by the Borrower to satisfy
future installments must be accounted for as prepaid installments of principal
and interest. The Servicer should contact the Borrower if there is a question
about the Borrower's intention in making any unscheduled payment.

                                      -44-

<PAGE>

Section 7.5  Curtailments
             ------------

             7.5.1.  Curtailment Amount. The Servicer may accept Curtailments at
any time. If a Mortgage Loan is delinquent, funds received must first be applied
to bring the Mortgage Loan current. If there are excess funds after the
application of amounts received from the Borrower to pay the related Monthly
Payment, the excess funds represent a Curtailment and may be applied as a
partial principal prepayment.

             7.5.2.  Curtailment Application. If a Curtailment is received on or
after the Due Date, the Servicer may either (i) retroactively apply the
Curtailment to the Scheduled Principal Balance of the related Mortgage Loan as
of the Due Date, or (ii) to the extent permitted by law and the Mortgage Loan,
apply such Curtailment at the end of the current period. The interest portion of
the next installment due is then calculated based on the Unpaid Principal
Balance of the related Mortgage Loan after application of the Curtailment.

             7.5.3.  Effect of Curtailment. A Curtailment may not be used to
reduce the related Mortgage Interest Rate for any Mortgage Loan or to postpone
the Due Date of any payment.

             7.5.4.  Curtailment Transmission. Each Curtailment must be
deposited into the related Custodial P&I Account within one Business Day after
receipt and must be remitted no later than the regularly scheduled Monthly
Remittance to the related Certificate Account.

Section 7.6  Liquidations
             ------------

             7.6.1.  Month End Interest. If a Prepayment in Full of a Mortgage
Loan occurs, such prepayment is received by the Servicer after the Applicable
Unscheduled Receipt Period ending in the month in which such prepayment occurs,
and the Servicer does not receive a full 30 days of interest (calculated on a
30-day month, 360-day year basis) on the prepaid amount for the month in which
such Prepayment in Full occurs, the Servicer must pay the Month End Interest on
all such Mortgage Loans so prepaid in full on the Remittance Date in the month
following the month of such prepayment. Any Month End Interest Shortfall for any
month shall not be recoverable from the Servicer or any other source in the
future. The payment of Month End Interest by the Servicer, as provided for
above, shall not be an "advance" and shall not be reimbursable from the proceeds
of any Mortgage Loan.

             7.6.2.  Liquidation Reports. The Servicer will report information
with respect to Liquidations in the monthly reports delivered to the Master
Servicer by the eighteenth calendar day of each succeeding month.

             7.6.3.  Deposit of Funds. Within one day after the Liquidation of a
Mortgage Loan, the Servicer shall deposit the related Liquidation Proceeds
together with the related Month End Interest into the related Custodial P&I
Account.

             7.6.4.  Document Request. After any Liquidation, the Servicer must
complete and send a Request for Release of Documents to the Master Servicer to
ensure the release of documents within the period required by applicable state
law.

                                      -45-

<PAGE>

Section 7.7  Realized Losses
             ---------------

             7.7.1.  Liquidation Realized Loss Determination. With respect to
the calculation of a Realized Loss suffered on the related Mortgage Loan on a
Liquidation of such Mortgage Loan or pursuant to Section 17.7.3, the amount of
such Realized Loss is equal to (a) the sum of:

             (i)     Unpaid Principal Balance;

             (ii)    unpaid interest accrued at the related Mortgage Interest
                     Rate;

             (iii)   attorneys' fees and other foreclosure and sale expenses;

             (iv)    unpaid taxes;

             (v)     unpaid property maintenance expenses;

             (vi)    unpaid insurance premiums; and

             (vii)   hazard loss expenses;

     less the sum of:

             (i)     the balance of Escrow Funds, if any;

             (ii)    any refund of any Hazard Insurance premium;

             (iii)   rental income receipts;

             (iv)    Insurance Proceeds or PMI Advances;

             (v)     cash proceeds of any foreclosure sale;

             (vi)    proceeds from sale of a REO; and

             (vii)   any amounts received pursuant to bankruptcy or insolvency
                     proceedings.

             7.7.2.  Bankruptcy Realized Loss Determination. With respect to the
calculation of a Realized Loss on a Mortgage Loan subject to a Deficient
Valuation, the amount of the Realized Loss is the difference between the Unpaid
Principal Balance of the related Mortgage Loan immediately prior to the
Deficient Valuation and the Unpaid Principal Balance as reduced by the Deficient
Valuation.

             7.7.3.  Reporting Requirement. As to any defaulted Mortgage Loan,
the Servicer must account to, and report in writing to, the Master Servicer as
to any Realized Loss (or gain) upon the Liquidation or Deficient Valuation in
respect of such Mortgage Loan.

             7.7.4.  Servicer's Liability. Except in the case of a purchase by
the Servicer of a Mortgage Loan from the Trustee thereof due to a breach of a
representation or warranty by the

                                      -46-

<PAGE>

Servicer or failure to perform the servicing procedures as set forth in this
Agreement, the Servicer is not liable for any Realized Loss on any Mortgage
Loan.


                                      -47-

<PAGE>

                                    ARTICLE 8

                                    ARM Loans

Section 8.1  ARM Loan Servicing
             ------------------

             8.1.1.  In General. It is the Servicer's responsibility to enforce
each ARM Loan (and any other Mortgage Loan) according to its terms and in
conformity with all applicable law. The Servicer's records must, at all times,
reflect the then-current Mortgage Interest Rate and Monthly Payment for such ARM
Loan and the Servicer must timely notify the Borrower of any changes to the
Mortgage Interest Rate and/or the Borrower's Monthly Payment.

             8.1.2.  Servicer's Liability. If the Servicer fails to make either
a timely or accurate adjustment to the Mortgage Interest Rate or Monthly Payment
for an ARM Loan or to notify the Borrower of such adjustments, and subsequently
receives a short Monthly Payment, the Servicer must pay from its own funds any
shortage until the Servicer has made the necessary corrections in conformance
with applicable law so as to secure the correct Monthly Payment from the
Borrower. In the event that such error results in the Borrower making a Monthly
Payment in excess of the amount which he should have made if such adjustment
were properly calculated, then the Servicer shall promptly (a) make the required
adjustment to the Borrower's Monthly Payment and Mortgage Interest Rate so that
they reflect the amounts as properly calculated as of the related Payment
Adjustment Date, (b) refund to the Borrower the amount of any such excess
received by the Servicer from the related Payment Adjustment Date and (c) deduct
from the respective Custodial P&I Account or the Certificate Account the amount
of such refund to reimburse the Servicer for making such refund. If the
Servicer's failure to make a scheduled change affects the Trustee's or
Servicer's rights to make future adjustments under the terms of the ARM Loan,
the Servicer shall be required to purchase the ARM Loan. Any amounts paid by the
Servicer pursuant to this Section shall not be an advance and shall not be
reimbursable from the proceeds of any Mortgage Loan.

             8.1.3.  Adjustment Reports. All Mortgage Interest Rate and Monthly
Payment adjustments must be reported to the Master Servicer in a ARM Loan change
report.

             8.1.4.  Substitute Index. If the Index required to be used to
determine the Mortgage Interest Rate for a Mortgage Loan is not available on an
Interest Adjustment Date, the Servicer, will select an index that is based on
comparable information, over which the Servicer has no control and that is
readily verifiable.

Section 8.2  Notice of Periodic Adjustment
             -----------------------------

             8.2.1.  Notice Requirement. The Notice of Periodic Adjustment is
the legal and official announcement to the Borrower of an ARM Loan of a change
in the Mortgage Interest Rate or the Monthly Payment. The Servicer must send
this notice to the Borrower, as stated in the related Mortgage Note and in
accordance with applicable law, and at least 25 days before each Payment
Adjustment Date.

                                      -48-

<PAGE>

             8.2.2.  Notice Contents. Each Notice of Periodic Adjustment
pertaining to an ARM Loan shall meet the requirements and specifications of the
Security Instrument, the Mortgage Loan, and applicable federal or state laws or
regulations.

Section 8.3  ARM Loan Conversion
             -------------------

             8.3.1.  Servicer's Determination. In the event a Borrower with a
convertible ARM Loan exercises its option to convert such Mortgage Loan to a
fixed interest rate, the Servicer will determine whether the conditions and
qualifications for conversion have been met and determine the fixed rate to be
applied to such Mortgage Loan pursuant to the terms of the related Mortgage
Note.

             8.3.2.  Conversion Notification. Upon any such conversion, the
Servicer shall prepare an ARM Loan conversion notification and send such
notification to the Master Servicer within three Business Days after the
conversion.

             8.3.3.  Purchase by Servicer. The Servicer shall purchase such
Converted Mortgage Loan from the applicable Trustee at the Purchase Price by
depositing the Purchase Price into the Custodial P&I Account.

                                      -49-

<PAGE>

                                    ARTICLE 9

                               Mortgage Loan Files

Section 9.1  Owner Mortgage Loan Files and Retained Mortgage Loan Files
             ----------------------------------------------------------

             9.1.1.  Owner Mortgage Loan File and Retained Mortgage Loan File
Requirements. For each Mortgage Loan, the Servicer shall ensure that an
appropriate Custodian will maintain an Owner Mortgage Loan File on behalf of the
Trustee that contains each of the documents or instruments specified in Section
2.01(a) of the Pooling and Servicing Agreement.

             For each Mortgage Loan after a Document Transfer Event, the
Servicer shall ensure that an appropriate Custodian will maintain the Retained
Mortgage Loan File on behalf of the Trustee that contains each of the documents
or instruments specified in Section 2.01(b) of the Pooling and Servicing
Agreement.

             9.1.2.  Custodian. If the original Security Instrument or the
Assignment from the respective prior owner of the related Mortgage Loan to the
Trustee or, if applicable, to the Trust Administrator, on behalf of the Trustee,
has not been delivered to the Custodian on the date of the transfer of ownership
of such Mortgage Loan to the Trustee because it is in the process of being
recorded, the Servicer shall, within five Business Days after its receipt of the
original recorded document, deliver it to the Custodian. The Servicer shall
promptly deliver to the Custodian any other Mortgage Loan Document to be
included in an Owner Mortgage Loan File, charged to the custody of the
Custodian, that comes into Servicer's possession.

             9.1.3.  Release of Documents from Owner Mortgage Loan File or
Retained Mortgage Loan File. In the event any document contained in an Owner
Mortgage Loan File or, after the Document Transfer Event, a Retained Mortgage
Loan File, is needed by the Servicer for the proper servicing of a Mortgage
Loan, the Servicer must send to the Trustee or the Custodian, as the case may
be, two copies of a Request for Release as defined in the Pooling and Servicing
Agreement of documents. The Master Servicer hereby authorizes the Trustee or the
Custodian, as the case may be, to release such Owner Mortgage Loan Files or
Retained Mortgage Loan Files after receipt of such Servicer's request (i) upon
payment in full of such Mortgage Loan, (ii) when necessary for foreclosure or
(iii) for such other cause as the Master Servicer deems appropriate, in its
reasonable discretion. The Servicer shall be responsible for such Mortgage Loan
Documents while they are in its possession and will be deemed to hold such Owner
Mortgage Loan Files or Retained Mortgage Loan Files in trust for the benefit of
the Trustee. If such Mortgage Loan has not been paid in full or otherwise
liquidated, the Servicer shall promptly return such Owner Mortgage Loan Files or
Retained Mortgage Loan Files when they are no longer required. Notwithstanding
the foregoing, unless such Mortgage Loan has been liquidated or the related
Owner Mortgage Loan Files or Retained Mortgage Loan Files have been delivered to
an attorney, a public trustee or other public official in order to foreclose on
the related Mortgaged Property, all such Owner Mortgage Loan Files or Retained
Mortgage Loan Files released by the Trustee or the respective Custodian, as the
case may be, must be returned within 21 calendar days after their release.

                                      -50-

<PAGE>

             9.1.4.  Execution by Trustee. In the event the Trustee's signature
is required on any document with respect to a Mortgage Loan for any reason,
including payment in full, assumption or foreclosure, the Servicer shall deliver
to the Master Servicer a written notice requesting that the Trustee execute such
documents and certifying as to the reason such documents are required. Upon
receipt of such executed documents, the Servicer shall record, file or deliver
such documents as appropriate for the proper servicing of such Mortgage Loan.

             9.1.5.  Representing Party Officers' Certificate. If it is
necessary for the respective Representing Party to deliver an Officers'
certificate with respect to the existence of a Title Insurance policy or a
Primary Mortgage Insurance policy for several Mortgage Loans, the Master
Servicer may consent to the delivery of a single Officers' certificate of the
respective Representing Party for a schedule of mortgage loans in lieu of a
separate Officers' certificate for each such Mortgage Loan.

             9.1.6.  Custodial Fees. The Servicer is responsible for the related
ongoing fees of each Custodian. If for any reason at any time the Master
Servicer pays custodial fees, the Servicer will promptly reimburse the Master
Servicer for such payments.

Section 9.2  Servicer Mortgage Loan Files
             ----------------------------

             9.2.1.  Servicer Mortgage Loan File Requirements. The Servicer must
maintain a Servicer Mortgage Loan File for each Mortgage Loan, which may be
distributed among several different files, each of which shall be clearly marked
with the Servicer Loan Number and shall be readily accessible to the Master
Servicer during regular business hours, that includes the following:

             (a) copies of each of the documents listed in Section 2.01 of the
     Pooling and Servicing Agreement that are held by the Custodian as part of
     the Owner Mortgage Loan File or Retained Mortgage Loan File, if applicable;

             (b) where such coverage is not provided under a blanket policy
     maintained by the Servicer, an original Hazard Insurance policy, or a copy
     thereof, or a certificate of insurance issued by the applicable insurer or
     its agent indicating such a policy is in effect for the related Mortgaged
     Property;

             (c) a Flood Insurance policy or a certificate of insurance issued
     by the insurer or its agent indicating that such a policy is in effect with
     respect to the related Mortgaged Property, if Flood Insurance is required
     pursuant to the provisions of Section 15.4 or Section 16.6 hereof for such
     Mortgaged Property;

             (d) originals or copies of all documents submitted to a Primary
     Mortgage Insurer for credit and property underwriting approval with respect
     to the related Mortgaged Property, if Primary Mortgage Insurance is
     required pursuant to the provisions of Section 15.2 hereof for such
     Mortgaged Property;

             (e) the originals of all RESPA and Regulation Z disclosure
     statements executed by the Borrower with respect to such Mortgage Loan;

                                      -51-

<PAGE>

             (f) the related Appraisal Report made at the time such Mortgage
     Loan was originated;

             (g) the HUD-1 or other settlement statement for the purchase or
     refinance, as the case may be, of the Mortgaged Property by the Borrower
     and mortgagor under the related Mortgage Note and Security Instrument with
     respect to such Mortgage Loan;

             (h) evidence of any tax service contract, if any;

             (i) copies of documentation, including the appropriate approval by
     the Master Servicer, relating to any modifications to the related original
     Mortgage Loan Documents;

             (j) documentation, including the appropriate approval by the Master
     Servicer, relating to any releases of any collateral supporting such
     Mortgage Loan;

             (k) collection letters or form notices sent to the Borrower with
     respect to such Mortgage Loan, but only if the Servicer does not maintain
     separate collection files, including all collection letters or notices,
     indexed by Borrower;

             (l) foreclosure correspondence, bankruptcy correspondence and legal
     notifications, if applicable with respect to the related Mortgaged
     Property; and

             (m) all other related Mortgage Loan Documents which are customarily
     maintained in accordance with Prudent Servicing Practices in a mortgage
     loan file in order to properly service a mortgage loan including, without
     limitation, documents regarding title claims.

             9.2.2.  Servicer Mortgage Loan File Access. The Servicer
acknowledges that each Servicer Mortgage Loan File shall be held in trust for
the Trustee. The Servicer further acknowledges that the Master Servicer may,
from time-to-time, request immediate delivery of any or all Mortgage Loan
records and documents to the Master Servicer, the Trustee, the Custodian or
another entity designated by the Master Servicer, and the Servicer shall
thereupon immediately deliver such records and documents, at the expense of the
Servicer. The Servicer agrees to permit the Master Servicer, from time to time
to conduct audits or inspections of any Servicer Mortgage Loan Files at one or
more of the Servicer's offices during normal business hours with advance notice.
The Servicer must grant the Master Servicer access to all books, records and
files relating to the Servicer's systems and procedures for servicing Mortgage
Loans as to all Servicer Mortgage Loan Files or to the Servicer's compliance
with the terms and conditions of this Agreement.

             9.2.3.  Alternate Media. Subject to any applicable law concerning
document retention requirements, the Servicer may maintain any Servicer Mortgage
Loan File, or any portion thereof, on microfilm, microfiche, optical storage or
magnetic media and may retain the microfilm, microfiche, optical storage or
magnetic media in lieu of hard copies of the documents required to be maintained
in such Servicer Mortgage Loan Files. The following requirements must be met:

             (a) the process must accurately reproduce originals onto a durable
     medium;

                                      -52-

<PAGE>

             (b) unless the Master Servicer provides otherwise by notice to the
     Servicer, the Master Servicer Loan Number must be clearly marked on the
     copies or optical storage or magnetic media;

             (c) the copies or optical storage or magnetic media must be easily
     transferable to legible hard copies of the material relating to the
     Mortgage Loans; and

             (d) backup copies of the microfilm, microfiche, optical storage or
     magnetic media must be made by the Servicer and retained off-site to
     protect against fire and other hazard losses.

If the copies, optical storage or magnetic media become damaged or lost for any
reason, the Servicer must bear the entire cost of restoring each Servicer
Mortgage Loan File and any other related documents which had been transferred to
microfilm, microfiche, optical storage or magnetic media. The Servicer also must
bear all costs of reproducing legible hard copies reasonably requested by the
Master Servicer. The Master Servicer may reasonably request copies of any
Servicer Mortgage Loan File in optical storage or magnetic media which the
Servicer has previously transferred to magnetic media or optical storage, as the
case may be. The Servicer shall furnish to the Master Servicer optical storage
or magnetic media copies of the requested Servicer Mortgage Loan File in such
format as maintained by the Servicer at the Servicer's expense.

Section 9.3  Requisite Form
             --------------

             9.3.1.  Form of Endorsements. Except for endorsements in blank, the
Servicer shall require that endorsements of any Mortgage Notes comply with the
format specified in Section 2.01(c) of the Pooling and Servicing Agreement.

             9.3.2.  Form of Assignment. Except for assignments in blank or in
the case of any Security Instrument registered in the name of MERS, the Servicer
shall require that assignments of any Security Instrument comply with the
following format specified in Section 2.01(c) of the Pooling and Servicing
Agreement.

                                      -53-

<PAGE>

                                   ARTICLE 10

                                     Escrows

Section 10.1 Escrow Criteria
             ---------------

             10.1.1. Escrow Requirement. Unless, (a) at the origination of a
Mortgage Loan the Borrower is not required to make Escrow Item payments
thereafter, (b) Escrow Funds collection has been waived pursuant to Section
10.5.1 hereof, or (c) the collection of Escrow Funds is precluded by applicable
law, the Servicer must continue to collect 1/12th of the annual total for all
Escrow Items with each Monthly Payment on such Mortgage Loan, as determined
pursuant to Section 10.3.1 hereof.

             10.1.2. Mortgage Loans without Escrow. If the Servicer is not
required to collect Escrow Funds on a Mortgage Loan, the Servicer shall require
proof of payment of all taxes, ground rents, assessments, insurance or other
charges, or use other means commonly used in the mortgage industry to ascertain
that such items are paid on a timely basis.

Section 10.2 Payment of Escrow Items
             -----------------------

             10.2.1. Escrow Payment Obligation. Where the Servicer is
responsible for the collection of Escrow Funds with respect to a Mortgage Loan,
the Servicer shall promptly pay all bills for any Escrow Items in such a manner
as to avoid late charges or penalties and to take advantage of any available
discount.

             10.2.2. Escrow Item Payments. Where (a) the Servicer has been
collecting Escrow Funds with respect to a Mortgage Loan, or (b) the Borrower has
not been obliged to make Escrow Funds payments or such payments have been waived
and such Borrower has failed to timely pay obligations which otherwise would be
Escrow Items, the Servicer must pay any obligation (i) which could become a
first lien on the related Mortgaged Property, or (ii) to maintain in force the
applicable Insurance Policies. Where Escrow Funds are maintained by the
Servicer, such obligations should be paid from the Borrower's Escrow Funds, or
in accordance with Section 10.2.3 hereof.

             10.2.3. Escrow Fund Insufficiency. When a Borrower's Escrow Funds
are insufficient to pay taxes, assessments and premiums, when due, subject to
applicable law, the Servicer must attempt to obtain the additional funds from
such Borrower. If sufficient additional funds have not been recovered by the
time the payment is due, the Servicer must advance its own funds to ensure
prompt payment. The Servicer may elect to advance funds prior to attempting to
obtain the additional funds from such Borrower; however, to the extent permitted
by applicable law, the Servicer shall thereafter attempt to obtain the advanced
funds from the Borrower or collect such advanced funds as described in Section
10.3.3.

             10.2.4. Nonpayment Notice. The Servicer must notify the Master
Servicer immediately of any Escrow Item that does not conform to either FNMA or
FHLMC standards.

                                      -54-

<PAGE>

Section 10.3 Escrow Fund Determination
             -------------------------

             10.3.1. Escrow Funds Analysis. Subject to all applicable Federal,
State and local laws, the Servicer must conduct an analysis of each Borrower's
Escrow Funds at least annually to determine the monthly deposits which must be
made by such Borrower. The analysis shall be performed based upon (a) reasonable
projections of the expenses to be paid from the Escrow Funds and (b) that as
such expenses come due, the Escrow Funds balance shall at all times be
sufficient to effect the payment of such expenses, unless a lower amount is
required by applicable law. Each Borrower must receive a statement of this
analysis. The analysis also must determine whether there is a surplus or
deficiency in such Borrower's Escrow Funds.

             10.3.2. Escrow Fund Surplus. A surplus in a Borrower's Escrow
Funds shall be refunded to such Borrower or taken into consideration in
determining the amount to be collected for Escrow Funds.

             10.3.3. Escrow Fund Deficiency. Where it is determined that a
deficiency exists in such Borrower's Escrow Funds, such Borrower may be
requested to pay the shortage in full or the deficiency may be taken into
consideration in determining the amount to be collected for Escrow Funds during
the next twelve months.

Section 10.4 Records
             -------

             10.4.1. Escrow Funds Records. The Servicer shall keep records of
Escrow Funds collected from each Borrower.

             10.4.2. Escrow Obligations Records. The Servicer must maintain
accurate records of the imposition of Escrow Item obligations and the payment of
Escrow Items.

Section 10.5 Escrow Waiver
             -------------

             10.5.1. Waiver Conditions. For any Mortgage Loan (other than a GPM
or GPARM Loan which provides for negative amortization in the future) that has
amortized down so that its current LTV is 80% or less, the Servicer may waive
the Borrower's future obligation to make Escrow Funds payments provided:

             (a) the Unpaid Principal Balance of such Mortgage Note divided by
     the value of the Mortgaged Property based on an appraisal made within 60
     days of the date of determination is 80% or less;

             (b) such Mortgage Loan is at least 12 months old; and

             (c) such Mortgage Loan has not been more than 30 days delinquent
     during the preceding 12 months.

             10.5.2. Waiver Rescission. The Servicer shall enforce the Escrow
Funds requirements with respect to any Mortgage Loan if the related Borrower
fails to act responsibly in making the required payments.

                                      -55-

<PAGE>

                                   ARTICLE 11

                       Collection and Servicing Practices

Section 11.1 General Servicing Requirements
             ------------------------------

             11.1.1. Servicing Practices. The Servicer agrees to service
Mortgage Loans in accordance with the requirements of this Agreement. In
general, where not otherwise expressly required by the provisions of this
Agreement, the Servicer shall service the Mortgage Loans in accordance with
Prudent Servicing Practices and generally in accordance with FNMA guidelines. As
to each Mortgage Loan, the Servicer shall take all such actions as may be
necessary to preserve the lien of the related Security Instrument upon the
related Mortgaged Property.

             11.1.2. Tax Returns and Other Reports. Unless otherwise instructed
by notice from the Master Servicer, the Servicer shall forward to each Mortgagor
such forms and furnish such information within the control of the Servicer as
are required by the Code to be furnished to them and shall prepare and file
annual reports required by the state authorities. By way of example, the
Servicer shall provide the Mortgagors with the reports required under Code
Sections 6050H (e.g., reporting on Form 1098 any mortgage interest, including
points, received and any reimbursements of qualified mortgage interest) and
6050J (Abandonments and Foreclosure of Real Property, Form 1099-A).

             11.1.3. Servicer Internal Controls. The Servicer shall maintain at
all times an adequate system of audit and internal controls in accordance with
Prudent Servicing Practices.

             11.1.4. Pool Insurance Compliance. Notwithstanding any other
provision of this Agreement, the Servicer shall at all times comply with all
applicable Pool Insurance policy requirements so as to assure the full benefit
of such Pool Insurance policy to the Trustee.

             11.1.5. Primary Mortgage Insurance Compliance. Notwithstanding any
other provision of this Agreement, the Servicer shall at all times comply with
all applicable Primary Mortgage Insurance policy requirements so as to assure
the full benefit of such Primary Mortgage Insurance policy to the Trustee.

             11.1.6. Letter of Credit Compliance. Notwithstanding any other
provision of this Agreement, the Servicer shall comply with all the requirements
of any Letter of Credit so as to assure the full benefit of such Letter of
Credit to the Trustee.

Section 11.2 Delegation of Duties
             --------------------

             11.2.1. Permissible Delegations. Without the written consent of
the Master Servicer authorizing further delegations, the only servicing duties
which the Servicer may elect to delegate, by agency, subcontract or otherwise,
and the only categories of such delegees, are as follows:

                                      -56-

<PAGE>

             (a) professional collection agencies to perform those duties and
     functions for the collection of delinquent amounts due on any Mortgage Loan
     that are customarily performed by such agencies in the locality where the
     related Mortgaged Property are located;

             (b) title insurance companies, escrow companies and trust companies
     to issue or provide reports reflecting the condition of title to any
     Mortgaged Property and services incidental to the foreclosure or
     acquisition in lieu of foreclosure of any Mortgaged Property, or the sale
     or disposition of any Mortgaged Property acquired by the Servicer;

             (c) attorneys licensed to practice in the state where the related
     Mortgaged Property is located to perform customary legal services in
     connection with the foreclosure or acquisition of such Mortgaged Property
     or the sale or disposition of such Mortgaged Property acquired by the
     Servicer at or in lieu of foreclosure, or for the collection of delinquent
     sums owed on any Mortgage Loan;

             (d) professional property inspection companies and appraisers to
     conduct routine inspections of, and provide written inspection reports on,
     any Mortgaged Property as required by this Agreement;

             (e) title companies, escrow companies and real estate tax service
     companies to provide periodic reports as to the amount of real estate taxes
     due on any Mortgaged Property and the due date or dates of each required
     installment;

             (f) credit bureaus or credit reporting companies to provide credit
     reports on Borrowers or persons who have applied to assume any Mortgage
     Loans;

             (g) construction companies, contractors and laborers to provide
     labor, materials and supplies necessary to protect, preserve and repair any
     Mortgaged Property as required by this Agreement;

             (h) lock box providers or payment processing administrators to
     provide payment processing services;

             (i) hazard insurance servicing companies to provide periodic
     reports as to the amount of hazard insurance premiums due on any Mortgaged
     Property and the Due Date or Due Dates of each required premium payment;
     and

             (j) such other third party service providers as the Servicer, in
     accordance with Prudent Servicing Practices, may deem appropriate.

             11.2.2. Delegee's Qualifications. The Servicer shall assure that
each Person retained to provide any of the services set forth in Section 11.2.1
hereof is fully licensed and holds all required Federal, State or local
governmental franchises, certificates and permits necessary to conduct the
business in which he is engaged and that such Person is reputable,
knowledgeable, skilled and experienced and has the necessary personnel,
facilities and equipment required to provide the services for which he is
retained.

                                      -57-

<PAGE>

             11.2.3. Responsibility for Costs. Any Person retained in
accordance with Section 11.2.1 hereof shall be retained solely for the
Servicer's account and at the Servicer's sole expense and shall not be deemed to
be an agent or representative of the Trustee, its successors or assigns, or the
Master Servicer or its successors or assigns.

             11.2.4. Servicer's Liability. The Servicer shall remain liable to
the Master Servicer for the performance of the Servicer's duties and obligations
under this Agreement, notwithstanding the delegation of any servicing function
pursuant to this Section 11.2.

Section 11.3 Due-on-Sale Clause Enforcement
             ------------------------------

             11.3.1. Enforcement Requirement. The Servicer is required to
enforce the Due-on-Sale Clause on any Mortgage Loan to the extent permitted by
applicable law upon the transfer of title of the related Mortgaged Property
unless (a) a Mortgage Loan is assumable pursuant to the terms of the related
Mortgage Note Assumption Rider, or (b) enforcement of the Due-on-Sale Clause
will jeopardize the Primary Mortgage Insurance coverage on such Mortgage Loan.

             11.3.2. Litigation Considerations. Where, in the Servicer's
judgment, the issue of enforceability is reasonably expected to be litigated,
the Servicer shall obtain the written consent of the Master Servicer before
enforcing any Due-on-Sale Clause.

             11.3.3. Approval Requirement. In all circumstances of an
unapproved transfer of a Mortgaged Property initiated by the Borrower, the
Servicer is required to promptly notify the Master Servicer and, where
applicable, the respective Primary Mortgage Insurer and/or the respective Pool
Insurer, of such transfer and obtain written approval before initiating
enforcement proceedings.

             11.3.4. Exempt Transactions. (a) The Servicer shall not be
required to enforce the due-on-sale (or transfer) provision of this Agreement
for certain types of property transfers or related transactions. The Servicer
shall process these exempt transactions without the approval or notification of
the Master Servicer. In each case, the Mortgaged Property shall remain subject
to the lien of the related Mortgage Loan, and each transferee or grantee
described below shall take subject to such lien. The following transactions
shall be deemed to be exempt transactions and shall require the review and
approval of the Servicer only prior to transfer:

             (i)         a transfer of the Mortgaged Property to the surviving
                    party on the death of a joint tenant or a tenant by the
                    entirety;

             (ii)        a transfer of the Mortgaged Property to a junior
                    lienholder as the result of a foreclosure or the acceptance
                    of a deed in lieu of foreclosure for the subordinate
                    mortgage;

             (iii)       a transfer of the Mortgaged Property (or, if the
                    Borrower is an inter vivos revocable trust, a transfer of a
                    beneficial interest in such trust) to a relative of a
                    deceased Borrower (or, in the case of an inter vivos
                    revocable trust Borrower, to a relative of the individual
                    who established the trust), provided that the transferee
                    will occupy the Mortgaged Property;

                                      -58-

<PAGE>

             (iv)        a transfer of the Mortgaged Property (or, if the
                    Borrower is an inter vivos revocable trust, a transfer of a
                    beneficial interest in such trust) to the spouse,
                    child(ren), parent(s), brother(s), or sister(s),
                    grandparent(s), or grandchild(ren) of the Borrower (or, in
                    the case of an inter vivos revocable trust Borrower, of the
                    individual who established the trust), provided that the
                    transferee will occupy the Mortgaged Property;

             (v)         a transfer of the Mortgaged Property (or, if the
                    Borrower is an inter vivos revocable trust, a transfer of a
                    beneficial interest in such trust) to a spouse of the
                    Borrower (or, in the case of an inter vivos revocable trust
                    Borrower, of the individual who established the trust) under
                    a divorce decree or legal separation agreement or from an
                    incidental property settlement agreement, provided that the
                    transferee will occupy the Mortgaged Property;

             (vi)        a transfer of a Mortgaged Property that is jointly
                    owned by unrelated co-borrowers from one of the Borrowers to
                    the other, provided that the Borrower who is gaining full
                    ownership of the Mortgaged Property shall continue to occupy
                    it and the transfer occurs after at least 12 months have
                    elapsed since the Mortgage Loan was closed;

             (vii)       a transfer of the Mortgaged Property (or, if the
                    Borrower is an inter vivos revocable trust, a transfer of a
                    beneficial interest in such trust) into an inter vivos
                    revocable trust (or, if the Borrower is an inter vivos
                    revocable trust, into a new trust), so long as the Borrower
                    (or the individual who established the original inter vivos
                    revocable trust) will be the beneficiary of the trust and
                    the occupant of the Mortgaged Property;

             (viii)      the granting of a leasehold interest in the Mortgaged
                    Property that has a term of three or fewer years and does
                    not provide an option to purchase the Mortgaged Property, or
                    a renewal option that would allow the term to extend beyond
                    three years;

             (ix)        the creation of a subordinate lien upon the Mortgaged
                    Property, provided that there is no transfer of occupancy
                    rights therein; or

             (x)         the creation of a purchase money security interest for
                    household appliances which are situated in or upon the
                    Mortgaged Property.

             (b) If the individual or entity transferring the Mortgaged Property
     requests a release of liability, the Servicer must review the credit and
     financial capacity of the individual or entity receiving the Mortgaged
     Property. The Servicer may approve the release of liability if it believes
     the recipient is capable of assuming the mortgage obligations and, where
     applicable, with the consent of the respective Primary Mortgage Insurer
     and/or the respective Pool Insurer. If the Servicer does not believe that
     the recipient is credit worthy or if the consent of the respective Primary
     Mortgage Insurer and/or the respective Pool Insurer is required but not
     obtained, the Servicer shall deny the

                                      -59-

<PAGE>

     request for the release of liability, although the transfer may still be
     processed without the release. If the request is denied based solely on the
     Primary Mortgage Insurer's or the respective Pool Insurer's decision, the
     denial letter should state that fact.

             (c) The Servicer shall advise (i) each insurance company providing
     Hazard Insurance and Flood Insurance, where applicable, (ii) the relevant
     tax authorities, where applicable, (iii) the respective Primary Mortgage
     Insurer and/or the respective Pool Insurer and (iv) other interested
     parties when it processes transactions under this Section 11.3.4. The
     Master Servicer does not need to be notified about such a transaction
     unless the Servicer agrees to a release of liability under Section
     11.3.4(b).

Section 11.4 Assumptions
             -----------

             11.4.1. Assumption Requirements. Any Assumption permitted under
this Agreement shall be performed in accordance with Prudent Servicing
Practices. In connection with an Assumption of an assumable Mortgage Loan, the
Servicer shall process such Assumption as provided for in the Mortgage Note or
the Mortgage Note Assumption Rider and shall verify that:

             (a) no material term of the Mortgage Note (including, but not
     limited to, the Mortgage Interest Rate, the remaining term to maturity, the
     Gross Margin, the Index, the Maximum Lifetime Mortgage Interest Rate, the
     Minimum Lifetime Mortgage Interest Rate, and any Periodic Rate Cap or any
     Periodic Payment Cap) may be changed in connection with such Assumption;

             (b) that the new Borrower qualifies for credit under the Master
     Servicer's criteria and standards for similar loans;

             (c) where applicable, the respective Primary Mortgage Insurer,
     and/or the respective Pool Insurer has in advance approved in writing such
     Assumption of such Mortgage Loan by the new Borrower and such Mortgage Loan
     will continue to be insured by such Primary Mortgage Insurer and/or such
     Pool Insurer;

             (d) the documents relating to such Assumption (i) create a valid
     and enforceable promise to pay the Unpaid Principal Balance of the related
     Mortgage Loan, together with interest thereon in accordance with the
     related Mortgage Note by the new Borrower and (ii) the related Security
     Instrument continues to evidence a valid and perfected first lien on the
     related Mortgaged Property; and

             (e) such Mortgage Loan will continue to be a valid first priority
     security interest upon the related Mortgaged Property.

             11.4.2. Approval and Release. In connection with an Assumption of
an assumable Mortgage Loan and in accordance with the provisions of the related
Mortgage Loan Documents, upon such verification, (a) the Servicer may approve
such Assumption and (b) only with the prior written approval of, where
applicable, the Primary Mortgage Insurer and/or the Pool Insurer, unless such
approval is precluded by the terms of the Mortgage Loan Documents, release the
previous Borrower from liability.

                                      -60-

<PAGE>

             11.4.3. Notification of Assumption. The Servicer shall notify the
Master Servicer of any Assumption by the eighteenth calendar day of the month
following the month in which the Assumption took place using the Assumption
Report and shall provide to the Custodian the original assumption agreement.

             11.4.4. Assumption Fees. Subject to applicable law or regulation
and the provisions of the related Mortgage Note, the Servicer may charge the
Borrower and retain a reasonable and customary assumption fee. Such fee is
receivable only from the Borrower directly and may not be withdrawn from any of
the custodial accounts maintained hereunder.

             11.4.5. Disclosure Requirement. In connection with an Assumption
of an assumable Mortgage Loan, the Servicer shall make all disclosures required
by applicable law.

Section 11.5 Partial Releases and Easements
             ------------------------------

             11.5.1. Prerequisites. The Servicer must take the following
actions prior to permitting the grant of a partial release of a Mortgaged
Property from the lien of the related Security Instrument, easement, consent to
substantial alterations and any other changes affecting the related Mortgage
Loan or such Mortgaged Property:

             (a) where applicable, obtain the respective Primary Mortgage
     Insurer's and/or the respective Pool Insurer's prior written approval;

             (b) if the value of the released property is more than five
     thousand ($5,000) dollars, obtain an acceptable Appraisal Report showing
     the current market value of such Mortgaged Property before and after the
     release and showing individually both the value of the land and of the
     improvements thereon;

             (c) ensure that any and all cash consideration received at least
     equals the current market value of property or rights to be released
     regarding such Mortgaged Property;

             (d) ensure that any and all cash consideration received is applied
     to the Unpaid Principal Balance of such Mortgage Loan to the extent of the
     diminution of the value of such Mortgaged Property;

             (e) cause all legal documents for the transaction to be reviewed;

             (f) ensure that such Mortgaged Property, following such release or
     change, adequately secures the Unpaid Principal Balance of the Mortgage
     Loan and accrued interest thereon and that the related Loan-to-Value ratio
     will not be greater than 80%, after giving effect to clause (d) hereof; and

             (g) obtain written notification from the respective Title Insurer
     that the related Title Insurance policy remains fully in effect with
     respect to such Mortgaged Property, as modified, following such release or
     change.

             11.5.2. Release or Modification of Lien. With the consent, where
applicable, of the respective Primary Mortgage Insurer, and/or the respective
Pool Insurer, the Servicer may

                                      -61-

<PAGE>

approve applications for partial release of a Mortgaged Property from the lien
of the related Security Instrument, easements, consent to substantial
alterations and any other changes affecting the related Mortgage Loan or such
Mortgaged Property if the perquisites in Section 11.5.1 have been satisfied. The
Servicer shall promptly notify the Master Servicer of any approval under Section
11.5.1. and this Section 11.5.2 affecting the lien upon a Mortgaged Property.

             11.5.3. Master Servicer's Approval. If the Servicer is not able to
meet the prerequisites specified in Section 11.5.1 or if the amount of
consideration received is less than the reduction in the value of the Mortgaged
Property due to the partial release or other changes, the Servicer must obtain
the approval of the Master Servicer prior to permitting an application described
in Section 11.5.2. The Servicer shall furnish such information as the Master
Servicer shall request in connection with an application under this Section
11.5.3.

Section 11.6 Recordation of Assignments
             --------------------------

             11.6.1. Recordation Requirement. The Servicer must, at its own
expense, record the Assignment of each Security Instrument (other than with
respect to any Mortgage Loan registered in the name of MERS) to the Trustee or,
if applicable, to the Trust Administrator on behalf of the Trustee, as well as
any previously unrecorded intervening Assignments. In the case of any Mortgage
Loan registered in the name of MERS, the Servicer shall take all actions as are
necessary to cause the Trustee or, if applicable, to the Trust Administrator on
behalf of the Trustee, to be shown as the owner of the related Mortgage Loan on
the records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS. If any Security Instrument
or Assignment is not recorded within the later to occur of (i) the date 120 days
after the acquisition of the a Mortgage Loan by the Trustee or, if applicable,
the Trust Administrator on behalf of the Trustee, if the Servicer has been
servicing such Mortgage Loan from the Trustee's or, if applicable, the Trust
Administrator's date of acquisition or (ii) the date 120 days after the date the
Servicer began servicing such Mortgage Loan, the Master Servicer shall have the
right to so effect such recordation at the Servicer's expense.

             11.6.2. Extension of Recording Period. The time to record an
Assignment of a Security Instrument may be extended from the end of permissible
recordation period set forth in Section 11.6.1 if the Servicer provides an
Officer's certificate acceptable to the Master Servicer certifying that the
Servicer has used its best efforts to complete the recordation process for the
Security Instrument and/or Assignment, as applicable, and that the factors
preventing completion of the recordation process are beyond the Servicer's
control.

             11.6.3. Delivery Requirement. Promptly following the recordation
of any Security Instrument or an Assignment, the Servicer shall deliver to the
Custodian, unless otherwise directed in writing by the Master Servicer, such
Security Instrument or Assignment bearing evidence of recordation or, if the
original Security Instrument or Assignment is retained by the recording office,
a certified copy of the original recorded Security Instrument or Assignment.

             11.6.4. Waiver of Recordation. The Master Servicer shall generally
require the Servicer to record an Assignment of the Security Instrument for each
Mortgage Loan to the Trustee or, if applicable, to the Trust Administrator on
behalf of the Trustee. However, the

                                      -62-

<PAGE>

recordation requirement with respect to an Assignment may be waived for a
Mortgage Loan if (a) the related Mortgaged Property is in a state in which
recordation of such an Assignment is not required to protect the Trustee's
right, title and interest in and to the related Mortgage Loan and the Seller or
the Servicer has delivered to the Master Servicer an Opinion of Counsel,
acceptable to the Master Servicer, to that effect or (b) the Master Servicer has
been advised by the Seller that the nonrecordation of an Assignment in a state
will not result in a reduction of the rating assigned by each Rating Agency at
the time of the initial issuance of the Wells Fargo Asset Securities
Corporation, Mortgage Pass-Through Certificates, Series 200_-_.

Section 11.7 General Servicing Considerations
             --------------------------------

             11.7.1. Abandonment. If the Servicer discovers that any Mortgaged
Property is not occupied, the Servicer must immediately attempt to contact the
Borrower in order to determine the reason for the vacancy. If the Servicer
determines that such Mortgaged Property has been abandoned, the Servicer, at its
own expense, must take all necessary actions to protect such Mortgaged Property
from waste, damage and vandalism. Such expenses shall be recoverable by the
Servicer solely from the Liquidation Proceeds of the related Mortgage Loan, if
any, or directly from the Borrower.

             11.7.2. Buydown Funds. The Servicer must distribute any Buydown
Funds in each Custodial Buydown Account in accordance with the terms of the
applicable Buydown Agreement.

             11.7.3. Notification Matters. Based upon information obtained
pursuant to its obligations under Section 12.2.6, the Servicer shall (i)
maintain accurate records of and (ii) except in the case of paragraph (f) hereof
involving a monetary default of the Borrower addressed by Article 12 hereof,
immediately notify the Master Servicer upon discovering any of the following:

             (a) deterioration of, waste of, or lack of repair to, any Mortgaged
     Property, which materially and adversely affects the Value of such
     Mortgaged Property and the Borrower refuses or is not financially able to
     make the necessary repairs;

             (b) sale or transfer of any Mortgaged Property in a manner not
     approved by the Servicer pursuant to the provisions of this Agreement;

             (c) material litigation involving any Mortgaged Property;

             (d) abandonment of any Mortgaged Property;

             (e) a material default, determined in accordance with Prudent
     Servicing Practices, under the terms of any Security Instrument, Mortgage
     Note, Condominium Project or PUD constituent document or similar
     obligations of a Borrower; or

             (f) any other situation that may materially and adversely affect
     the value of any Mortgage Loan.

                                      -63-

<PAGE>

             11.7.4. Eminent Domain. The Servicer must submit appropriate
recommendations and documentation to the Master Servicer and, where applicable
the respective Primary Mortgage Insurer and/or the respective Pool Insurer, of
any taking by eminent domain if:

             (a) the Mortgaged Property will be taken in whole and the
     consideration to be paid to the Borrower will be insufficient to satisfy
     the Unpaid Principal Balance (plus any unreimbursed Advances) of the
     related Mortgage Loan, or

             (b) the Mortgaged Property will be taken in part and (i) the ratio
     of the (A) Unpaid Principal Balance (plus any unreimbursed Advances) of the
     Mortgage Loan to (B) the Current Value of the remaining Mortgaged Property
     is higher than (ii) the LTV ratio of the Mortgage Loan immediately before
     the taking, even after applying any consideration to the Unpaid Principal
     Balance of the Mortgage Loan.

     The Servicer must take all steps necessary to prevent loss of any Primary
     Mortgage Insurance or Pool Insurance benefits due to any taking by eminent
     domain.

             11.7.5. Late Charges. Late charges may not be assessed unless a
Borrower failed to make payments in accordance with the Mortgage Note.

Section 11.8 Borrower Bankruptcy
             -------------------

             11.8.1. Servicer's Duty. The Servicer shall be responsible for
representing the interests of the Trustee in any bankruptcy proceedings
involving a Borrower.

             11.8.2. Responsibility for Costs. The costs of protecting the
interests of the Trustee shall be advanced by the Servicer and are not (a)
chargeable to the related Borrower's Escrow Funds or (b) reimbursable from the
Master Servicer.

             11.8.3. Challenge Bankruptcy Reductions. If the bankruptcy judge
or trustee should propose to (a) reduce the Unpaid Principal Balance of a
Mortgage Note, (b) reduce the related Mortgage Interest Rate, (c) extend the
final maturity of such Mortgage Note, or (d) reduce the level of any monthly
payment on such Mortgage Note, the Servicer shall (i) challenge any such
modification on a timely basis, (ii) notify the Master Servicer immediately and
(iii) follow the Master Servicer's instructions regarding the bankruptcy
proceedings, and in the absence of explicit instructions, exercise reasonable
judgment to protect the interests of the Trustee.

             11.8.4. Bankruptcy Adjustments. If the action of any court results
in a Deficient Valuation or Debt Service Reduction, the Servicer shall provide a
calculation of the effects of such modification notifying the Master Servicer of
the new principal balance, Mortgage Interest Rate, new final maturity, or
monthly payment level, as the case may be, of such Mortgage Loan.

             11.8.5. Bankruptcy Plan Surveillance. With respect to each
Mortgage Loan which is the subject of a Deficient Valuation or a Debt Service
Reduction, the Servicer shall verify that payments are being made in accordance
with the plan approved in the related bankruptcy proceedings.

                                      -64-

<PAGE>

                                   ARTICLE 12

                             Delinquency Management

Section 12.1 In General
             ----------

             12.1.1. Servicing Practices. The provisions set forth in this
Article constitute the minimum guidelines and procedures for servicing
Delinquent Mortgage Loans. The Servicer must use collection procedures which
meet or exceed these guidelines. The Servicer's procedures must be sufficient
for promptly dealing with delinquencies. The Master Servicer retains the right
to require the Servicer to perform additional collection procedures which the
Master Servicer deems, in its reasonable discretion, necessary to realize the
objectives set forth herein or otherwise to protect the interests of the
Trustee.

             12.1.2. Servicer's Capabilities. The Servicer's collection staff
must be sufficiently skilled in financial counseling and mortgage servicing
techniques to assist a Borrower to bring his Mortgage Loan current and to
protect his equity and credit rating, while at the same time protecting the
interests of the Trustee and of the Master Servicer.

             12.1.3. Servicing Objectives. The purpose of any collection effort
is to cure a Delinquency in the shortest possible time. The Servicer should
treat each Delinquency individually. Discussions with the Borrower must cover
the cause of such Delinquency and the time frame in which such Delinquency shall
be cured. The Servicer should use notices, letters, telegrams, telephone calls,
face-to-face contact and other responsible collection techniques consistent with
Prudent Servicing Practices. The Servicer is required to maintain all collection
records. The Servicer must vary its collection techniques to fit individual
circumstances, avoiding a fixed collection pattern which may be ineffective in
dealing with particular Borrowers. The Servicer should recognize the importance
of telephone and face-to-face contact in any collection program. As part of its
collection procedures, the Servicer shall closely monitor all newly originated
Mortgage Loans.

             12.1.4. Servicer's Expenses. Unless otherwise specified, the cost
of any of the servicing procedures detailed in this Agreement shall be borne
solely by the Servicer. The Servicer may not charge such expenses against the
Borrower's Escrow Funds. The foregoing shall not preclude the Servicer from
recovering such expenses from the Borrower to the extent permitted by applicable
law and the related Mortgage Loan Documents.

Section 12.2 Delinquency Servicing Procedures
             --------------------------------

             12.2.1. Late Notice. A late notice shall be mailed by the Servicer
to the Borrower by the 18th day of such Delinquency.

             12.2.2. Telephonic Inquiry. The Servicer shall use best efforts to
make telephone contact with the Borrower by the 22nd day of such Delinquency.

                                      -65-

<PAGE>

             12.2.3. Notice of Default. Notification of default of such
Mortgage Loan shall be mailed by the Servicer to the Borrower by the 35th day of
such Delinquency.

             12.2.4. Borrower Interview. The Servicer shall comply with
applicable FNMA and FHLMC requirements with regard to Borrower interviews.

             12.2.5. Continuing Contacts. If satisfactory arrangements have not
been made to cure such Delinquency by the 90th day, the Servicer must continue
to contact the Borrower until either the related Mortgage Loan has been brought
current or the Servicer has made a recommendation in writing to the Master
Servicer for foreclosure of such Mortgaged Property or other action.

             12.2.6. Property Inspection. The Servicer is required to inspect
each Delinquent Mortgaged Property at such time and in such manner as is in
accordance with Prudent Servicing Practices. The Servicer must prepare a
Property Inspection Report following each inspection. All Property Inspection
Reports must be retained by the Servicer and copies thereof must be forwarded to
the Master Servicer promptly upon request. All expenses related to the foregoing
shall be recoverable by the Servicer from the Principal or from Liquidation
Proceeds, Insurance Proceeds, payments on the related Mortgage Loan or any other
source relating to the related Mortgage Loan or the related Mortgaged Property.
The foregoing shall not preclude the Servicer from recovering such expenses from
the Borrower to the extent permitted by applicable law and the related Mortgage
Loan Documents.

Section 12.3 Relief of Borrowers
             -------------------

             12.3.1. Servicer's Role. The Servicer shall be readily available
to Borrowers to offer skilled financial counsel and advice and shall make
personal contact with delinquent Borrowers as often as possible to achieve a
solution that will bring the Mortgage Loan current as soon as possible. The
Servicer shall be fully familiar with the form of relief to Borrowers provided
for herein and shall employ such relief.

             12.3.2. Servicer's Discretion. The Servicer shall have reasonable
discretion to extend appropriate relief to Borrowers who encounter hardship and
who are cooperative and demonstrate proper regard for their obligations.
However, no such relief shall be granted to any Borrower under a Mortgage Loan
unless the Servicer reasonably believes that there is a reasonable expectation
that such Borrower shall bring his Mortgage Loan current within a period
conforming to acceptable servicing practices; provided that such period will not
exceed 21 months from the Due Date of the earliest unpaid installment and will
not result in a "significant modification" of the Mortgage Loan under the REMIC
Provisions.

             12.3.3. Relief Requirement. Prior to granting relief with respect
to a delinquent Mortgage Loan as herein provided, the Servicer shall ascertain
that (i) the reasons for the default and (ii) the attitude and circumstances of
such Borrower justify the relief to be granted.

             12.3.4. Primary Mortgage Insurance Considerations. Where
applicable, the Servicer shall satisfy all requirements under the applicable
Primary Mortgage Insurance policy regarding the relief granted with respect to a
delinquent Mortgage Loan.

                                      -66-

<PAGE>

             12.3.5. Responsibility for Costs. The Servicer is responsible for
collection from such Borrower of any recording or similar costs or expenses
incidental to the granting of relief with respect to a delinquent Mortgage Loan.

             12.3.6. Forbearance Plan. (a) Where relief is appropriate, the
Servicer shall arrange with a Borrower a "Forbearance Plan" giving such Borrower
a definite period in which to reinstate his Mortgage Loan by immediately
commencing payments in excess of the regular Monthly Payments. Without the prior
written consent of the Master Servicer, special forbearance relief agreements
reducing or suspending the regular Monthly Payment of the related Mortgage Loan
for a specified period of time are not permitted. To the extent that (i) the
priority of the lien represented by such Mortgage Loan remains in effect and is
not adversely affected, (ii) where applicable, the related Primary Mortgage
Insurance policy remains in full force and effect and (iii) where applicable,
the related Pool Insurance policy remains in full force and effect, the
Servicer, in its discretion, may enter into a Forbearance Plan that provides
that the total amount owed during such Delinquency, including costs and
expenses, will be repaid within the shortest period practicable, commencing
immediately. With respect to such Mortgage Loan, the Forbearance Plan shall
provide that such Delinquency will be cured within a period conforming to
acceptable servicing practices; provided that such period will not exceed 21
months from the Due Date of the earliest unpaid installment and will not result
in a "significant modification" of the Mortgage Loan under the REMIC Provisions.
The Forbearance Plan for such Mortgage Loan shall be set forth in writing and
executed by the Borrower and by the Servicer in the form of a letter agreement
if the earliest unpaid installment is more than 60 days past due.

             (b) With the consent of the Master Servicer, the Servicer may
     modify the payment terms of Mortgage Loans that are in default, or as to
     which default is reasonably foreseeable; provided that no such modification
     shall reduce the Unpaid Principal Balance of such Mortgage Loan or
     permanently reduce the Mortgage Interest Rate of such Mortgage Loan; and
     provided further that prior to entering into any such modification the
     Servicer and the Master Servicer shall determine that such modification is
     likely to increase the proceeds of such Mortgage Loan over the amount
     expected to be collected pursuant to a foreclosure or other similar
     procedure.

             12.3.7. Accommodation Limitations. No modification, recast,
extension, or capitalization of delinquent payments of a Mortgage Loan other
than as provided in Section 12.3.6 hereof shall be permitted with respect to a
Mortgage Loan.

             12.3.8. Pool Insurance Considerations. Where applicable, the
Servicer shall satisfy all requirements under the applicable Pool Insurance
policy regarding the relief granted with respect to a delinquent Mortgage Loan,
including, without limitation, securing the prior written consent of the
respective Pool Insurer regarding (a) any change in any term of such Mortgage
Loan, (b) the release of the related Borrower from any liability related to such
Mortgage Loan, or (c) the release of any portion of, or interest in, the
Mortgaged Property from the lien of the related Security Instrument.

                                      -67-

<PAGE>

Section 12.4 Special Delinquency Servicing Considerations
             --------------------------------------------

             12.4.1. Advance Responsibility During Delinquency. In the event of
a Delinquency with respect to a Mortgage Loan, the Servicer agrees to advance
from its own funds the full amount of Monthly Payments (which may be net of the
related Servicing Fee) for such Mortgage Loan. These advances shall provide the
Trustee with a regular flow of funds on such delinquent Mortgage Loan. The
advance obligation stated above is in addition to any other advance obligations
which the Servicer has pursuant to the provisions of this Agreement. The
Servicer must still advance funds in accordance with the provisions of this
Agreement even if a forbearance has been granted.

             12.4.2. Primary Mortgage Insurance Compliance. Where applicable,
the Servicer shall be familiar with and shall satisfy all requirements of the
applicable Primary Mortgage Insurance policy with respect to a delinquent
Borrower. The Servicer shall have adequate controls to assure timely filing of
all notices to the appropriate Primary Mortgage Insurer. The Servicer shall
prepare and file all appropriate claims with respect to the applicable Primary
Mortgage Insurance policy, and the Servicer shall prepare and deliver to the
Master Servicer copies of all claims forms and other papers received from or
presented to any Primary Mortgage Insurer in connection with any claims
presented under any such policy, unless the Servicer is otherwise instructed by
the Master Servicer.

             12.4.3. Pool Insurance Compliance. Where applicable, the Servicer
shall be familiar with and shall satisfy all requirements of the applicable Pool
Insurance policy with respect to a delinquent Borrower. The Servicer shall have
adequate controls to assure timely filing of all notices to the appropriate Pool
Insurer. Copies of all such notices shall be sent to the Master Servicer upon
request. The Servicer shall prepare and file all appropriate claims with respect
to the applicable Pool Insurance policy, and the Servicer shall prepare and
deliver to the Master Servicer copies of all claims forms and other papers
received from or presented to any Pool Insurer in connection with any claims
presented under any such policy, unless the Servicer is otherwise instructed by
the Master Servicer.

                                      -68-

<PAGE>

                                   ARTICLE 13

                           Foreclosure Administration

Section 13.1 Foreclosure Prerequisites
             -------------------------

             13.1.1. Foreclosure/Alternative to Foreclosure Initiation. (a)
When a Borrower reaches the 90th day of Delinquency and the Servicer has
exhausted all reasonable means of curing the Delinquency, the Servicer shall
either begin the foreclosure process or suggest an alternative to foreclosure in
accordance with Prudent Servicing Practices. In conjunction with the Servicer's
decision to begin the foreclosure action or seek an alternative to foreclosure,
the Servicer shall provide written notice to the Master Servicer and, where
applicable, the respective Primary Mortgage Insurer and/or the respective Pool
Insurer no later than ten days after the initiation of foreclosure proceedings
or the alternative to foreclosure. Notwithstanding anything to the contrary in
this Section 13.1.1, the Master Servicer may direct the Servicer to stop the
foreclosure action or to modify any alternative to foreclosure. The Servicer
shall prepare all necessary documentation to initiate the foreclosure
proceedings.

             (b) Notwithstanding anything to the contrary in this Section 13.1,
     if the Master Servicer has entered into a special servicing agreement
     pursuant to Section 3.08 of the Pooling and Servicing Agreement, the Master
     Servicer may direct the Servicer to commence foreclosure proceedings as
     contemplated by such special servicing agreement.

             13.1.2. Foreclosure Expenses. All fees and expenses shall be
consistent with FNMA standards and, where applicable, shall not exceed those
permitted under the respective Pool Insurance policy and/or the respective
Primary Mortgage Insurance policy. Fees in excess of the amount permitted by
FNMA guidelines or extraordinary legal services must be approved in writing in
advance by the Master Servicer, and, where applicable, by the respective Primary
Mortgage Insurer or the respective Pool Insurer, as the case may be, if required
by the applicable policy. All attorneys' fees, and other costs in excess of
FNMA's standards in respect of any foreclosure or acquisition in lieu of
foreclosure shall be identified in advance and a detailed estimate of the
amounts thereof shall be set forth in the Servicer's written recommendation. The
billing by a foreclosure attorney must demonstrate the appropriateness of any
extraordinary fees by the services required. In cases of full or partial
reinstatement of the related Mortgage Loan, the fees shall be reasonable and in
proportion to the authorized fee for services rendered for a completed
foreclosure. Unless otherwise expressly agreed in writing, neither the Master
Servicer, any of its Affiliates, their respective officers, directors,
employees, agents, successors or assigns, the Trustee nor, if applicable, the
Trust Administrator shall be liable for any attorneys' fees, trustees' fees,
witness fees, title search fees, court costs or other expenses incurred by the
Servicer in respect of any foreclosure or acquisition in lieu of foreclosure,
except to the extent that such fees, costs and expenses are fully reimbursable
under a Primary Mortgage Insurance policy and in fact are reimbursed.

             13.1.3. Hazardous Wastes. In the event that the Mortgaged Property,
related to a Mortgage Loan which is being considered for liquidation by
foreclosure or the transfer of a deed-in-lieu of foreclosure, contains, and the
Servicer has reason to believe that it contains, hazardous

                                      -69-

<PAGE>

or regulated substances which may impose liability, for damages, remediation or
otherwise, upon the owner of such Mortgaged Property pursuant to Federal, State
or local law, the Servicer shall not, except with the express prior written
approval of the Master Servicer, which approval makes specific reference to the
presence of such hazardous or regulated substances, undertake or continue the
process of foreclosure with respect to such Mortgaged Property.

Section 13.2 Deed-in-Lieu of Foreclosure
             ---------------------------

             13.2.1. Conditions. If the Master Servicer and the respective
Primary Mortgage Insurer and/or the respective Pool Insurer, if applicable, have
approved the liquidation of a Mortgage Loan by accepting a deed-in-lieu of
foreclosure of the related Mortgaged Property, the Servicer may accept such deed
without any further action or approval by the Master Servicer or, where
applicable, the respective Primary Mortgage Insurer and/or the respective Pool
Insurer, provided that:

             (a) the Servicer determines that the pursuit of a deficiency
     judgment is not practical or warranted;

             (b) the Mortgaged Property has been listed for sale at a market
     value for three months or more without a reasonable sales offer;

             (c) there reasonably appear to be legal impediments to pursuing
     foreclosure;

             (d) the acceptance of the deed-in-lieu of foreclosure will enable
     the Trustee to acquire the Mortgaged Property earlier than under a
     foreclosure action;

             (e) the Borrower acknowledges in writing that the deed is being
     accepted as an accommodation to him or her;

             (f) where applicable, the respective Primary Mortgage Insurer
     and/or the respective Pool Insurer has agreed to the acceptance of a
     deed-in-lieu;

             (g) the Borrower has not received cash consideration to deed the
     Mortgaged Property over to the Trustee, unless the Master Servicer
     otherwise approves;

             (h) the Borrower can convey acceptable marketable title, evidenced
     by a Title Insurance policy;

             (i) the Mortgaged Property is vacant (unless, where applicable, the
     respective Primary Mortgage Insurer and/or the respective Pool Insurer has
     agreed to accept an occupied property);

             (j) the Mortgaged Property is not subject to liens (held by
     others), judgments, or attachments; and

             (k) the Borrower agrees to assign and transfer to the benefit of
     the Trustee, where applicable, any rents if the Mortgaged Property is
     rented, and the Servicer agrees to collect any rental income.

                                      -70-

<PAGE>

             13.2.2. Subsequent Actions. Upon acquisition by the Trustee, the
Servicer shall promptly notify the Master Servicer and, if applicable, the
respective Primary Mortgage Insurer and/or the respective Pool Insurer,
indicating the details of the transaction and reasons for the conveyance and
providing such other information as is required under a Primary Inspection
Report to the Master Servicer and, if applicable, to the Primary Mortgage
Insurer and/or the Pool Insurer. Title shall be conveyed directly from the
Borrower to the Trustee or to such other Person designated by the Master
Servicer.

Section 13.3 Actions Prior to Foreclosure
             ----------------------------

             13.3.1. Notice Requirements. The Servicer shall send the Borrower a
letter, not less than 30 days before the commencement of foreclosure
proceedings, setting out (i) the nature of the default, (ii) the steps that must
be taken by the Borrower to cure the default and (iii) the date when foreclosure
proceedings will begin. If the Servicer has reason to believe that the related
Mortgaged Property has been abandoned or if the Borrower has displayed an
obvious disregard for his obligations under such Mortgage Loan, the foregoing
notice shall be forwarded at the earliest possible date following the Borrower's
default.

             13.3.2. Initiation of Proceedings. If foreclosure approval has not
been withheld by the Master Servicer and, where applicable, by the respective
Primary Mortgage Insurer and/or the respective Pool Insurer, with respect to a
Mortgaged Property, including Co-op Shares, the Servicer shall, unless it
arranges for the sale by the Borrower of the Mortgaged Property to a third party
pursuant to Section 13.3.3, initiate or cause to be initiated such foreclosure
actions as are authorized by law and consistent with practices in the locality
where the Mortgaged Property is located, including, in the case where such
Mortgaged Property includes a residential long-term lease, the succession by the
Servicer to the rights of the Borrower under the lease by foreclosure,
assignment in lieu of foreclosure or other comparable means. If such Mortgaged
Property has been abandoned or vacated by the Borrower and the Borrower has
evidenced no intention of honoring his obligations under the related Mortgage
Loan, the foreclosure process shall be expedited to the fullest extent permitted
by law.

             13.3.3. Short Sale of Defaulted Mortgage Loans in Lieu of
Foreclosure. With respect to any defaulted Mortgage Loan for which the Servicer
would otherwise be required to initiate foreclosure proceedings, the Servicer
may arrange for the sale of the Mortgaged Property by the Borrower to a third
party if, in the good faith judgment of the Servicer, the net proceeds from such
sale would be equal to or greater than the net proceeds of a bid conducted in
accordance with Section 13.4.2(b).

Section 13.4 Foreclosure Procedures
             ----------------------

             13.4.1. Foreclosure Expenses. During the period in which the
Mortgaged Property related to a Mortgage Loan is being foreclosed, remaining
Escrow Funds, if any, as well as any rent receipts, shall be used to pay all
taxes and insurance premiums that become due with respect to such Mortgaged
Property to the extent permitted by law. Except where other arrangements have
been made with the applicable Primary Mortgage Insurer, the Servicer shall, with
respect to each Mortgaged Property undergoing foreclosure, advance payment of
attorneys' fees, trustees'

                                      -71-

<PAGE>

fees and other foreclosure costs from the commencement of foreclosure
proceedings pertaining to such Mortgaged Property.

             13.4.2. Bidding Instructions. The Servicer shall issue bidding
instructions to the attorney or trustee in a foreclosure proceeding in
accordance with Prudent Servicing Practices. Where applicable, the Servicer
shall incorporate any bidding requirements issued by the respective Primary
Mortgage Insurer and/or the respective Pool Insurer. Any proceeds received from
an insurance loss settlement shall be included as part of the bid amount. Where
a claim or claim settlement under a Hazard Insurance or Flood Insurance policy
is pending, the Servicer shall contact the Hazard Insurance or Flood Insurance
carrier to verify that the proposed bid will not invalidate the claim, in that,
in certain jurisdictions, a bid for the total indebtedness will be considered as
satisfaction of the debt and would thus bar the Hazard Insurance or Flood
Insurance claim.

             13.4.3. Buydown Funds Use. Unless the related Buydown Agreement
provides otherwise, the Servicer may not use Buydown Funds relating to a
Mortgage Loan to cure a Delinquency with respect to such Mortgage Loan. Any
Buydown Funds remaining in the associated Custodial Buydown Account of a
Mortgage Loan in foreclosure must be disposed of in accordance with the terms of
the related Buydown Agreement.

             13.4.4. Servicer's Responsibilities. Subject to the provisions of
Article Three hereof, after acquisition of a Mortgaged Property, through
foreclosure or a deed-in-lieu of foreclosure, or after the Servicer shall have
taken possession of the Mortgaged Property, whichever occurs first, the Servicer
shall be responsible for the management of such Mortgaged Property. The Servicer
shall remain responsible until possession has been assumed by the applicable
Primary Mortgage Insurer or the applicable Pool Insurer or until such Mortgaged
Property are otherwise disposed of, as the case may be. The Servicer shall take
such action as is necessary to protect the Trustee's security or, after
acquisition thereof, ownership interest in such Mortgaged Property. Such action
shall include, without limitation, (i) management of such Mortgaged Property,
(ii) maintenance of such Mortgaged Property and (iii) if such Mortgaged Property
are vacant, protection of such Mortgaged Property against vandals and the
elements.

             13.4.5. Conveyance Documents. Where applicable, any conveyance by
the Servicer to the respective Primary Mortgage Insurer or the respective Pool
Insurer of a Mortgaged Property shall be made by the form of deed commonly used
in the particular jurisdiction where such Mortgaged Property is located. The
Servicer shall prepare the necessary documents within two weeks after the date
of sale at foreclosure or confirmation of sale, if applicable, or within a
reasonable time frame. The documents shall be forwarded to the Master Servicer
for approval and execution. After execution by the Trustee, such documents will
be returned to the Servicer for delivery to the respective Primary Mortgage
Insurer or the respective Pool Insurer which is acquiring such Mortgaged
Property.

Section 13.5 Mortgage Loan Reinstatement
             ---------------------------

             13.5.1. Borrower's Full Payment. If a Borrower offers to fully
reinstate his Mortgage Loan during the foreclosure process, the Servicer shall
accept the offer. To achieve full reinstatement of his Mortgage Loan, a Borrower
shall make payment of all (i) payments due

                                      -72-

<PAGE>

to bring such Mortgage Loan current, (ii) attorneys' fees, (iii) trustees' fees,
(iv) any additional legal costs, (v) all applicable late fees and (vi) any other
expenditures or Advances made by the Servicer during the foreclosure process.

             13.5.2. Borrower's Partial Payment. Except where otherwise required
by applicable law, the Servicer may not accept an amount in payment from a
Borrower which is less than the amount required for full reinstatement pursuant
to Section 13.5.1 hereof toward reinstatement of a Mortgage Loan during the
foreclosure process without the prior written approval from the Master Servicer
and, where applicable, the respective Primary Mortgage Insurer and/or the
respective Pool Insurer.

             13.5.3. Obligations upon Reinstatement. Upon accepting the
reinstatement of a Mortgage Loan, the Servicer shall immediately contact the
appropriate foreclosure attorney or trustee to avoid incurring additional legal
costs or fees. The Servicer must apply the reinstatement Funds upon receipt from
a Borrower in payment of the expenses enumerated in Section 13.5.1 hereof. Upon
receipt of the reinstatement funds from a Borrower the Servicer must (i) notify
the Master Servicer of the reinstatement of the related Mortgage Loan and (ii)
return to the Master Servicer, the related Mortgage Note and other related
Mortgage Loan Documents for reinclusion in the related Mortgage Loan File.

             13.5.4. Certain Assumptions Permitted. The Servicer is authorized,
notwithstanding the other provisions of this Article 13, to permit the
assumption of a defaulted Mortgage Loan rather than to foreclose or accept a
deed-in-lieu of foreclosure if, in the Servicer's judgment, the default is
unlikely to be cured and the assuming borrower meets the underwriting guidelines
that originally applied to such Mortgage Loan.

                                      -73-

<PAGE>

                                   ARTICLE 14

                               REO Administration

Section 14.1 General Provisions
             ------------------

             14.1.1. REO Action Plan. With regard to each REO which is acquired,
the Servicer shall prepare a plan of action within 30 Business Days after the
date on which the Trustee acquires marketable title to such REO. Each plan of
action shall set forth (i) a recommendation for the most effective manner to
dispose of the REO, based on a current appraisal report, a broker's price
opinion and a market analysis; (ii) the steps to be taken by the Servicer to
secure such REO; and (iii) an estimate of the amount of time that is required to
dispose of such REO. The Servicer shall promptly submit copies of each plan of
action to the Master Servicer and, where applicable, to the respective Primary
Mortgage Insurer, and/or the respective Pool Insurer. Unless otherwise directed
by the Master Servicer, the Servicer shall implement each plan of action in an
expeditious manner. Further, the Master Servicer may instruct the Servicer to
modify any plan of action as the Master Servicer shall direct. The Servicer
shall provide the Master Servicer with monthly progress reports with regard to
each plan of action detailing the status of the related REO and the progress
achieved in implementing the plan of action.

Section 14.2 REO Servicing
             -------------

             14.2.1. REO Servicing Requirements. The Servicer shall service each
REO from its acquisition through its disposition and shall ensure that all funds
received with respect to such REO are deposited to the appropriate Custodial P&I
Account for remittance to the Trustee, unless the Master Servicer has relieved
the Servicer of these responsibilities by written notification.

             14.2.2. Servicer's Responsibilities. In addition to any other
obligations set forth herein, upon acquisition of each REO, the Servicer shall
be responsible for:

             (a) managing, maintaining, securing and, where applicable, renting
     such REO until it is conveyed or sold;

             (b) inspecting such REO at least once every 30 days and promptly
     sending the Master Servicer an updated Property Inspection Report upon
     request;

             (c) paying all taxes, insurance, maintenance, management and
     foreclosure costs relating to such REO;

             (d) submitting recommendations for listing and soliciting offers on
     such REO;

             (e) marketing such REO;

             (f) completing the sale of such REO;

                                      -74-

<PAGE>

             (g) depositing sales proceeds relating to such REO into the
     appropriate Custodial P&I Account for remittance to the Trustee;

             (h) where applicable, satisfying all of the Primary Mortgage
     Insurer's procedural requirements and filing all required forms and claims;

             (i) where applicable, depositing Primary Mortgage Insurance or Pool
     Insurance proceeds relating to such REO into the applicable Custodial P&I
     Account for remittance to the Trustee;

             (j) processing the conveyance of such REO to the Primary Mortgage
     Insurer, where applicable; and

             (k) reporting (1) all changes in status of such REO and (2) all
     material expenses relating to such REO to the Master Servicer on a monthly
     basis.

             14.2.3. Notice. The Servicer shall notify the Master Servicer in
writing as soon as each REO is acquired.

Section 14.3 REO Records and Reports
             -----------------------

             14.3.1. Records Retention. The Servicer shall retain in its files
copies of all documents, reports and invoices described in this Section.

             14.3.2. Evidence of Title. Evidence that title to a REO is held by
the Trustee shall be submitted by the Servicer to the Master Servicer and, if
applicable, to the Primary Mortgage Insurer and/or the Pool Insurer, within ten
Business Days after marketable title to such REO has been acquired.

             14.3.3. REO Expenses. At the request of the Master Servicer,
Primary Mortgage Insurer and/or the Pool Insurer, the Servicer shall send a
report listing all expenses in administering each REO. The Servicer shall retain
such invoices in its records and shall, by request, (i) produce any such
invoices for inspection or (ii) at its own expense, provide copies of any such
invoices to the Master Servicer and, if applicable, to the Primary Mortgage
Insurer and/or the Pool Insurer, as directed. The foregoing expense invoices
shall include, without limitation, the following:

             (a) insurance premiums;

             (b) real estate tax bills;

             (c) special assessments;

             (d) owners' association dues; and

             (e) utility bills.

                                      -75-

<PAGE>

             14.3.4. REO Documents. Upon request, the Servicer shall send copies
to the Master Servicer and, where applicable, to the respective Primary Mortgage
Insurer and/or the respective Pool Insurer, of the following documents relating
to each REO:

             (a) any forced placed Hazard Insurance policy or Flood Insurance
     policy, if applicable;

             (b) any maintenance contracts;

             (c) any contractor bids relating to the rehabilitation of such REO
     pursuant to Section 14.5.3 hereof;

             (d) an updated Title Insurance policy which reflects the occurrence
     of foreclosure; and

             (e) plat map or house location survey, if already available.

Section 14.4 REO Marketing
             -------------

             14.4.1. REO Marketing Efforts. The Servicer shall begin efforts to
market a REO as soon as marketable title is acquired by the Trustee.

             14.4.2. REO Sales. (a) The Servicer shall obtain the best market
price for a REO for the Trustee while disposing of such REO in a timely and
efficient manner. Unless otherwise directed by the Master Servicer, the
Servicer, acting on behalf of the Trustee, shall dispose or cooperate with the
Trustee in disposing of such REO prior to the close of the third calendar year
following the year of its acquisition by the Trustee (the "REO Disposition
Period") or, if an extension has been obtained from the Internal Revenue Service
pursuant to Section 14.4.2(b), within such period. If the Servicer is otherwise
unable to sell such REO, unless otherwise directed by the Master Servicer, the
Servicer shall before the end of the REO Disposition Period or, if an extension
has been obtained from the Internal Revenue Service pursuant to Section
14.4.2(b), before the end of such period, following the acquisition of such REO,
auction such REO to the highest bidder in an auction reasonably designed to
bring a fair price. The Servicer shall consult with the Master Servicer prior to
holding such auction. The Servicer is eligible to bid in such an auction.

             (b) The Master Servicer may apply to the Internal Revenue Service,
     in the manner contemplated by Code Section 856(e)(3), for an extension of
     the REO Disposition Period with respect to an REO.

             14.4.3. Primary Mortgage Insurance Considerations. The Servicer
must ensure that any action taken with respect to the sale of a REO does not
jeopardize the maximum benefits available under the related Primary Mortgage
Insurance Policy, if any, with respect to the related Mortgage Loan. The
Servicer must inform the related Primary Mortgage Insurer of any listing
agreements or purchase offers that are received before the related Primary
Mortgage Insurer has finalized the disposition of the claim.

                                      -76-

<PAGE>

             14.4.4. Master Servicer Instructions. Where the Servicer receives
instructions from the Master Servicer regarding the marketing and sale of a REO,
either with respect to a specific property or generally, such instructions shall
govern the Servicer's actions, notwithstanding any provision herein.

             14.4.5. Pool Insurance Considerations. The Servicer must ensure
that any action taken with respect to the sale of a REO does not jeopardize the
maximum benefits available under the related Pool Insurance Policy, if any, with
respect to the related Mortgage Loan. The Servicer must inform the related Pool
Insurer of any listing agreements or purchase offers that are received before
the Primary Mortgage Insurer has finalized the disposition of the claim.

Section 14.5 REO Rehabilitation
             ------------------

             14.5.1. REO Rehabilitation Requirement. Unless the Master Servicer
shall otherwise direct, and subject to Section 3.2.2(ii) and Section 17.6.2, the
Servicer must ensure that any rehabilitation work (which shall not include the
cleaning of a recently acquired REO property) to any REO which is necessary to
restore such REO to a marketable condition is performed and that such work is
performed in a professional and workmanlike manner.

             14.5.2. Master Servicer Approval. The Servicer must obtain the
Master Servicer's prior written approval for rehabilitation work (which shall
not include the cleaning of a recently acquired REO property) when the aggregate
rehabilitation expenses with regard to a REO exceeds seven thousand five hundred
dollars ($7,500.00).

             14.5.3. Written Contractor Bids. The Servicer shall solicit
detailed written bids from independent contractors when the value of a contract
for rehabilitation of a REO exceeds five hundred dollars ($500.00) (which shall
not include the cleaning of a recently acquired REO property). Where the value
of a contract exceeds five thousand dollars ($5,000.00) (which shall not include
the cleaning of a recently acquired REO property), the Servicer shall receive
bids from a minimum of two independent and unrelated contractors and, upon
request, forward copies of such bids to the Master Servicer. Where the value of
a contract exceeds fifty thousand dollars ($50,000.00) (which shall not include
the cleaning of a recently acquired REO property), the Servicer shall receive
bids from a minimum of three independent and unrelated contractors and, upon
request, forward copies of such bids to the Master Servicer.

             14.5.4. Primary Mortgage Insurance Considerations. If a Mortgaged
Property which has become a REO and the related Mortgage Loan is covered by a
policy of Primary Mortgage Insurance, the Servicer shall notify the related
Primary Mortgage Insurer of such rehabilitation plans before the completion of
the Primary Mortgage Insurance claim to ensure reimbursement from the Primary
Mortgage Insurer. If the related Primary Mortgage Insurer elects not to
reimburse all rehabilitation expenses, work should be postponed until after
final disposition of the Primary Mortgage Insurance claim.

Section 14.6 REO Administration Failure.
             ---------------------------

             14.6.1. Servicer Removal. The Master Servicer may in its reasonable
discretion, in the event that the Servicer's actions or omissions result in
damage to any REO or a failure to sell any REO property within a reasonable
time, the Master Servicer may remove the servicing

                                      -77-

<PAGE>

of such REO from the Servicer and assume responsibility for management, control,
maintenance, security, rehabilitation and disposition of such REO.

             14.6.2. Servicer's Continuing Obligations. In the event that the
Servicer is removed from servicing a REO by virtue of the provisions of Section
14.6.1, the Servicer, as to such REO, shall nevertheless remain responsible to
(a) pay when due all insurance premiums, property taxes and assessments; (b)
file when due all claims for Primary Mortgage Insurance, Pool Insurance, Hazard
Insurance and, if applicable, Flood Insurance benefits; and (c) fulfill any
other related responsibilities required by the Master Servicer.

             14.6.3. Servicer's Duty to Compensate. Whether or not a Servicer is
removed from servicing with respect to a particular REO, the Servicer must
compensate the Master Servicer for any damages caused as a result of the
Servicer's breach of its obligation to service efficiently each REO. The
Servicer acknowledges that any damages suffered as a result of the Servicer's
inefficiency in managing a REO may not be quantified in advance of the Master
Servicer assuming responsibility for such REO.


                                      -78-

<PAGE>

                                   ARTICLE 15

                         Insurance and Letter of Credit

Section 15.1 General Provisions
             ------------------

             15.1.1. Insurance Requirements.

             The Servicer must verify that each Mortgage Loan has the insurance
coverage required pursuant to Article 15 and 16. All claims arising under
Insurance Policies maintained hereunder must be settled or otherwise disposed of
by the Servicer, and all such Insurance Policies must be maintained, including,
without limitation, the payment of premiums on a timely basis, by the Servicer
at no expense to the Trustee, the Trust Administrator (if applicable) or the
Master Servicer.

             If the Insurance Proceeds paid in respect of any Mortgage Loan are
not used to repair the related Mortgaged Property due to the particular
circumstances of the loss, and instead such Insurance Proceeds are applied to
reduce the Unpaid Principal Balance of such Mortgage Loan and such application
causes the Unpaid Principal Balance of such Mortgage Loan to reduce to zero, the
Servicer must treat the application of such proceeds as a Liquidation, and
notify the Master Servicer of such Liquidation.

             15.1.2. Uninsured Losses. The Servicer must take the following
actions in the event of loss or damage to any Mortgaged Property caused by an
earthquake, flood, tornado or other natural disaster immediately following, the
earlier to occur of (x) its notification or discovery of such loss or damage or
(y) the time at which the Servicer reasonably should have known of such loss or
damage in the exercise of Prudent Servicing Practices:

             (a) determine the extent of the losses or damages;

             (b) secure any abandoned Mortgaged Property from vandalism and the
     elements;

             (c) communicate with and counsel the respective Borrower on any
     disaster relief programs or other assistance which is available; and

             (d) notify the Master Servicer and recommend appropriate action to
     protect the interests of the Trustee and the respective Borrower.

             15.1.3. Servicer's Obligation to Maintain Insurance. If the
Servicer discovers that a Borrower does not have adequate insurance coverage as
required pursuant to the provisions of this Article, the Servicer must obtain
and maintain at its own expense the required insurance coverage on the related
Mortgaged Property. The Servicer may, in its discretion, cause the required
coverage to be maintained through a blanket insurance policy. Such expenses
shall not be recoverable by the Servicer from the Master Servicer or from
payments on the Mortgage Loan or any other source relating to the related
Mortgage Loan or the related Mortgaged Property, other than from Liquidation
Proceeds or Insurance Proceeds from the related Mortgage Loan.

                                      -79-

<PAGE>

To the extent permitted by applicable law and the related Mortgage Loan
Documents, the Servicer may initiate forced placed coverage with respect to such
Mortgaged Property and thereafter attempt to recover such expenses from the
related Borrower.

             15.1.4. Insurance Notices. The Servicer must arrange for all
insurance drafts, notices, policies, invoices, or other correspondence to be
delivered directly to the Servicer. The Servicer, its successors and assigns
must be named as the Mortgagee, the endorsement must show the Servicer's address
as shown in the following example:

             Wells Fargo Bank, N.A.
             7001 Westown Parkway
             West Des Moines, Iowa 50266

             15.1.5. Default by Insurer. If the Servicer knows or has reasonable
cause to suspect that an insurer under any applicable insurance policy required
pursuant to the provisions of this Article will, for any reason, be unable to
pay a valid claim, the Servicer shall immediately notify the Master Servicer
upon receipt of such information or formulation of such belief. The Servicer
shall then (i) find a substitute insurer and (ii) pay any premiums to the
insurer. In any case, the Servicer shall not be liable in any way for the
financial inability of any insurer under any insurance policy required herein to
pay a valid claim so long as the provisions of Article 15 and 16 hereof are
complied with.

             15.1.6. Insurance Carrier Rating. Each Insurance Policy must be
underwritten by an insurance carrier that is a FNMA or FHLMC approved Mortgage
Insurer.

             15.1.7. Insurance Carrier Licenses. Each insurance carrier must be
licensed or otherwise authorized by law to conduct business in each state in
which a related Mortgaged Property is located.

             15.1.8. Risk Exposure. If any Mortgaged Property is exposed to
hazards not fully covered by Hazard Insurance or Flood Insurance, the Servicer
must notify the Master Servicer immediately with a recommendation for additional
coverage.

             15.1.9. Evidence of Insurance. (a) The Servicer must maintain the
following documentation with respect to insurance coverage on each Mortgage
Loan:

             (i)     if Primary Mortgage Insurance is required, a copy of the
                     Primary Mortgage Insurance policy and any related
                     endorsements;

             (ii)    for one- to four-unit dwellings where such coverage is not
                     provided under a blanket policy maintained by the Servicer,
                     an original of the Hazard Insurance policy, if applicable,
                     and any related endorsements;

             (iii)   a copy of the Title Insurance policy and any related
                     endorsements, unless a Final Title Condition Report was
                     obtained;

             (iv)    For properties covered under a blanket policy, an original
                     of any blanket policy, and any related endorsements; and

                                      -80-

<PAGE>

             (v)     an original of any Flood Insurance policy, if Flood
                     Insurance is required, and any related endorsements.

             (b) A certificate of insurance is acceptable in lieu of any of the
     foregoing policies if it contains the following information:

             (i)     named insured and Mortgagee or, for PUD or Condominium
                     Units, named insured association, unit owner and unit owner
                     Mortgagee;

             (ii)    address of the Mortgaged Property;

             (iii)   type, amount and effective dates of coverage;

             (iv)    deductible amount;

             (v)     any endorsement or optional coverage obtained and made part
                     of the original policy;

             (vi)    insurer's agreement to provide at least ten day's prior
                     written notice to the Servicer and Borrower (or applicable
                     unit owner Mortgagee if for a PUD or Condominium Unit)
                     before any reduction in coverage or cancellation of the
                     policy; and

             (vii)   signature of an authorized representative of the insurer,
                     if required by applicable law.

Section 15.2 Primary Mortgage Insurance
             --------------------------

             15.2.1. Primary Mortgage Insurance Requirement. Unless Primary
Mortgage Insurance coverage with respect to a Mortgage Loan is canceled as
provided in Section 15.2.4 herein, the Servicer must maintain at all times
Primary Mortgage Insurance on any Mortgage Loan with an original LTV ratio in
excess of 80%.

             15.2.2. Primary Mortgage Insurance Coverage. As to each Mortgage
Loan which is required to have Primary Mortgage Insurance, pursuant to this
Agreement or the related Mortgage Loan Documents, Primary Mortgage Insurance
must at least provide coverage which insures against loss of that portion of the
Unpaid Principal Balance of the Mortgage Loan that exceeds 75% of the Value of
the Mortgaged Property. If the Mortgage Loan provides for negative amortization
or for the potential of negative amortization, the Primary Mortgage Insurance
policy must also insure any increase in the Unpaid Principal Balance from the
original principal balance of the related Mortgage Note.

             15.2.3. Primary Mortgage Insurer Downgrading. In the event that the
rating assigned by a Rating Agency to the claims paying ability of any Primary
Mortgage Insurer is reduced below the level permitted under Section 15.1.6, the
Servicer shall use its best efforts to replace each Primary Mortgage Insurance
Policy issued by such Primary Mortgage Insurer with a new Primary Mortgage
Insurance policy issued by an insurer whose claims paying ability is acceptable
to the Master Servicer. The premium for any replacement Primary Mortgage

                                      -81-

<PAGE>

Insurance policy shall not exceed the premium for the discontinued Primary
Mortgage Insurance policy.

             15.2.4. Primary Mortgage Insurance Cancellation. If a Borrower
requests cancellation of the Primary Mortgage Insurance policy with respect to
his Mortgaged Property, the following requirements must be met:

             (a) The current LTV ratio must be 80% or less. The current LTV
     ratio must be calculated by dividing the Unpaid Principal Balance of the
     related Mortgage Loan by the Current Value of the Mortgaged Property;

             (b) The related Mortgage Loan may not have been 30 days or more
     delinquent within the preceding twelve months; and

             (c) There may not have been any other default under the terms of
     the related Mortgage Loan at any time during the preceding twelve months.

     If the foregoing requirements are met, the Servicer may request the
     cancellation of such Primary Mortgage Insurance policy by submitting to the
     Master Servicer a Request for Primary Mortgage Insurance Cancellation. If
     there are indications that the Current Value of the Mortgaged Property has
     declined, the Servicer shall (a) obtain an Appraisal Report with respect to
     such Mortgaged Property that is not more than 60 days old or (b) determine
     the value of such Mortgaged Property by such other method acceptable to the
     Master Servicer. The expense of such an Appraisal Report shall not be borne
     by the Master Servicer. The Current Value of such Mortgaged Property set
     forth the Appraisal Report shall be used as the divisor in clause (a)
     hereof to determine whether the recalculated current LTV is 80% or less. If
     the recalculated current LTV is greater, the Primary Mortgage Insurance
     cancellation request will be denied. In addition, the Master Servicer may
     deny such a request if it determines, in its reasonable discretion, that
     the interests of the Trustee may be harmed by such cancellation.

             15.2.5. Primary Mortgage Insurance Claims. The Servicer must take
all steps to ensure the payment of the maximum benefits payable under the terms
of any Primary Mortgage Insurance policy. The Servicer must work diligently with
each Primary Mortgage Insurer to determine whether such insurer will settle the
claim by taking title to the Mortgaged Property in question or in some other
manner. The Servicer also must notify the Master Servicer immediately in writing
of any decision made by the applicable Primary Mortgage Insurer relative to a
claim. Upon receipt of any Primary Mortgage Insurance proceeds, the Servicer
must deposit such amounts in the appropriate Custodial P&I Account. The Servicer
shall promptly notify the Master Servicer in writing if any Primary Mortgage
Insurer at any time denies any or all of a claim filed under its Primary
Mortgage Insurance policy.

Section 15.3 Hazard Insurance
             ----------------

             15.3.1. Hazard Insurance Requirement. Unless alternative coverage
is provided pursuant to Section 16.3 hereunder, the Servicer must ensure that
each Mortgaged Property is covered at all times by Hazard Insurance.

                                      -82-

<PAGE>

             15.3.2. Hazard Insurance Coverage. As to each Mortgaged Property,
the amount of Hazard Insurance must be at least equal to the lesser of (a) the
Unpaid Principal Balance of the related Mortgage Loan or (b) 100% of the
insurable value of the improvements on the Mortgaged Property; provided,
however, that in no case shall the amount of Hazard Insurance be less than the
amount required to fully compensate for any damage to the improvements on the
Mortgaged Property on a replacement cost basis.

             15.3.3. Hazard Insurance Deductible. Except as a greater amount may
be required by an applicable law, each Hazard Insurance deductible may not
exceed FNMA or FHLMC's required deductible.

             15.3.4. Hazard Insurance Vacancy Coverage. The Servicer must ensure
that each Mortgaged Property is adequately covered even when vacant and, where
available, must obtain a vacancy permit endorsement.

             15.3.5. Hazard Insurance Mortgagee Provisions. Each Hazard
Insurance Policy must contain or have attached a standard mortgagee clause in
the form customarily used by or required by private institutional mortgage loan
investors. Such clause must provide that the Hazard Insurance carrier shall
notify the named Mortgagee at least ten days before any reduction in coverage or
cancellation of the policy. All mortgagee clauses must be properly endorsed,
necessary notices of transfer must be given and any other action must be taken
that is necessary in order to protect the interests of the Trustee, its
successors and/or assigns. The standard mortgagee clause should read as follows:
"Insuring Wells Fargo Bank, N.A., as agent for Wachovia Bank, National
Association, its successors and/or assigns."

Section 15.4 Flood Insurance
             ---------------

             15.4.1. Flood Insurance Requirement. Unless alternate coverage is
provided pursuant to Section 16.6 hereunder, the Servicer must ensure that Flood
Insurance is maintained at all times on Mortgaged Property that are in a special
flood hazard area identified by the Secretary of HUD or the Director of the
Federal Emergency Management Agency.

             15.4.2. Flood Insurance Coverage. As to each Mortgaged Property,
the amount of Flood Insurance must be at least equal to the lesser of (a) the
maximum amount available under the National Flood Insurance Program's regular
program or its emergency program, (b) the Unpaid Principal Balance of the
related Mortgage Loan or (c) 100% of the replacement cost of the improvements on
the Mortgaged Property.

             15.4.3. Flood Insurance Deductible. Except as a greater amount may
be required by applicable law, each Flood Insurance deductible may not exceed
the lesser of (a) $1,000 or (b) one percent of the applicable amount of
coverage.

Section 15.5 Title Insurance
             ---------------

             15.5.1. Servicer's Obligations. The Servicer shall perform and
comply with all requirements and conditions of each Title Insurance policy for
each Mortgage Loan and the related Mortgaged Property that are to be performed
or observed by the "Insured" or obligee thereunder as a condition to maintaining
and keeping it in force, or making a claim under, such

                                      -83-

<PAGE>

Title Insurance policy. The Servicer shall be named as a payee on all Title
Insurance policy loss drafts, and upon receipt thereof, the funds shall be
credited to the extent of the sum of (i) the Unpaid Principal Balance of such
Mortgage Loan and any interest accrued thereon, (ii) any outstanding advances
thereon and (iii) any expenses owed by such Borrower which are due the Trustee,
the Master Servicer or the Servicer, whether for its own account or others, to
the appropriate Custodial P&I Account and the balance of such funds, if any,
shall be credited to the appropriate Custodial T&I Account.

             15.5.2. Policy Custody. [Reserved]

             15.5.3. Title Insurance Claims. The Master Servicer must be
notified contemporaneously with the making of any claim under the Title
Insurance policy. The Servicer shall disburse the proceeds of any such
settlement in accordance with the instructions and requirements of the Master
Servicer.

Section 15.6 Insurance Loss Settlements
             --------------------------

             15.6.1. Settlement Approval. The approval of the Master Servicer
need not be requested for disposition of insurance loss settlements where
property damage is $10,000 or less, and the Servicer may disburse the loss
proceeds as provided herein. The Master Servicer must be notified before
disposition of any insurance loss settlement involving property damage over
$10,000.

             15.6.2. Settlement Disbursements. For each Mortgage Loan, including
a Mortgage Loan secured by Mortgaged Property located in a Condominium Project
or PUD, the Servicer is fully responsible for the disbursement of insurance loss
settlements under each Hazard Insurance policy and each Flood Insurance policy
where property damage is $10,000 or more, including but not limited to:

             (a) arranging for and authorizing the restoration and
     rehabilitation of the related damaged Mortgaged Property in cooperation
     with the Borrower;

             (b) subject to applicable law, applying the Insurance Proceeds to
     reduction of the Unpaid Principal Balance of such Mortgage Loan, provided
     that the Servicer (i) shall have determined that such proceeds are
     insufficient to repair and restore the related Mortgaged Property, or that
     the repair and restoration of such Mortgaged Property is not feasible; and
     (ii) shall have obtained authorization of the Master Servicer to make such
     application of the Insurance Proceeds;

             (c) collecting, endorsing and disbursing the Insurance Proceeds and
     arranging for progress inspections and payments, if necessary;

             (d) complying with all requirements of any Primary Mortgage
     Insurance policy pertaining to the filing of claims and the settlement of
     insurance losses to assure that the security of such Mortgage Loan is not
     impaired and that the coverage of such Primary Mortgage Insurance policy is
     not jeopardized or otherwise adversely affected;

                                      -84-

<PAGE>

             (e) assuring, through the receipt of Borrower's affidavits, repair
     contract copies, lien waivers and the like, that the priority of the lien
     of the Security Instrument is preserved, and that the Insurance Proceeds
     are applied to the restoration or repair of the related Mortgaged Property
     if not applied in payment of such Mortgage Loan;

             (f) obtain releases or waivers of liens and taking such other
     actions as are necessary to avoid the filing of laborers', materialmen's or
     mechanic's liens against the related Mortgaged Property; and

             (g) maintaining procedures and practices acceptable to the Master
     Servicer and in conformity with Prudent Servicing Practices for the control
     and disposition of insurance loss drafts.

             15.6.3. Settlement Funds. The Servicer shall be named as a payee on
all insurance loss drafts and upon receipt thereof, the funds shall be credited
to the Borrower's Insurance Proceeds balance and deposited into (a) where such
funds will be applied to the repair and restoration of the related Mortgaged
Property and where required by applicable state law, one or more separate escrow
accounts, so that the balance on deposit in such accounts is fully insured at
all times by the FDIC through either the BIF or SAIF or (b) where such funds
will not be applied to the repair and restoration of the related Mortgaged
Property, the respective Custodial P&I Account.

             15.6.4. Settlement Notice. The Servicer shall report any such
settlement to the Master Servicer on a Hazard Insurance Loss Draft Notification,
together with a summary of the disposition of the proceeds.

             15.6.5. Continuing Coverage. If a letter of assurance is obtained
from any insurer under a Hazard Insurance policy or a Flood Insurance policy
that the insurance coverage shall continue in full force and effect, the
Servicer shall deposit such letter in the appropriate Servicer Mortgage Loan
File.

             15.6.6. Property Inspections. The Servicer shall conduct property
inspections in accordance with the milestones of the repair and rehabilitation
plan for such Mortgaged Property and prepare Property Inspection Reports on any
Mortgaged Property involving property damage over $15,000. The Servicer shall
furnish a copy of the repair and rehabilitation plan for such Mortgaged Property
to the Master Servicer upon request.

Section 15.7 Letters of Credit
             -----------------

             15.7.1. Letter of Credit Draws. The Servicer shall take all steps
necessary to make draws under any Letter of Credit in accordance with the
provisions thereof. The Servicer shall notify the Master Servicer promptly in
writing if the Pledge Holder does not renew a Letter of Credit. Upon receipt of
any amounts as a result of a draw on a Letter of Credit because of the
nonrenewal of such Letter of Credit, the Servicer shall deposit such amounts in
the appropriate Custodial P&I Account and such amount shall be treated as a
prepayment of principal. Upon receipt of any amounts as a result of a draw on a
Letter of Credit for a reason other than the nonrenewal of such Letter of
Credit, the Servicer shall deposit such amounts in the appropriate

                                      -85-

<PAGE>

Custodial P&I Account for application in accordance with the provisions of the
applicable Administration Disclosure.

             15.7.2. Draws in the Event of Servicer Termination. Notwithstanding
anything to the contrary in this Agreement (including without limitation the
termination or transfer of the servicing rights and/or obligations of the
Servicer pursuant to Article 19 hereof), Wells Fargo Bank, as beneficiary under
the Non-Assigned Letters of Credit, shall continue to make draws thereunder in
accordance with the provisions thereof. Under this provision, in the event a
Pledged Asset Mortgage Loan is ninety days delinquent, the Servicer shall
deliver a copy of the related Letter of Credit to Wells Fargo Bank and shall
notify both the Master Servicer and Wells Fargo Bank that the Pledged Asset
Mortgage Loan is ninety days delinquent. Any funds received from draws on the
Non-Assigned Letters of Credit after Wells Fargo Bank is no longer the Servicer
hereunder shall be remitted by Wells Fargo Bank to the Servicer for deposit into
the related Custodial P&I Account. Under this provision, in the event a Pledged
Asset Mortgage Loan is liquidated or paid in full the Master Servicer shall
notify Wells Fargo Bank in writing.


                                      -86-

<PAGE>

                                   ARTICLE 16

                          Condominium and PUD Insurance

Section 16.1 General Provisions
             ------------------

             16.1.1. Applicability. The provisions of this Article pertain
solely to Mortgage Loans secured by Condominium Units or PUD Units.

             16.1.2. Premiums. The premiums for insurance policies required
pursuant to this Article must be paid as a common expense by the Owners'
Association.

             16.1.3. Deductible Reserves. Funds for each of the deductibles
associated with the insurance policies required pursuant to this Article must be
included in the Owners' Association's reserves and must be so designated.

             16.1.4. Name of Insured. The name of the insured stated under each
Insurance Policy required pursuant to the provisions of this Article must be
similar in form and substance to the following:

             "Association of Owners of the [Name of Condominium
             Project or PUD] for use and benefit of the individual
             Condominium or PUD Unit owners" (designated by name,
             if required).

             16.1.5. Mortgagee Clause. Each insurance policy required pursuant
to the provisions of this Article must contain the standard mortgagee clause
endorsed to provide that any disbursements shall be paid to the Owners'
Association for the use and benefit of Mortgagees as their interests may appear,
or otherwise endorsed to fully protect the interest of (a) the Trustee and (b)
the holders of a beneficial interest therein, if any.

             16.1.6. Reconstruction Coverage. If, with respect to a PUD or
Condominium Project in which a Mortgaged Property is located, there is a
construction code provision that would require changes to undamaged portions of
the PUD or Condominium Project's building(s) even when only part of a building
is destroyed by an insured hazard, then the Servicer must ensure that each
insurance policy required by this Article contains the necessary construction
code endorsements to cover this exposure.

Section 16.2 Common Area Multiple Peril Insurance
             ------------------------------------

             16.2.1. Common Area Multiple Peril Insurance Requirement. The
Servicer must ensure that the Owner's Association maintains, with respect to the
PUD or Condominium Project in which a Mortgaged Property is located, a policy of
Common Area Multiple Peril Insurance, with premiums being paid as a common
expense. The Common Area Multiple Peril Insurance policy must at least protect
against loss or damage by fire and all other hazards that are normally covered
by the standard extended coverage endorsement, and all of the perils customarily

                                      -87-

<PAGE>

covered for similar types of projects, including those covered by the standard
"all risk" endorsement.

             16.2.2. Common Area Multiple Peril Insurance Coverage. As to each
Condominium Project or PUD in which a Mortgaged Property is located, a Common
Area Multiple Peril Insurance policy must cover 100% of the current replacement
cost of all of the common areas (other than the land and foundation), common
elements including fixtures and building service equipment, as well as common
personal property and supplies.

             16.2.3. Common Area Multiple Peril Insurance Deductible. Except as
a greater amount may be required by applicable law, each Common Area Multiple
Peril Insurance deductible may not exceed the lesser of (a) $10,000 or (b) one
percent of the applicable amount of coverage.

             16.2.4. Boiler and Machinery Coverage. If a steam boiler is
operating within the Condominium Project or PUD in which a Mortgaged Property is
located, then the Servicer must ensure that boiler and machinery coverage is in
force at all times. This coverage must be evidenced by the standard form of
boiler and machinery endorsement. The minimum liability coverage per accident
under boiler and machinery coverage must equal the insurable value of the boiler
and equipment and the building housing such boiler or machinery, based upon
current replacement cost, or $2 million, whichever is less.

Section 16.3 Blanket Hazard Insurance
             ------------------------

             16.3.1. Blanket Hazard Insurance Requirement. Unless alternative
coverage is provided pursuant to Section 16.3 hereunder, the Servicer must
verify that each such Mortgaged Property is covered at all times by Hazard
Insurance policy which provides blanket coverage for the individual units in the
Condominium Project or PUD.

             16.3.2. Blanket Hazard Insurance Coverage. As to each Condominium
Project or PUD which contains a Mortgaged Property for which its Hazard
Insurance coverage is provided through a blanket policy, the amount of Hazard
Insurance for a blanket policy a Condominium Project or PUD must be at least
equal to the lesser of (a) the aggregate of the outstanding principal balances
of all mortgage notes secured by units within the Condominium Project or PUD
(including the Mortgage Notes secured by Mortgaged Properties) or (b) 100% of
the replacement cost of the improvements on the Condominium Project or PUD Unit
site.

             16.3.3. Blanket Hazard Insurance Deductible. Except as a greater
amount may be required by an applicable law, each Hazard Insurance deductible
for a blanket policy covering a Condominium Project or PUD may not exceed the
lesser of (a) $10,000 or (b) one percent of the applicable amount of coverage.

Section 16.4 Common Area Comprehensive General Liability (CGL) Insurance
             -----------------------------------------------------------

             16.4.1. Common Area CGL Insurance Requirement. The Servicer must
ensure that the Owners' Association maintains a Comprehensive General Liability
Insurance policy covering all of the common areas, common elements, commercial
spaces and public ways in the Condominium Project or PUD in which a Mortgaged
Property is located.

                                      -88-

<PAGE>

             16.4.2. Common Area CGL Insurance Coverage. As to each Condominium
Project or PUD in which a Mortgaged Property is located, a CGL Insurance policy
should provide coverage of at least $1,000,000 for personal injury, bodily
injury or property damage for any single occurrence. Each CGL Insurance policy
must contain a severability of interest endorsement preventing the insurer from
denying the claim of a Condominium or PUD Unit owner because of negligent acts
of the Owners' Association or other unit owners. Each CGL Insurance policy must
include all other types of coverage and endorsements in the types and amounts
required by private institutional mortgage loan investors for developments
similar in construction, location and use.

Section 16.5 Owners' Association Fidelity Insurance
             --------------------------------------

             16.5.1. Owners' Association Fidelity Insurance Requirement. The
Servicer must ensure that the Owners' Association maintains a fidelity bond or
insurance against dishonest and fraudulent acts on the part of directors,
managers, trustees, employees or volunteers responsible for handling funds
belonging to or administered by the association.

             16.5.2. Owners' Association Fidelity Insurance Coverage. The
Owners' Association fidelity bond or insurance must name the Owners' Association
as the insured and must be written in an amount sufficient to provide protection
at least 150% of the insured's estimated annual operating expenses and reserves.
An appropriate endorsement to the policy to cover any persons who serve without
remuneration must be added if the policy would not otherwise cover volunteers.
Owners' Association fidelity insurance coverage must be in an amount equal to at
least 3 months assessments on all units in the Condominium Project or PUD.
Owners' Association fidelity insurance coverage is not required if the
Condominium Project or the PUD have fewer than 20 units.

Section 16.6 Blanket Flood Insurance
             -----------------------

             16.6.1. Blanket Flood Insurance Requirement. Where a Mortgaged
Property is a Condominium Unit or PUD Unit and is not individually covered by a
Flood Insurance policy in accordance with the provisions of Section 15.4 hereof,
the Servicer must verify that a Flood Insurance policy which provides blanket
coverage for the individual units in the Condominium Project or PUD, is
maintained at all times on Mortgaged Property that are in a special flood hazard
area identified by the Secretary of HUD or the Director of the Federal Emergency
Management Agency.

             16.6.2. Blanket Flood Insurance Coverage. As to each Condominium
Project or PUD which contains a Mortgaged Property for which its Flood Hazard
Insurance coverage is provided through a blanket policy, the amount of Flood
Insurance must be at least equal to the lesser of (a) the maximum amount
available under the National Flood Insurance Program's regular program or the
its emergency program, (b) the aggregate of the outstanding principal balances
of all mortgage notes secured by units within the Condominium Project or PUD
(including the Mortgage Notes secured by Mortgaged Properties), or (c) 100% of
the replacement cost of the improvements on the Condominium Project or PUD Unit
site.

                                      -89-

<PAGE>

             16.6.3. Blanket Flood Insurance Deductible. Except as a greater
amount may be required by applicable law, each Flood Insurance deductible for a
blanket policy covering a Condominium Project or PUD may not exceed the lesser
of (a) $5,000 or (b) one percent of the applicable amount of coverage.


                                      -90-

<PAGE>

                                   ARTICLE 17

                                    Advances

Section 17.1 Principal and Interest Advances
             -------------------------------

             17.1.1. P&I Advance Requirement. The Servicer shall advance P&I
Advances and deposit to the respective Custodial P&I Account on or before each
Remittance Date an amount equal to the aggregate of the difference between (a)
the Monthly Payment that each Borrower was required to pay to the Servicer on
the immediately preceding Due Date (excluding the amount of the related
Servicing Fee) and (b) the amount actually received with respect to the related
Monthly Payment by the Servicer (excluding the amount of the related Servicing
Fee), which deposit may be made in whole or in part from any Amounts Held for
Future Distribution. Any Amount Held for Future Distribution so used shall be
replaced by the Servicer from its own funds by deposit in the Custodial P&I
Account on or before the Business Day preceding any future Remittance Date to
the extent that funds in the Custodial P&I Account on such Remittance Date shall
be less than the amount required to be remitted on such date

The Servicer shall designate on its records the specific Mortgage Loans and
related installments (or portions thereof) as to which such P&I Advance shall be
deemed to have been made, such determination and related reimbursement
allocations pursuant to the following paragraphs being conclusive for purposes
of Section 17.1.3.

             17.1.2. P&I Advance Limitation. The Servicer is required to make
P&I Advances with respect to a Mortgage Loan unless a P&I Advance is reasonably
determined by the Servicer to be eventually non-recoverable from any Insurance
Proceeds, Liquidation Proceeds, or the Borrower.

             17.1.3. P&I Advance Recovery. The Servicer's P&I Advance shall be
recoverable from subsequent Borrower Monthly Payments, Insurance Proceeds,
Liquidation Proceeds related to the Mortgage Loan as to which such P&I Advance
was made or, if the Representing Party is obligated to purchase such Mortgage
Loan from the Trustee, from the price paid for such Mortgage Loan or pursuant to
Section 17.4.

             17.1.4. Advance During Bankruptcy and Foreclosure. During
litigation, bankruptcy proceedings or foreclosure proceedings pertaining to any
Mortgage Loan or while REO transferred to the Trustee through foreclosure or a
deed-in-lieu of foreclosure is held by the Trustee or its successors, the
Servicer must continue to make monthly P&I Advances in respect of each such
Mortgage Loan or REO to the respective Custodial P&I Account. Subject to the
provisions of Section 17.1.2 hereof, these P&I Advances must be made until the
(i) Liquidation of each Mortgage Loan subject to such proceedings or (ii) in the
case of REO transferred to the Trustee through foreclosure or a deed-in-lieu of
foreclosure, the Liquidation of such REO. Advances with respect to REO shall be
made as if the related Mortgage Loan and Mortgage Note remained in effect.

                                      -91-

<PAGE>

Section 17.2 Foreclosure Advances
             --------------------

             17.2.1. Foreclosure Advance Requirement. During foreclosure
proceedings, the Servicer must advance from its own funds all foreclosure
expenses as they occur in accordance with the terms of this Agreement. Such
advances must be made by the Servicer up to the time of final disposition of the
related Mortgaged Property.

             17.2.2. Foreclosure Advance Limitation. The Servicer is required
to make advances pursuant to Section 17.2.1 with respect to a Mortgage Loan
unless the Servicer reasonably determines (i) that such foreclosure will not
increase the proceeds to the Trustee of liquidation of such Mortgage Loan after
reimbursement of the Servicer for its expenses or (ii) that such expenses will
be eventually non-recoverable from any Insurance Proceeds, Liquidation Proceeds
or the Borrower.

             17.2.3. Foreclosure Advance Recovery. If foreclosure proceedings
are terminated, the Servicer must collect all legal fees and costs from the
Borrower. Otherwise, the Servicer's advances for reasonable foreclosure expenses
shall be recoverable from Insurance Proceeds, Liquidation Proceeds or, if the
Representing Party is obligated to purchase a Mortgage Loan from the Trustee,
from the price paid for such Mortgage Loan.

             17.2.4. Foreclosure Advance Records. All foreclosure advances by
the Servicer and reimbursements to the Servicer must be clearly identifiable in
the respective Custodial T & I Account.

Section 17.3 Tax & Insurance Advances
             ------------------------

             17.3.1. T&I Advance Requirement. If a Borrower's Escrow Funds are
insufficient to pay taxes or insurance premiums, the Servicer must advance from
its own funds to the respective Custodial T&I Account an amount sufficient to
cover the shortage and so as to assure the maintenance of a first lien position
of the related Security Instrument on the related Mortgaged Property.

             17.3.2. T&I Advance Recovery. T&I Advances may be recovered from
the Borrower's subsequent monthly escrow payments, Insurance Proceeds,
Liquidation Proceeds or the Borrower, but must never be recovered from scheduled
principal or interest collections. The Servicer may not recover T&I Advances
from another Borrower's Escrow Funds.

             17.3.3. T&I Advance Limitation. The Servicer is required to make a
T&I Advance with respect to a Mortgage Loan unless such T&I Advance is
reasonably determined by the Servicer to be eventually non-recoverable from any
Insurance Proceeds, Liquidation Proceeds, or the Borrower.

             17.3.4. Advance During Bankruptcy and Foreclosure. During
litigation, bankruptcy proceedings or foreclosure proceedings pertaining to any
Mortgage Loan or while REO transferred to the Trustee through foreclosure or a
deed-in-lieu of foreclosure is held by the Trustee, the Servicer must continue
to make required T&I Advances in respect of each such Mortgage Loan or REO to
the respective Custodial T&I Account. These T&I Advances must be made until each
Mortgage Loan subject to such proceedings is liquidated or in the case of REO

                                      -92-

<PAGE>

transferred to the Trustee through foreclosure or a deed-in-lieu of foreclosure
is liquidated. Advances with respect to REO shall be made as if the related
Mortgage Loan and Mortgage Note remained in effect.

Section 17.4 Non-Recoverable Advances
             ------------------------

             17.4.1. Ordinary Recovery. If at any time an advance made by a
Servicer hereunder is determined by the Servicer to be a Non-Recoverable
Advance, then the Servicer shall be entitled to be reimbursed for such advance
by withdrawing from the Custodial P&I Account an amount equal to the
Non-Recoverable Advance.

             17.4.2. Final Recovery. If the amounts on deposit in the related
Custodial P&I Account are insufficient to reimburse the Servicer, then prior to
any distribution to the Trustee, the Servicer shall be entitled to reimbursement
from the payments made and the proceeds received with respect to such Mortgage
Loan.

             17.4.3. Non-Recoverable Advance Determination. To determine
whether an Advance is a Non-Recoverable Advance, the Servicer shall employ a
broker's price opinion, which is no more than twelve months old when so
employed, of the fair market value of the Mortgaged Property related to the
Mortgage Loan which is subject to such Advance, and calculate the difference
between (a) the fair market value of such Mortgaged Property and (b) the sum of
(i) a reasonable estimate of foreclosure costs which may be incurred in the
foreclosure of such Mortgaged Property, and (ii) the amount of unreimbursed
Advances made by the Servicer with respect to the related Mortgage Loan pursuant
to the terms of this Agreement, is greater than zero. If such a difference is
greater than zero, then such difference represents the maximum amount of
additional Advances which the Servicer shall make before determining that any
additional Advances in excess of such amount are Non-Recoverable Advances. If
such difference is negative, then the magnitude of such difference is the amount
of previously made unreimbursed Advances which the Servicer may now regard as
Non-Recoverable Advances. The Servicer shall provide the Master Servicer with an
Officer's certificate upon the determination that any Advance is a
Non-Recoverable Advance.

Section 17.5 Failure to Advance
             ------------------

             17.5.1. Grounds for Termination. The failure of the Servicer to
advance any funds required to be advanced by the Servicer under this Article 17
is cause for termination of Servicer under this Agreement.

             17.5.2. Servicer Reimbursement. To the extent the Master Servicer
or the respective trustee, if any, must advance their respective funds due to
the failure of the Servicer to advance as provided for in this Agreement or to
remit funds to the Certificate Account as required by Section 18.3.1, the
Servicer shall reimburse the advancing party for such amounts, on demand,
together with all costs and expenses incurred by the advancing party, including,
but not limited to, interest on the funds advanced. Such interest shall be
calculated at the lesser of the "prime rate" publicly announced in effect from
time to time at the Reference Bank plus one percentage point and the maximum
interest rate permitted by law.

                                      -93-

<PAGE>

Section 17.6 Rehabilitation Advance
             ----------------------

             17.6.1. Rehabilitation Advance Requirement. The Servicer must
advance from its own funds such amounts as are necessary to restore any damaged
REO not covered by Hazard Insurance or Special Hazard Insurance in accordance
with Section 14.5.

             17.6.2. Rehabilitation Advance Limitation. The Servicer is required
to make advances pursuant to Sections 17.6.1 and 14.5 with respect to a Mortgage
Loan unless the Servicer reasonably determines (i) that such rehabilitation will
not increase the proceeds to the Trustee on liquidation of such Mortgage Loan
after reimbursement of the Servicer for its expenses or (ii) that such expenses
will be eventually non-recoverable from any Insurance Proceeds, Liquidation
Proceeds or the Borrower.

             17.6.3. Rehabilitation Advance Recovery. The Servicer's advances
for reasonable rehabilitation expenses shall be recoverable from Insurance
Proceeds, Liquidation Proceeds, or, if the Representing Party is obligated to
purchase a Mortgage Loan from the Trustee, from the price paid for such Mortgage
Loan.

Section 17.7 PMI Advances
             ------------

             17.7.1. PMI Advance Option. In the event that the Servicer has
recovered all Liquidation Proceeds with respect to a Mortgage Loan other than
any amounts as to which a Primary Mortgage Insurance claim has been made, the
Servicer shall have the option, but not the obligation, to advance the amount of
such claim (a "PMI Advance").

             17.7.2. PMI Advance Recovery. The Servicer's PMI Advance shall be
recoverable from the related Primary Mortgage Insurance proceeds; provided,
however that if such PMI Advance or a portion thereof is eventually determined
to be a Non-Recoverable Advance, the Servicer shall be entitled to reimbursement
pursuant to Section 17.4. Notwithstanding the foregoing, the Servicer shall not
be entitled to reimbursement for a PMI Advance if the amount is not recoverable
from the related Primary Mortgage Insurance proceeds as a result of an action by
the Servicer which violates Section 4.4.2.

                                      -94-

<PAGE>

                                   ARTICLE 18

                             Reporting Requirements

Section 18.1 Monthly Accounting Reports
             --------------------------

             18.1.1. Monthly Accounting Report Requirement. With respect to any
Remittance Date, the period for monthly accounting reports shall be from the
first Business Day of the prior month through the last Business Day of the prior
month, provided that (I) the reporting period for Prepayments in Full,
Curtailments and Partial Liquidation Proceeds shall be from the Determination
Date in the month of such Remittance Date, and (ii) such report shall include
only (a) Monthly Payments received by the Servicer by the close of business on
the Business Day preceding the Determination Date in the month of such
Remittance Date which relate to the Due Date in such month, or in prior months
to the extent not previously remitted and reported, and (b) any P&I Advances
made in respect of such Monthly Payments. With respect to Type 2 Mortgage Loans,
all monthly reports prepared by the Servicer must be complete and must be
received by the Master Servicer by the tenth calendar day of the following
month. With respect to Type 1 Mortgage Loans, all monthly reports prepared by
the Servicer must be complete and must be received by the Master Servicer by the
eighteenth calendar day of the following month. All monthly accounting reports
must show information in, and must be submitted in, a sequence according to
Servicer Loan Number order.

             18.1.2. Monthly Accounting Report Elements. The Servicer shall
forward to the Master Servicer a Monthly Accounting Report setting forth
substantially the information required by FNMA Form 2010.

             The Servicer must also complete and forward to the Master Servicer
any other form or report as provided for in this Agreement, or as reasonably
requested by the Master Servicer.

             18.1.3. Automated Reports. The Servicer may submit to the Master
Servicer for review the Servicer's automated reports which include all of the
information required by the provisions of Section 18.1.2 hereof. Upon approval
by the Master Servicer, the Servicer may submit approved automated reports to
the Master Servicer instead of the Forms listed in Section 18.1.2 hereof.

             18.1.4. Electronic Reporting. With the prior written consent of
the Master Servicer, all reports to be made by the Servicer to the Master
Servicer may be transmitted electronically in lieu of written reporting. If the
Servicer services more than one hundred Mortgage Loans for the Master Servicer,
it shall arrange for electronic transmission of the required reports. Any
expenses occasioned by the electronic transmission of reports shall be borne by
the Servicer.

             18.1.5. Machine Readable Records. At the request of the Master
Servicer, the Servicer shall provide to the Master Servicer, in a mutually
agreed machine readable format, the

                                      -95-

<PAGE>

current names and mailing addresses of each Borrower. The Master Servicer shall
utilize such information solely for audit purposes, or in the event the Servicer
is terminated hereunder.

Section 18.2 Account Reconciliations
             -----------------------

             18.2.1. Reconciliation Preparation. The Servicer shall prepare
reconciliations for each Custodial P&I Account, Custodial T&I Account and
Custodial Buydown Account on a monthly basis and shall forward the same to the
Master Servicer upon request.

             18.2.2. Account Records. Upon request of the Master Servicer, the
Servicer shall also cause the depository for each of the accounts described in
Section 18.2.1 hereof to forward directly to the Master Servicer, copies of all
monthly account statements for the preceding monthly reporting period.

Section 18.3 Monthly Remittance Requirements
             -------------------------------

             18.3.1. Remittance of Funds. On each Remittance Date the Servicer
shall transfer, to the extent not previously transferred as required pursuant to
Section 6.1.3(e), from the funds in (or required hereunder to be in) the
respective Custodial P&I Account as of the close of the Business Day immediately
preceding the Determination Date in the month of such Remittance Date to the
related Certificate Account, the following (other than any Amounts Held for
Future Distribution in respect of such Remittance Date not exceeding the
Threshold Amount and any amounts permitted to be retained by the Servicer or
withdrawn from such account by the Servicer pursuant to the terms of this
Agreement):

             (a) all payments on account of principal (including Prepayments in
     Full and Curtailments received during the Applicable Unscheduled Principal
     Receipt Period) and interest (other than payments of interest related to
     any Unscheduled Principal Receipt as to which the Applicable Unscheduled
     Principal Receipt Period is a Mid-Month Receipt Period received by the
     Servicer on or before the last day of the Applicable Unscheduled Principal
     Receipt Period ending in the month in which such prepayment occurs), all
     net REO Disposition proceeds and proceeds received from any condemnation
     award or proceeds in lieu of condemnation other than that portion of such
     proceeds released to the mortgagor in accordance with the terms of the
     Mortgage Loan Documents or Prudent Servicing Practices;

             (b) all net Liquidation Proceeds, all net Partial Liquidation
     Proceeds and Insurance Proceeds, other than any portion of Insurance
     Proceeds to be applied to the restoration or repair of the related
     Mortgaged Property or released to the Borrower in accordance with the
     requirements of law or Prudent Servicing Practices;

             (c) all P&I Advances made by the Servicer;

             (d) the Purchase Price, or portion thereof, paid for any Mortgage
     Loans or property acquired in respect thereof repurchased or substituted by
     the Servicer or a Representing Party; and

                                      -96-

<PAGE>

             (e) all other amounts required to be deposited in the Custodial P&I
     Account or the Certificate Account pursuant to this Agreement.

             (f) Notwithstanding Section 18.3.1, the Servicer shall be entitled
     to withhold and to pay to itself the applicable Servicing Fee (as adjusted
     pursuant to Section 7.6.1) from any payment on account of interest or other
     recovery (including Net REO Proceeds) as received and prior to deposit of
     such payments in the Certificate Account; provided further that with
     respect to any payment of interest received by the Servicer in respect of a
     Mortgage Loan (whether paid by the Mortgagor or received as Liquidation
     Proceeds, Insurance Proceeds or otherwise) which is less than the full
     amount of interest then due with respect to such Mortgage Loan, only that
     portion of such payment that bears the same relationship to the total
     amount of such payment of interest as the per annum rate used to calculate
     the Servicing Fee, as set forth in Section 4.6, bears to the Mortgage
     Interest Rate borne by such Mortgage Loan shall be allocated to the
     Servicing Fee with respect to such Mortgage Loan.

             18.3.2. Servicer Compensation. The Servicer shall withdraw its
Servicing Fee for each Mortgage Loan net of any Month End Interest payable
pursuant to Section 7.6.1 from the related Custodial P&I Account prior to the
remittance of such amounts to the Certificate Account with all other payments
received with respect to the Mortgage Loans.


                                      -97-

<PAGE>

                                   ARTICLE 19

                     Transfers and Termination of Servicing

Section 19.1 Transfer of Servicing
             ---------------------

             19.1.1. Transfer Prohibition. The Servicer may not sell or
transfer its portfolio serviced hereunder without the prior written consent of
the Master Servicer, which consent cannot be unreasonably withheld. Further, the
Servicer may not subcontract any of its servicing duties, except as set forth in
Section 11.2.1.

             19.1.2. Transfer Request. Any request for sale or transfer of
servicing shall be reviewed on an individual basis. For a request to be
considered, however, the transferor must submit a written request to the Master
Servicer. The transferee must agree to enter into a servicing agreement with the
Master Servicer substantially in the form of this Agreement and must be approved
by the Master Servicer, and, if applicable, any rating agency with respect
Mortgage Loans which are owned by a trust which has issued mortgage-backed
securities, securitized by such Mortgage Loans, which have been rated at the
request of such trust by such rating agency. The Master Servicer must receive
this documentation at least 45 days prior to the requested date of transfer. The
transferor shall be notified in writing of the Master Servicer's approval or
denial. Such transfer shall be denied if the transferee does not meet the
approval requirements of the Master Servicer, or any such rating agency.

             19.1.3. Servicer Liability. The transferor of servicing shall be
liable to the Master Servicer and the Trustee for any servicing obligation
violations that occur before, during, and up to and including the day the
portfolio is actually transferred. The transferee of servicing shall be liable
for any breach of servicing obligations that occurs after the transfer of the
servicing portfolio.

             19.1.4. Master Servicer's Determination. If the transferor and
transferee disagree about liability for violations of representations and
warranties and servicing requirements hereunder, the Master Servicer has the
right, in its reasonable discretion, to determine which party or parties are
liable for such violations.

Section 19.2 Termination of Servicing
             ------------------------

             19.2.1. Grounds for Termination. The Trustee shall have the right
to terminate for cause the servicing privileges of the Servicer under this
Agreement, either with respect to certain Mortgage Loans serviced hereunder or
with respect to all Mortgage Loans serviced hereunder in the event that (i) any
of the following occur, (ii) the Trustee has given the Servicer prior written
notice of the occurrence of such event and (iii) with respect to clauses (a),
(b) or (f) hereof, the Servicer has failed to cure such event within a
reasonable time, which shall in all cases be no less than ninety (90) days:

             (a) the Servicer has breached any material obligation set forth or
     incorporated by reference in this Agreement or the Mortgage Loan Purchase
     Agreement, including,

                                      -98-

<PAGE>

     without limitation, the Servicer's failure to maintain the requisite
     Fidelity Bond and Errors and Omissions Policy in the amounts specified
     herein;

             (b) the Servicer has made one or more false or misleading
     representations or warranties in this Agreement or any Mortgage Loan
     Purchase Agreement, or in any documents relating to the foregoing
     agreements;

             (c) the appointment of a trustee or receiver for the Servicer or
     any of its property;

             (d) the execution by the Servicer of an assignment for the benefit
     of its creditors;

             (e) any material change in the financial status of the Servicer
     that, in the opinion of the Trustee, could materially adversely affect the
     Trustee, or the Servicer's ability to service the Mortgage Loans;

             (f) the Servicer's placement on probation or suspension by a
     federal or state government agency, including, without limitation, FHLMC,
     FNMA or GNMA;

             (g) the Servicer's assignment or attempted assignment of any of its
     interests, rights, or obligations set forth herein without the Master
     Servicer's prior written consent;

             (h) the Servicer has been terminated for cause pursuant to the
     terms of another servicing agreement with the Master Servicer; or

             (i) failure by the Servicer to duly perform, within the required
     time period, its obligations under Section 4.1.3 which failure continues
     unremedied for a period of thirty (30) days after the date on which written
     notice of such failure, requiring the same to be remedied, shall have been
     given to the Servicer by any party to this Agreement or by any master
     servicer responsible for master servicing the Mortgage Loans pursuant to a
     securitization of such Mortgage Loans.

             19.2.2. Trustee Notification. The Master Servicer shall notify the
Trustee of the occurrence of any of the events set forth in Section 19.2.1,
together with the Master Servicer's recommended course of action regarding the
termination of the Servicer.

             19.2.3. Servicer Termination. (a) Following the occurrence of any
of the events set forth in Section 19.2.1, the Trustee may elect, at its
reasonable discretion, to terminate the Servicer under this Agreement with
respect to the Mortgage Loans. The Trustee shall provide a written termination
notice to the Servicer.

             (b) Notwithstanding anything to the contrary in this Agreement, the
     Trustee or, if applicable, the Trust Administrator may terminate the
     Servicer following the occurrence of any of the events set forth in Section
     3.09 of the Pooling and Servicing Agreement, in accordance with the
     procedure for termination set forth therein.

             19.2.4. Consequences of Termination. If this Agreement with the
Servicer is terminated pursuant to Section 19.2.3 hereof, the Servicer shall
deliver all Servicer Mortgage Loan Files, in their entirety, for those Mortgage
Loans serviced under this Agreement, as well as

                                      -99-

<PAGE>

any other documents or reports held by the Servicer concerning such Mortgage
Loans, to the transferee designated by the Trustee and shall assist in the
efficient and timely transfer of the servicing to such transferee. The Servicer
shall not be entitled to compensation for servicing following its termination.

             19.2.5. Effect of Termination. In the event of the termination of
this Agreement, the Servicer is not released from its obligations under this
Agreement. If its servicing is terminated for cause, the Servicer must pay the
expenses of the Trustee incurred in connection with transfer of the servicing
and any actual and direct damages, including, without limitation, actual and
direct damages or losses of the Trustee resulting from such termination.

             19.2.6. Custodial Account Threshold Reduction. In the event that
any of the events specified in clauses (a) through (h) of Section 19.2.1 or in
clauses (g), (h) or (i) of Section 4.1.5 occur, the Master Servicer, in its
reasonable discretion, may notify the Servicer in writing that the applicable
Threshold Amount has been reduced to such amount not less than $1,000 as shall
be specified in such notice.

                                      -100-

<PAGE>

                                   ARTICLE 20

                            Miscellaneous Provisions

Section 20.1 Amendments
             ----------

             20.1.1. Unilateral Authority. The Servicer acknowledges that the
Master Servicer may, upon written notice, supplement or amend the provisions of
this Agreement from time to time, without the need to obtain the Servicer's
consent to (a) correct ambiguous or erroneous provisions in this Agreement; (b)
make changes necessary or helpful to maintain compliance with applicable law;
(c) conform to evolving industry standards regarding the servicing of
residential mortgage loans generally; (d) modify Schedule A to reflect the
purchase of any Mortgage Loan pursuant to this Agreement or another agreement or
to change the applicable loan Type for any Mortgage Loan; (e) to change the
definition of Applicable Unscheduled Receipt Period with respect to any Mortgage
Loan and any type of Unscheduled Principal Receipt from a Mid-Month Receipt
Period to a Prior Month Receipt Period or from a Prior Month Receipt Period to a
Mid-Month Receipt Period; or (f) make such other modifications or amendments
thereto, which the Master Servicer deems advisable, provided that no such
modification or amendment shall have a material adverse impact so as to
materially increase the obligations of, or to materially decrease the benefits
to, the Servicer.

             20.1.2. Consensual Amendment. Except as provided for in Section
20.1.1 hereof, the Master Servicer must obtain the written consent of the
Servicer to any amendment hereto that would either increase materially the
obligations of the Servicer or decrease materially the benefits to the Servicer.

             20.1.3. Trustee Notification. The Trustee shall be provided with
notice of the substance of any amendments or modifications made to this
Servicing Agreement pursuant to the provisions of this Section 20.1.

             20.1.4. Trustee Disapproval. With regard to any proposed
modification or amendment to this Agreement which shall have a material adverse
impact upon the beneficial rights enjoyed hereunder by the Trustee, the Trustee
shall receive written notice of the substance of any proposed amendments or
modifications at least ten business days prior to the proposed date of enactment
of such amendment or modification which shall also state therein the proposed
date of enactment. If the Trustee notifies the Master Servicer in writing, prior
to the proposed date of enactment, of its opposition to the adoption of such an
amendment or modifications, the Master Servicer shall not proceed with such
modification or amendment.

Section 20.2 General Construction
             --------------------

             20.2.1. Binding Nature. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

             20.2.2. Entire Agreement. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes

                                      -101-

<PAGE>

all prior and contemporaneous servicing agreements, understandings, inducements
and conditions, expressed or implied, oral or written, of any nature whatsoever
with respect to the subject matter thereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.

             20.2.3. Governing Law. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement shall be governed by,
construed, interpreted and enforced in accordance with the laws of the State of
New York, notwithstanding any New York or other choice-of-law rules to the
contrary.

             20.2.4. Indulgences Not Waivers. Neither the failure nor any delay
on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege, with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.

             20.2.5. Titles Not to Affect Interpretation. The titles of the
articles and sections contained in this Agreement are for convenience only, and
they neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

             20.2.6. Provisions Severable. The provisions of this Agreement are
independent of and severable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

             20.2.7. Servicer an Independent Contractor. All services, duties
and responsibilities of the Servicer under this Agreement shall be performed and
carried out by the Servicer as an independent contractor, and none of the
provisions of this Agreement shall be deemed to make, authorize or appoint the
Servicer as agent or representative of any Trustee of any Mortgage Loans or of
the Master Servicer.

             20.2.8. Third Party Beneficiary.

             (a) The parties agree that the Trustee and, if applicable, the
     Trust Administrator are intended third party beneficiaries of the
     representations, warranties, covenants and agreements of the Servicer set
     forth in this Agreement. The Trustee shall have full authorization to
     enforce directly against the Servicer any of the obligations of the
     Servicer provided for herein.

             (b) For purposes of this Agreement, including but not limited to
     Section 4.1.3, any Master Servicer shall be considered a third party
     beneficiary to this Agreement entitled to all the rights and benefits
     accruing to any Master Servicer herein as if it were a direct party to this
     Agreement.

                                      -102-

<PAGE>

             20.2.9. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and such counterparts
shall constitute one and the same instrument.


                                      -103-

<PAGE>

             IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the date set forth
above.

                                        WELLS FARGO BANK, N.A.
                                         as Servicer


                                        By:
                                           ------------------------------------
                                           Name:  Patrick Greene
                                           Title: Vice President

                                        WELLS FARGO BANK, N.A.
                                         as Master Servicer


                                        By:
                                           ------------------------------------
                                           Name:  William B. Hill III
                                           Title: Vice President


                                      -104-

<PAGE>

                                   SCHEDULE A
                                   ----------

                             Mortgage Loan Schedule
                             ----------------------

                               Cut-Off Date
              Cut-Off Date      Regarding
   Master        Unpaid      initial coverage
  Servicer      Principal       under this      Servicing Fee   Loan
Loan Number      Balance         Agreement       Percentage     Type   Custodian
-----------   ------------   ----------------   -------------   ----   ---------



                                       I-1

<PAGE>

                                                                       EXHIBIT A
                                                                       ---------
                     WELLS FARGO & COMPANY MASTER GUARANTEE
                 AGREEMENT REGARDING CUSTODIAL P&I ACCOUNT FUNDS

     THIS MASTER GUARANTEE AGREEMENT (the "Guarantee") dated as of May 1, 1999
is entered into by Wells Fargo & Company ("Wells Fargo"), a Delaware
corporation, in favor of each trustee now or hereafter acting in such capacity
for the benefit of the certificateholders of each outstanding and future series
of Wells Fargo Asset Securities Corporation mortgage backed securities
transactions (collectively, the "MBS Transactions"), including without
limitation the trustees identified in Paragraph 8 hereof, and any successor
trustee, all of which trustees are referred collectively in this Guarantee as
the "Trustee".

     WHEREAS, this Guarantee has been required by Standard & Poor's, Fitch,
Inc., Duff & Phelps Credit Rating Co. and Moody's Investors Service, Inc.
(collectively, the "Rating Agencies") (each of which has assigned ratings to
certain of the classes issued in certain of the MBS Transactions) in connection
with their agreement to permit Wells Fargo Bank, N.A., as servicer in the MBS
Transactions (in such capacity, "Servicer"), to hold among Servicer's general
corporate funds for a period of time principal and interest payments, insurance
proceeds, liquidation proceeds and other amounts received by Servicer pertaining
to the mortgage loans underlying the MBS Transactions serviced by Servicer
(collectively, the "Mortgage Loans").

     WHEREAS, Servicer is an indirect, wholly-owned subsidiary of Wells Fargo, a
bank holding company, and Wells Fargo derives substantial benefit from
Servicer's servicing of the Mortgage Loans pursuant to the terms of a separate
servicing agreement between Wells Fargo Bank, N.A., as master servicer, and
Servicer, as servicer, for each MBS Transaction (each, a "Servicing Agreement").

     WHEREAS, to further induce the Rating Agencies to permit Servicer to
withdraw funds from the Custodial P&I Accounts and commingle such funds with the
general assets of Servicer to be used for general corporate purposes until such
time as such funds are required by the terms of the applicable Servicing
Agreement to be remitted to the related Certificate Account, Wells Fargo has
agreed to guarantee the performance of Servicer's obligation under the Servicing
Agreements to timely remit to the related Certificate Accounts the amounts, if
any, so withdrawn from the Custodial P&I Accounts and so used by Servicer.

     NOW THEREFORE, in consideration of the Rating Agencies' permitting the
described arrangement, and for other good and valuable consideration the receipt
and sufficiency of which Wells Fargo hereby acknowledges, Wells Fargo hereby
agrees for the benefit of each Trustee for the benefit of the certificateholders
of each MBS Transaction as follows:

1.   Defined Terms. Capitalized terms used but not defined in this Guarantee
     shall have the respective meanings ascribed to such terms in each Servicing
     Agreement.

2.   Guarantee of Certain Obligation of Servicer under Servicing Agreement.
     Wells Fargo hereby absolutely, unconditionally and irrevocably guarantees
     to each Trustee for the benefit of the certificateholders of each MBS
     Transaction the full and

                                       A-1

<PAGE>

     prompt performance, satisfaction and discharge of Servicer's obligation
     under each Servicing Agreement to remit to the related Certificate Account
     by the time specified in each Servicing Agreement amounts, if any,
     withdrawn by the Servicer from the related Custodial P&I Account and
     commingled with the Servicer's general assets (such obligation, the
     "Servicer's Obligation").

3.   Guarantee Absolute. The liability of Wells Fargo under this Guarantee shall
     be absolute and unconditional irrespective of: (i) any change in the time,
     manner of place of performance of, or in any other term of, the Servicer's
     Obligation; (ii) the avoidance or subordination of any Servicer's
     Obligation, or the invalidity or unenforceability thereof; (iii) the
     waiver, consent, extension, forbearance or granting of any indulgence, or
     other modification or amendment to any obligation of Servicer under the
     Servicing Agreement; including without limitation the Servicer's
     Obligation; (iv) the disallowance under bankruptcy or similar laws relating
     to insolvency applicable to Servicer of all or any portion of any claim by
     the Trustee or certificate holders for the performance, satisfaction, and
     discharge of the Servicer's Obligation; or (v) any other circumstance that
     might otherwise constitute a defense to, or a discharge of the Servicer's
     Obligation (except for an express written release or discharge of Servicer
     by the Trustee), all of the foregoing being expressly waived by Wells Fargo
     as defenses to its obligations under this Guarantee.

4.   Waiver. Wells Fargo hereby waives any requirement of promptness, diligence,
     presentment, demand, filing of claims with a court in the event of
     receivership or bankruptcy of Servicer, protest, or notice of protest with
     respect to the Servicer's Obligation, and notice of acceptance of this
     Guarantee.

5.   Reinstatement. Guarantor further agrees that, to the extent that the
     Servicer or the Guarantor makes a payment or payments to the Trustee, which
     payment or payments or any part thereof are subsequently invalidated,
     declared to be fraudulent or preferential, set aside and/or required to be
     repaid to the Servicer or the Guarantor or their respective estate,
     trustee, receiver or any other party under any bankruptcy law, state or
     federal law, common law or equitable cause, then to the extent of such
     payment or repayment, this Guarantee and the advances or part thereof which
     have been paid, reduced or satisfied by such amount shall be reinstated and
     continued in full force and effect as of the date such initial payments,
     reduction or satisfaction occurred.

6.   No Waiver of Rights. No failure or delay on the part of the Trustee or the
     Trust Administrator, if applicable, in exercising any right or remedy
     arising under this Guarantee shall operate as a waiver of the Trustee's
     rights hereunder; nor shall any single or partial exercise of any right
     hereunder preclude any other or further exercise hereunder or the exercise
     of any other right by or on behalf of the Trustee.

7.   Representation and Warranties. Wells Fargo hereby represents and warrants
     to the Trustee as follows:

                                       A-2

<PAGE>

     (a)  Organization. Wells Fargo is a corporation duly organized, validly
          existing and in good standing under the laws of the State of Delaware.
          Wells Fargo is duly qualified and in good standing to transact
          business in each jurisdiction in which such qualification is
          necessary, other than those jurisdictions where the failure to be so
          qualified would not have a material adverse effect upon the business,
          assets or financial condition of Wells Fargo.

     (b)  Authority. Wells Fargo has all requisite corporate power and authority
          to execute and enter into this Guarantee and to perform the
          obligations required of it hereunder. The execution and delivery of
          this Guarantee and the consummation of the undertakings contemplated
          hereby, have each been duly and validly authorized by all necessary
          corporate action, and this Guarantee constitutes a valid and legally
          binding agreement of Wells Fargo enforceable in accordance with its
          terms, except as such enforcement may be limited by applicable
          bankruptcy, moratorium, reorganization or other laws and regulations
          affecting the rights and remedies of creditors generally.

     (c)  No Conflicts. The execution, delivery, and performance of this
          Guarantee by Wells Fargo will not constitute (a) a violation or breach
          of any terms or provisions of Wells Fargo's Restated Certificate of
          Incorporation or by-laws or (b) a violation or breach of any terms or
          provisions of, or a default under any provision of statutory law or
          published regulation or any indenture, mortgage, deed of trust, loan
          agreement or other agreement or instrument to which Wells Fargo is a
          party or by which Wells Fargo is bound, or any order, rule or
          regulation binding on Wells Fargo and known to Wells Fargo of any
          court or governmental agency or body having jurisdiction over Wells
          Fargo.

8.   Notices. All notices and other communications hereunder shall be in writing
     (including a writing delivered by facsimile transmission) and shall be
     deemed to have been duly given (a) when delivered, if sent by registered or
     certified mail (return receipt requested), or (b) when delivered, if
     delivered personally or by facsimile, or (c) on the following business day,
     if sent by overnight mail or overnight courier, in each case to Wells Fargo
     and the Trustee at the following addresses (or at such other addresses as
     shall be specified by like notice):

     If to Wells Fargo :

          Corporate Secretary
          Wells Fargo & Company
          Wells Fargo Center
          Sixth and Marquette
          Minneapolis, MN 55479-1026
          Facsimile No.: 612-667-6082

                                       A-3

<PAGE>

          With a copy to:

               Corporate Treasury
               Wells Fargo & Company
               Wells Fargo Center
               Sixth and Marquette
               Minneapolis, MN 55479-1019
               Facsimile No.: 612-667-9908

     If to the Trustee, to one of the following, as applicable for a given MBS
     Transaction:

     (a)  Wachovia Bank, National Association, as Trustee
          401 South Tryon Street
          Charlotte, North Carolina 28202

                    or

     (b)  United States Trust Company of New York, as Trustee
          114 West 47/th/ Street
          New York, New York 10036

          With a copy to:

               Wachovia Bank, National Association, as Trust Administrator
               401 South Tryon Street
               Charlotte, North Carolina 28202

                    or

     (c)  Firstar Trust Company, as Trustee
          555 North River Center Drive, Suite 301
          Milwaukee, Wisconsin 53212

          With a copy to:

               Wachovia Bank, National Association, as Trust Administrator
               410 South Tryon Street
               Charlotte, North Carolina 28202

                    or
     (d)  Firstar Trust Company, as Trustee
          1555 North River Center Drive, Suite 301
          Milwaukee, Wisconsin 53212

          With a copy to:

               US Bank Trust National Association, as Trust Administrator
               180 East Fifth Street
               St. Paul, Minnesota 55101

                                       A-4

<PAGE>

                    or

     (e)  US Bank Trust National Association, as Trustee
          180 East Fifth Street
          St. Paul, Minnesota 55101

     or to such other address to receive any such confirmation or notice as the
     notice party may have designated by written notice to the other notice
     party at the above address.

9.   Successors and Assigns. This Guarantee shall be binding upon Wells Fargo,
     its successors, transferees, and assigns, and shall inure to the benefit of
     and be enforceable by the Trustee and its successors, transferees and
     assigns.

10.  Waiver of Subrogation. As long as any Servicer's Obligation has not been
     satisfied and discharged in full, Wells Fargo shall have no right of
     subrogation and hereby waives any right to enforce any remedy which the
     Trustee now has or may hereafter have against Servicer or any other
     guarantor of all or any part of the Servicer's Obligation.

11.  Subordination. Wells Fargo agrees that any and all claims of Wells Fargo
     against Servicer or any other guarantor of all or any part of the
     Servicer's Obligation, whether arising by reason of any payment by Wells
     Fargo pursuant to the provisions hereof or otherwise, and all indebtedness
     of Servicer to Wells Fargo, shall be subordinate and subject in right of
     payment to the full and prompt performance, satisfaction, and discharge, of
     Servicer's Obligation.

12.  Entire Agreement; Amendment and Waivers. This Guarantee contains the
     complete and entire agreement of Wells Fargo with respect to its
     provisions, and no change, waiver or amendment hereto shall be binding upon
     Wells except as separately set forth in a writing and duly executed by
     Wells Fargo.

13.  Severability. The invalidity, illegality, or unenforceability of any
     provision of this Guarantee pursuant to judicial decree shall not affect
     the validity, legality, or enforceability of any other provisions of this
     Guarantee, all of which other provisions shall remain in full force and
     effect as written.

14.  Governing Law. This Guarantee shall be governed by and construed in
     accordance with the laws of the State of New York (regardless of the laws
     that might otherwise govern under applicable principles of conflicts of law
     or comity).

                                       A-5

<PAGE>

     IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the
Guarantor, has executed this Guarantee on behalf of the Guarantor as of the day
and year first written above.

                                        WELLS FARGO & COMPANY


                                        By
                                           -------------------------------------
                                           Rodney L. Jacobs
                                           Its Chief Financial Officer


                                       A-6