<PAGE>
                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                                    Depositor

                          WILSHIRE CREDIT CORPORATION,
                                    Servicer

                                       and

                             WELLS FARGO BANK, N.A.
                                     Trustee

                                   ----------

                         POOLING AND SERVICING AGREEMENT
                          Dated as of November 1, 2005

                                   ----------

                     MERRILL LYNCH MORTGAGE INVESTORS TRUST,
            MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-HE2

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
ARTICLE I DEFINITIONS....................................................................................      9

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..................................     53
   SECTION 2.01.  Conveyance of Mortgage Loans...........................................................     53
   SECTION 2.02.  Acceptance by the Trustee of the Mortgage Loans........................................     56
   SECTION 2.03.  Representations, Warranties and Covenants of the Depositor.............................     57
   SECTION 2.04.  Representations and Warranties of the Servicer.........................................     61
   SECTION 2.05.  Substitutions and Repurchases of Mortgage Loans which are not "Qualified Mortgages"....     62
   SECTION 2.06.  Authentication and Delivery of Certificates............................................     63
   SECTION 2.07.  REMIC Elections........................................................................     63
   SECTION 2.08.  [RESERVED].............................................................................     67
   SECTION 2.09.  Covenants of the Servicer..............................................................     67
   SECTION 2.10.  [RESERVED].............................................................................     67
   SECTION 2.11.  Permitted Activities of the Trust......................................................     67
   SECTION 2.12.  Qualifying Special Purpose Entity......................................................     67

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...............................................     68
   SECTION 3.01.  Servicer to Service Mortgage Loans.....................................................     68
   SECTION 3.02.  Servicing and Subservicing; Enforcement of the Obligations of Servicer.................     69
   SECTION 3.03.  Rights of the Depositor and the Trustee in Respect of the Servicer.....................     70
   SECTION 3.04.  Trustee to Act as Servicer.............................................................     70
   SECTION 3.05.  Collection of Mortgage Loan Payments; Collection Account; Certificate Account..........     71
   SECTION 3.06.  Collection of Taxes, Assessments and Similar Items; Escrow Accounts....................     74
   SECTION 3.07.  Access to Certain Documentation and Information Regarding the Mortgage Loans...........     74
   SECTION 3.08.  Permitted Withdrawals from the Collection Account and Certificate Account..............     75
   SECTION 3.09.  [RESERVED].............................................................................     77
</TABLE>


                                       -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
   SECTION 3.10.  Maintenance of Hazard Insurance........................................................     77
   SECTION 3.11.  Enforcement of Due-On-Sale Clauses; Assumption Agreements..............................     78
   SECTION 3.12.  Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds; Special
                     Loss Mitigation.....................................................................     79
   SECTION 3.13.  Trustee to Cooperate; Release of Mortgage Files........................................     81
   SECTION 3.14.  Documents, Records and Funds in Possession of Servicer to be Held for the Trustee......     83
   SECTION 3.15.  Servicing Compensation.................................................................     83
   SECTION 3.16.  Access to Certain Documentation........................................................     83
   SECTION 3.17.  Annual Statement as to Compliance......................................................     84
   SECTION 3.18.  Annual Independent Public Accountants' Servicing Statement; Financial Statements.......     84
   SECTION 3.19.  [RESERVED].............................................................................     84
   SECTION 3.20.  Periodic Filings.......................................................................     84
   SECTION 3.21.  Annual Certificate by Trustee..........................................................     85
   SECTION 3.22.  Annual Certificate by Servicer.........................................................     85
   SECTION 3.23.  Prepayment Charge Reporting Requirements...............................................     86
   SECTION 3.24.  Information to the Trustee.............................................................     86
   SECTION 3.25.  Indemnification........................................................................     86
   SECTION 3.26.  Nonsolicitation........................................................................     87
   SECTION 3.27.  High Cost Mortgage Loans...............................................................     87
   SECTION 3.28.  MI Policies, Claims Under the MI Policies..............................................     87

ARTICLE IV DISTRIBUTIONS.................................................................................     88
   SECTION 4.01.  Advances...............................................................................     88
   SECTION 4.02.  Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls..     89
   SECTION 4.03.  Distributions on the REMIC Interests...................................................     89
   SECTION 4.04.  Distributions..........................................................................     89
   SECTION 4.05.  Monthly Statements to Certificateholders...............................................     97

ARTICLE V THE CERTIFICATES...............................................................................    100
   SECTION 5.01.  The Certificates.......................................................................    100
</TABLE>


                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
   SECTION 5.02.  Certificate Register; Registration of Transfer and Exchange of Certificates............    101
   SECTION 5.03.  Mutilated, Destroyed, Lost or Stolen Certificates......................................    105
   SECTION 5.04.  Persons Deemed Owners..................................................................    106
   SECTION 5.05.  Access to List of Certificateholders' Names and Addresses..............................    106
   SECTION 5.06.  Book-Entry Certificates................................................................    106
   SECTION 5.07.  Notices to Depository..................................................................    107
   SECTION 5.08.  Definitive Certificates................................................................    107
   SECTION 5.09.  Maintenance of Office or Agency........................................................    108
   SECTION 5.10.  [RESERVED].............................................................................    108

ARTICLE VI THE DEPOSITOR AND THE SERVICER................................................................    108
   SECTION 6.01.  Respective Liabilities of the Depositor and the Servicer...............................    108
   SECTION 6.02.  Merger or Consolidation of the Depositor and the Servicer..............................    108
   SECTION 6.03.  Limitation on Liability of the Depositor, the Servicer and Others......................    108
   SECTION 6.04.  Limitation on Resignation of Servicer..................................................    109
   SECTION 6.05.  Errors and Omissions Insurance; Fidelity Bonds.........................................    109

ARTICLE VII DEFAULT; TERMINATION OF SERVICER.............................................................    109
   SECTION 7.01.  Events of Default......................................................................    109
   SECTION 7.02.  Trustee to Act; Appointment of Successor...............................................    111
   SECTION 7.03.  Notification to Certificateholders.....................................................    112

ARTICLE VIII CONCERNING The Trustee......................................................................    112
   SECTION 8.01.  Duties of the Trustee..................................................................    112
   SECTION 8.02.  Certain Matters Affecting the Trustee..................................................    113
   SECTION 8.03.  Trustee Not Liable for Certificates or Mortgage Loans..................................    115
   SECTION 8.04.  Trustee May Own Certificates...........................................................    115
   SECTION 8.05.  Trustee's Fees and Expenses............................................................    115
   SECTION 8.06.  Indemnification and Expenses of Trustee................................................    115
   SECTION 8.07.  Eligibility Requirements for Trustee...................................................    116
   SECTION 8.08.  Resignation and Removal of Trustee.....................................................    116
   SECTION 8.09.  Successor Trustee......................................................................    117
</TABLE>


                                      -iii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
   SECTION 8.10.  Merger or Consolidation of Trustee.....................................................    118
   SECTION 8.11.  Appointment of Co-Trustee or Separate Trustee..........................................    118
   SECTION 8.12.  Tax Matters............................................................................    119

ARTICLE IX TERMINATION...................................................................................    121
   SECTION 9.01.  Termination upon Liquidation or Repurchase of all Mortgage Loans.......................    121
   SECTION 9.02.  Final Distribution on the Certificates.................................................    122
   SECTION 9.03.  Additional Termination Requirements....................................................    123

ARTICLE X MISCELLANEOUS PROVISIONS.......................................................................    124
   SECTION 10.01. Amendment..............................................................................    124
   SECTION 10.02. Counterparts...........................................................................    126
   SECTION 10.03. Governing Law..........................................................................    126
   SECTION 10.04. Intention of Parties...................................................................    126
   SECTION 10.05. Notices................................................................................    126
   SECTION 10.06. Severability of Provisions.............................................................    127
   SECTION 10.07. Assignment.............................................................................    128
   SECTION 10.08. Limitation on Rights of Certificateholders.............................................    129
   SECTION 10.09. Inspection and Audit Rights............................................................    129
   SECTION 10.10. Certificates Nonassessable and Fully Paid..............................................    130
   SECTION 10.11. Third Party Rights.....................................................................    130
</TABLE>


                                      -iv-

<PAGE>

EXHIBIT A     FORMS OF CERTIFICATES
EXHIBIT B-1   MORTGAGE LOAN SCHEDULE - MORTGAGE POOL
EXHIBIT B-2   MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS
EXHIBIT B-3   MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS
EXHIBIT B-4   MORTGAGE LOAN SCHEDULE - MI MORTGAGE LOANS
EXHIBIT C     [RESERVED]
EXHIBIT D     FORM OF CUSTODIAN CERTIFICATION
EXHIBIT E-1   FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2   FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F     FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G     FORM OF INVESTMENT LETTER (ACCREDITED INVESTOR)
EXHIBIT H     FORM OF RULE 144A LETTER (QUALIFIED INSTITUTIONAL BUYER)
EXHIBIT I     FORM OF REQUEST FOR RELEASE
EXHIBIT J-1   MLMC LIST OF TRANSFER AGREEMENTS AND BRINGDOWN LETTERS
EXHIBIT J-2   MLML LIST OF TRANSFER AGREEMENTS AND BRINGDOWN LETTERS
EXHIBIT K     FORM OF OFFICER'S CERTIFICATE OF TRUSTEE
EXHIBIT L     FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M-1   [RESERVED]
EXHIBIT M-2   FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT N     FORM OF CAP CONTRACT
EXHIBIT O     ONE-MONTH LIBOR CAP TABLE - CAP CONTRACT
EXHIBIT P     FORM OF MI POLICY
EXHIBIT Q     FORM OF SWAP AGREEMENT

<PAGE>

          POOLING AND SERVICING AGREEMENT (the "Agreement"), dated as of
November 1, 2005, among MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware
corporation, as depositor (the "Depositor"), WILSHIRE CREDIT CORPORATION, a
Nevada corporation, as servicer (the "Servicer") and WELLS FARGO BANK, N.A, a
national banking association, as trustee (the "Trustee").

          The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of (i) three real estate mortgage investment conduits,
(ii) the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b) hereof, (iii) the Cap Contract and the Cap Contract
Account, (iv) the grantor trusts described in Section 2.07 hereof and (v) the
Supplemental Interest Trust, which in turn will hold the Swap Agreement. The
SWAP REMIC will consist of all of the assets constituting the Trust Fund (other
than the assets described in clauses (ii), (iii), (iv) and (v) above, other than
the SWAP REMIC Regular Interests and other than the Lower Tier REMIC Regular
Interests) and will be evidenced by the SWAP REMIC Regular Interests (which will
be uncertificated and will represent the "regular interests" in the SWAP REMIC)
and the Class SWR Interest as the single "residual interest" in the SWAP REMIC.
The Lower Tier REMIC will consist of the SWAP REMIC Regular Interests and will
be evidenced by the Lower Tier REMIC Regular Interests (which will be
uncertificated and will represent the "regular interests" in the Lower Tier
REMIC) and the Class LTR Interest as the single "residual interest" in the Lower
Tier REMIC. The Trustee will hold the Lower Tier REMIC Regular Interests. The
Upper Tier REMIC will consist of the Lower Tier REMIC Regular Interests and will
be evidenced by the REMIC Regular Interests (which will represent the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as the single
"residual interest" in the Upper Tier REMIC. The Class R Certificate will
represent beneficial ownership of the Class SWR Interest, the Class LTR Interest
and the Residual Interest. The "latest possible maturity date" for federal
income tax purposes of all interests created hereby will be the Latest Possible
Maturity Date.

          All covenants and agreements made by the Sellers in the Sale
Agreements and by the Depositor and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust Fund are for the
benefit of the Holders from time to time of the Certificates.

THE SWAP REMIC

The following table sets forth the designations, initial principal balances and
interest rates for each interest in the SWAP REMIC:

<TABLE>
<CAPTION>
Class    Initial Principal Balance   Interest Rate
-----    -------------------------   -------------
<S>      <C>                         <C>
SW-Z          $187,916,015.66             (1)
SW-9A         $ 12,634,012.50             (2)
SW-9B         $ 12,634,012.50             (3)
SW-10A        $ 11,752,994.00             (2)
SW-10B        $ 11,752,994.00             (3)
SW-11A        $ 11,081,938.50             (2)
SW-11B        $ 11,081,938.50             (3)
SW-12A        $ 10,122,691.00             (2)
SW-12B        $ 10,122,691.00             (3)
SW-13A        $  9,711,004.50             (2)
SW-13B        $  9,711,004.50             (3)
</TABLE>

<PAGE>

<TABLE>
<S>      <C>                         <C>
SW-14A        $  8,634,647.50             (2)
SW-14B        $  8,634,647.50             (3)
SW-15A        $  7,903,913.00             (2)
SW-15B        $  7,903,913.00             (3)
SW-16A        $  8,696,401.00             (2)
SW-16B        $  8,696,401.00             (3)
SW-17A        $ 12,180,829.50             (2)
SW-17B        $ 12,180,829.50             (3)
SW-18A        $ 16,817,207.00             (2)
SW-18B        $ 16,817,207.00             (3)
SW-19A        $ 21,328,436.50             (2)
SW-19B        $ 21,328,436.50             (3)
SW-20A        $ 19,846,963.00             (2)
SW-20B        $ 19,846,963.00             (3)
SW-21A        $ 12,798,630.00             (2)
SW-21B        $ 12,798,630.00             (3)
SW-22A        $  7,689,271.00             (2)
SW-22B        $  7,689,271.00             (3)
SW-23A        $  6,334,573.00             (2)
SW-23B        $  6,334,573.00             (3)
SW-24A        $  5,779,395.00             (2)
SW-24B        $  5,779,395.00             (3)
SW-25A        $ 40,190,163.50             (2)
SW-25B        $ 40,190,163.50             (3)
SW-26A        $  1,513,602.50             (2)
SW-26B        $  1,513,602.50             (3)
SW-27A        $  1,567,042.00             (2)
SW-27B        $  1,567,042.00             (3)
SW-28A        $  2,238,544.00             (2)
SW-28B        $  2,238,544.00             (3)
SW-29A        $  3,628,217.00             (2)
SW-29B        $  3,628,217.00             (3)
SW-30A        $  3,914,108.00             (2)
SW-30B        $  3,914,108.00             (3)
SW-31A        $  3,178,464.50             (2)
SW-31B        $  3,178,464.50             (3)
SW-32A        $  3,177,142.00             (2)
SW-32B        $  3,177,142.00             (3)
SW-33A        $  3,095,463.00             (2)
SW-33B        $  3,095,463.00             (3)
SW-34A        $  2,241,772.00             (2)
SW-34B        $  2,241,772.00             (3)
SW-35A        $  1,368,015.00             (2)
SW-35B        $  1,368,015.00             (3)
SW-36A        $  1,087,760.50             (2)
SW-36B        $  1,087,760.50             (3)
SW-37A        $  4,620,915.50             (2)
SW-37B        $  4,620,915.50             (3)
</TABLE>


                                      -2-

<PAGE>

<TABLE>
<S>      <C>                         <C>
SW-38A        $    424,214.00             (2)
SW-38B        $    424,214.00             (3)
SW-39A        $    407,550.50             (2)
SW-39B        $    407,550.50             (3)
SW-40A        $    391,891.00             (2)
SW-40B        $    391,891.00             (3)
SW-41A        $    376,837.00             (2)
SW-41B        $    376,837.00             (3)
SW-42A        $    362,363.00             (2)
SW-42B        $    362,363.00             (3)
SW-43A        $    348,449.00             (2)
SW-43B        $    348,449.00             (3)
SW-44A        $    335,071.00             (2)
SW-44B        $    335,071.00             (3)
SW-45A        $    322,210.00             (2)
SW-45B        $    322,210.00             (3)
SW-46A        $    309,845.00             (2)
SW-46B        $    309,845.00             (3)
SW-47A        $    297,956.50             (2)
SW-47B        $    297,956.50             (3)
SW-48A        $    286,527.00             (2)
SW-48B        $    286,527.00             (3)
SW-49A        $    275,538.00             (2)
SW-49B        $    275,538.00             (3)
SW-50A        $    275,252.50             (2)
SW-50B        $    275,252.50             (3)
SW-51A        $    262,728.00             (2)
SW-51B        $    262,728.00             (3)
SW-52A        $    263,563.00             (2)
SW-52B        $    263,563.00             (3)
SW-53A        $    245,084.50             (2)
SW-53B        $    245,084.50             (3)
SW-54A        $    234,710.00             (2)
SW-54B        $    234,710.00             (3)
SW-55A        $    218,469.50             (2)
SW-55B        $    218,469.50             (3)
SW-56A        $    210,714.50             (2)
SW-56B        $    210,714.50             (3)
SW-57A        $    202,580.00             (2)
SW-57B        $    202,580.00             (3)
SW-58A        $    194,659.00             (2)
SW-58B        $    194,659.00             (3)
SW-59A        $    187,041.50             (2)
SW-59B        $    187,041.50             (3)
SW-60A        $  4,651,122.50             (2)
SW-60B        $  4,651,122.50             (3)
SWR                        (4)            (4)
</TABLE>


                                      -3-

<PAGE>

(1)  The interest rate on the Class SW-Z Interest shall be a per annum rate
     equal to the Net WAC.

(2)  For any Distribution Date, the interest rate on each SWAP REMIC Regular
     Interest ending with the designation "A" shall be a per annum rate equal to
     2 times the Net WAC, subject to a maximum rate of 2 times the REMIC Swap
     Rate for such Distribution Date.

(3)  For any Distribution Date, the interest rate on each SWAP REMIC Regular
     Interest ending with the designation "B" shall be a per annum rate equal to
     the greater of (x) the excess, if any, of (i) 2 times the Net WAC over (ii)
     2 times the REMIC Swap Rate for such Distribution Date and (y) 0.00%.

(4)  The Class SWR Interest shall have no principal amount and shall bear no
     interest.

LOWER TIER REMIC

The following table sets forth the designations, initial principal balances and
interest rates for each interest in Lower Tier REMIC:

<TABLE>
<CAPTION>
Class    Initial Principal Balance   Interest Rate
-----    -------------------------   -------------
<S>      <C>                         <C>
LTA-1A              (1)                   (3)
LTA-1B              (1)                   (3)
LTA-2A              (1)                   (3)
LTA-2B              (1)                   (3)
LTA-2C              (1)                   (3)
LTM-1               (1)                   (3)
LTM-2               (1)                   (3)
LTM-3               (1)                   (3)
LTM-4               (1)                   (3)
LTM-5               (1)                   (3)
LTM-6               (1)                   (3)
LTB-1               (1)                   (3)
LTB-2               (1)                   (3)
LTB-3               (1)                   (3)
LTX                 (2)                   (3)
LT-IO               (4)                   (4)
LTR                 (5)                   (5)
</TABLE>

(1)  The initial principal balance of each of these Lower Tier REMIC Regular
     Interests shall equal 1/2 of the initial principal balance of its Related
     Certificates.

(2)  The initial principal balance of the Class LTX Interest shall equal the
     excess of (i) the aggregate Cut-off Date Principal Balance of the Mortgage
     Loans over (ii) the aggregate initial principal balance of the Lower Tier
     REMIC Marker Classes.

(3)  For each Distribution Date, the interest rate for each of the Lower Tier
     REMIC Regular Interests (other than the Class LT-IO Interest) shall be a
     per annum rate (but not less than zero) equal to the product of (i) the
     weighted average of the interest rates on the SWAP REMIC Regular Interests
     for such Distribution Date and (ii) a fraction the numerator of which is 30
     and the denominator of which is the


                                      -4-

<PAGE>

actual number of days in the Accrual Period for the Lower Tier REMIC Interests,
provided however, that for any Distribution Date on which the Class LT-IO
Interest is entitled to a portion of interest accruals on a SWAP REMIC Regular
Interest ending with a designation "A" as described in footnote 4 below, such
weighted average shall be computed by first subjecting the rate on such SWAP
REMIC Regular Interest to a cap equal to Swap LIBOR for such Distribution Date.

(4) The Class LT-IO Interest is an interest-only class that does not have a
principal balance. For only those Distribution Dates listed in the first column
of the table below, the Class LT-IO Interest shall be entitled to interest
accrued on the SWAP REMIC Regular Interest listed in the second column below at
a per annum rate equal to the excess, if any, of (i) the interest rate for such
SWAP REMIC Regular Interest for such Distribution Date over (ii) Swap LIBOR for
such Distribution Date.

<TABLE>
<CAPTION>
Distribution Date   SWAP REMIC Regular Interest
-----------------   ---------------------------
<S>                 <C>
9                   Class SW-9A
9-10                Class SW-10A
9-11                Class SW-11A
9-12                Class SW-12A
9-13                Class SW-13A
9-14                Class SW-14A
9-15                Class SW-15A
9-16                Class SW-16A
9-17                Class SW-17A
9-18                Class SW-18A
9-19                Class SW-19A
9-20                Class SW-20A
9-21                Class SW-21A
9-22                Class SW-22A
9-23                Class SW-23A
9-24                Class SW-24A
9-25                Class SW-25A
9-26                Class SW-26A
</TABLE>


                                       -5-

<PAGE>

<TABLE>
<S>                 <C>
9-27                Class SW-27A
9-28                Class SW-28A
9-29                Class SW-29A
9-30                Class SW-30A
9-31                Class SW-31A
9-32                Class SW-32A
9-33                Class SW-33A
9-34                Class SW-34A
9-35                Class SW-35A
9-36                Class SW-36A
9-37                Class SW-37A
9-38                Class SW-38A
9-39                Class SW-39A
9-40                Class SW-40A
9-41                Class SW-41A
9-42                Class SW-42A
9-43                Class SW-43A
9-44                Class SW-44A
9-45                Class SW-45A
9-46                Class SW-46A
9-47                Class SW-47A
9-48                Class SW-48A
9-49                Class SW-49A
9-50                Class SW-50A
9-51                Class SW-51A
9-52                Class SW-52A
</TABLE>


                                       -6-

<PAGE>

<TABLE>
<S>                 <C>
9-53                Class SW-53A
9-54                Class SW-54A
9-55                Class SW-55A
9-56                Class SW-56A
9-57                Class SW-57A
9-58                Class SW-58A
9-59                Class SW-59A
9-60                Class SW-60A
</TABLE>

(5) The Class LTR Interest shall have no principal amount and shall bear no
interest.

UPPER TIER REMIC

The following table sets forth the designation, the initial principal balances
and the interest rates in each of the interests in the Upper Tier REMIC.

<TABLE>
<CAPTION>
                                  Initial Principal          Corresponding Class
Class                                  Balance        Rate     of Certificates
-----                             -----------------   ----   -------------------
<S>                               <C>                 <C>    <C>
UTA-1A                                   (1)           (2)           A-1A
UTA-1B                                   (1)           (2)           A-1B
UTA-2A                                   (1)           (2)           A-2A
UTA-2B                                   (1)           (2)           A-2B
UTA-2C                                   (1)           (2)           A-2C
UTM-1                                    (1)           (2)           M-1
UTM-2                                    (1)           (2)           M-2
UTM-3                                    (1)           (2)           M-3
UTM-4                                    (1)           (2)           M-4
UTM-5                                    (1)           (2)           M-5
UTM-6                                    (1)           (2)           M-6
UTB-1                                    (1)           (2)           B-1
UTB-2                                    (1)           (2)           B-2
UTB-3                                    (1)           (2)           B-3
Uncertificated Class C Interest          (3)           (3)           N/A
UT-IO                                    (4)           (4)           N/A
Residual Interest                        (1)           (2)           R
</TABLE>

(1) The initial principal balance of each of these REMIC Regular Interests shall
equal the initial principal balance of its Corresponding Class of Certificates.


                                       -7-

<PAGE>

(2) The interest rates on each of these REMIC 2 Regular Interests shall be an
annual rate equal to the Pass-Through Rate for the corresponding Class of
Certificates, provided that in lieu of the applicable Available Funds Caps set
forth in the definition of an applicable Pass-Through Rate, the applicable Upper
Tier REMIC Net WAC Cap shall be used.

(3) The Uncertificated Class C Interest shall have an initial principal balance
equal to the initial Overcollateralization Amount. The Uncertificated Class C
Interest shall accrue interest on a notional balance set forth in the definition
of Class C Current Interest at a rate equal to the Class C Distributable
Interest Rate.

(4) The Class UT-IO Interest shall have no principal amount and will not have an
interest rate, but will be entitled to 100% of the interest accrued with respect
to the Class LT-IO Interest.

THE CERTIFICATES

The following table sets forth the Class designation, interest rate, and initial
Class principal amount for each Class of Certificates comprising interests in
the Trust Fund.

<TABLE>
<CAPTION>
          Initial Class
Class   Principal Amount   Interest Rate
-----   ----------------   -------------
<S>     <C>                <C>
A-1A           (1)             (2)
A-1B           (1)             (2)
A-2A           (1)             (2)
A-2B           (1)             (2)
A-2C           (1)             (2)
M-1            (1)             (2)
M-2            (1)             (2)
M-3            (1)             (2)
M-4            (1)             (2)
M-5            (1)             (2)
M-6            (1)             (2)
B-1            (1)             (2)
B-2            (1)             (2)
B-3            (1)             (2)
C              (3)             (3)
P              (4)             (4)
R              (1)             (2)(5)
</TABLE>

(1) Each of these Classes of Certificates shall have initial principal balances
as set forth in Section 5.01 hereof.

(2) Each of these Classes of Certificates shall bear interest at a per annum
rate equal to the Pass-Through Rate for such Certificates set forth in the
definitions herein.

(3) For federal income tax purposes, the Class C Certificate shall represent (i)
the right to receive all distributions with respect to the REMIC Regular
Interests represented by the Uncertificated Class C Interest and the Class UT-IO
Interest and (ii) certain rights and obligations with respect to notional
principal contracts as described in Section 2.07.


                                       -8-

<PAGE>

(4) The Class P Certificates shall be entitled to the amounts distributable
pursuant to Section 4.04(b) hereof and shall not represent a REMIC regular
interest.

(5) The Class R Interest represents ownership of the Class SWR Interest, the
Class LTR Interest and the Residual Interest.

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

                                    ARTICLE I
                                   DEFINITIONS

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

     Accepted Servicing Practices: The Servicer's normal servicing practices,
which will conform to the mortgage servicing practices of prudent mortgage
lending institutions which service for their own account mortgage loans of the
same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.

     Accrual Period: With respect to each Class of Certificates and their
Corresponding REMIC Regular Interests (other than the Class B-2 and Class B-3
Certificates and their Corresponding REMIC Regular Interests) and the Lower Tier
REMIC Interests and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. With respect to the Class B-2 and Class B-3
Certificates, their Corresponding REMIC Regular Interests and the SWAP REMIC
Regular Interests and any Distribution Date, the calendar month immediately
preceding the month in which such Distribution Date occurs. All calculations of
interest on each Class of Certificates and their Corresponding REMIC Regular
Interests (other than the Class B-2 and Class B-3 Certificates and their
Corresponding REMIC Regular Interests) and the Lower Tier REMIC Interests will
be made on the basis of the actual number of days elapsed in the related Accrual
Period and a 360 day year. All calculations of interest on the Class B-2 and
Class B-3 Certificates, their Corresponding REMIC Regular Interests and the SWAP
REMIC Regular Interests will be made on the basis of a 360 day year consisting
of twelve 30 day months.

     Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate that is adjustable.

     Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.

     Advance: The aggregate of the advances required to be made by the Servicer
with respect to any Distribution Date pursuant to Section 4.01, the amount of
any such advances being equal to the sum of the aggregate of payments of
principal and interest (net of the Servicing Fee Rate) on the Mortgage Loans
that were due during the applicable Due Period and not received as of the close
of business on the related Determination Date, less the aggregate amount of any
such Delinquent payments that the Servicer has determined would constitute a
Non-Recoverable Advance were an advance to be made with respect thereto;
provided, however, that with respect to any Mortgage Loan that is 150 days
delinquent or more (whether or not the Mortgage Loan has been converted to an
REO Property), there will be no obligation to make advances and, provided
further, however, that with respect to any Mortgage Loan that has been


                                       -9-

<PAGE>

converted to an REO Property which is less than 150 days delinquent, the
obligation to make Advances shall be limited to payments of interest.

     Advance Facility: A financing or other facility as described in Section
10.07(a).

     Advancing Person: The Person to whom the Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances have been
assigned pursuant to Section 10.07.

     Affiliate: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

     Aggregate Certificate Principal Balance: For any date of determination, the
sum of the Class A-1A Certificate Principal Balance, the Class A-1B Certificate
Principal Balance, the Class A-2A Certificate Principal Balance, the Class A-2B
Certificate Principal Balance, the Class A-2C Certificate Principal Balance, the
Class R Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance, the Class M-3 Certificate
Principal Balance, the Class M-4 Certificate Principal Balance, the Class M-5
Certificate Principal Balance, the Class M-6 Certificate Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate Principal
Balance, and the Class B-3 Certificate Principal Balance, in each case as of
such date of determination.

     Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein.

     Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.

     Appraised Value: With respect to a Mortgage Loan the proceeds of which were
used to purchase the related Mortgaged Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the appraised value based on an
appraisal made for a Seller by an independent fee appraiser at the time of the
origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.

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

     Auction: The one-time auction conducted by the Trustee, as described in
Section 9.01(b) hereof.

     Auction Date: The date on which the Auction occurs.

     Available Funds Cap: With respect to any Distribution Date, the per annum
rate equal to 12 times the quotient of (x) the excess of (i) the total scheduled
interest on the Mortgage Loans based on the


                                      -10-

<PAGE>

Mortgage Rates in effect on the related Due Date over (ii) the sum of the
Servicing Fee, the MI Insurer Fee and any amounts owed to the Swap Counterparty
(other than any Defaulted Swap Termination Payments), divided by (y) the
aggregate principal balance of the Class A, Class M and Class B Certificates
immediately prior to such Distribution Date and with respect to the Class A,
Class M and Class B-1 Certificates multiplied by 30 and divided by the actual
number of days in the related Accrual Period.

     Balloon Loan: A Mortgage Loan having an original term to stated maturity of
approximately 15 years and that provides for level monthly payments of principal
and interest generally based on a 30-year amortization schedule, with a balloon
payment of the remaining outstanding principal balance due on such Mortgage Loan
at its stated maturity.

     Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06). As of the Closing Date, each of
the Class A, Class M and Class B Certificates constitutes a Class of Book-Entry
Certificates.

     Book-Entry Regulation S Global Securities: As defined in Section 5.01.

     Bring Down Letters: Those certain letter agreements, dated as of November
30, 2005 between MLMC and certain Transferors set out on Exhibit J-1 hereto and
those certain letter agreements, dated as of November 30, 2005 between MLML and
certain Transferors set out on Exhibit J-2 hereto.

     Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a day
on which banking institutions in the State of California, State of Maryland,
State of Minnesota, State of Oregon and in the City of New York, New York are
authorized or obligated by law or executive order to be closed.

     Cap Contract: An amended confirmation and agreement between the Trustee, on
behalf of the Trust, and the Cap Contract Counterparty.

     Cap Contract Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 4.04(k) in the name of the Trustee for the
benefit of the Trust Fund and designated "Wells Fargo Bank, N.A., as Trustee, in
trust for registered holders of Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-HE2." Funds in the Cap Contract
Account shall be held in trust for the Trust Fund for the uses and purposes set
forth in this Agreement.

     Cap Contract Counterparty: The Bank of New York.

     Cap Contract Notional Balance: As of any Distribution Date, the lesser of
(x) the Notional Balance of the Cap Contract for such Distribution Date set
forth in the table in Exhibit O and (y) the outstanding Certificate Principal
Balance of the Class A, Class M and Class B-1 Certificates.

     Cap Contract Termination Date: The Distribution Date in July 2006.

     Certificate: Any one of the certificates of any Class executed by the
Trustee and authenticated by the Trustee in substantially the forms attached
hereto as Exhibit A.

     Certificate Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05(f) in the name of the Trustee for the
benefit of the Certificateholders and designated "Wells Fargo Bank, N.A., as
Trustee, in trust for registered holders of Merrill Lynch Mortgage


                                      -11-

<PAGE>

Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-HE2."
Funds in the Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.

     Certificate Group: Either of Certificate Group One or Certificate Group
Two.

     Certificate Group One: The Class A-1A, Class A-1B and Class R Certificates.
For purposes of Section 2.07 hereof, Certificate Group One shall be related to
Group One.

     Certificate Group Two: The Class A-2A, Class A-2B and Class A-2C
Certificates. For purposes of Section 2.07 hereof, Certificate Group Two shall
be related to Group Two.

     Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.

     Certificate Principal Balance: As to any Certificate and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
less the sum of (1) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (2) any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to Section
4.04(i). On each Distribution Date, after all distributions of principal on such
Distribution Date, a portion of the Class C Interest Carry Forward Amount in an
amount equal to the excess of the Overcollateralization Amount on such
Distribution Date over the Overcollateralization Amount as of the preceding
Distribution Date (or, in the case of the first Distribution Date, the initial
Overcollateralization Amount (based on the Stated Principal Balance of the
Mortgage Loans as of the Cut-Off Date)) will be added to the aggregate
Certificate Principal Balance of the Class C Certificates (on a pro rata basis).
Notwithstanding the foregoing on any Distribution Date relating to a Due Period
in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the total of any Subsequent
Recovery distributed on such date to the Certificateholders (reduced by the
amount of the increase in the Certificate Principal Balance of any more senior
Class of Certificates pursuant to this sentence on such Distribution Date).

     Certificate Register: The register maintained pursuant to Section 5.02
hereof.

     Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Trustee is entitled to rely conclusively on a certification of
the Depositor or any Affiliate of the Depositor in determining which
Certificates are registered in the name of an Affiliate of the Depositor.

     Class: All Certificates bearing the same Class designation as set forth in
Section 5.01 hereof.


                                      -12-

<PAGE>

     Class A Certificate Principal Balance: For any date of determination, the
sum of the Class A-1A Certificate Principal Balance, the Class A-1B Certificate
Principal Balance, the Class R Certificate Principal Balance, the Class A-2A
Certificate Principal Balance, the Class A-2B Certificate Principal Balance and
the Class A-2C Certificate Principal Balance.

     Class A Certificates: Any of the Class A-1A Certificates, the Class A-1B
Certificates, the Class A-2A Certificates, the Class A-2B Certificates, the
Class A-2C Certificates and the Class R Certificates

     Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on which a Stepdown
Trigger Event exists, 100% of the Principal Distribution Amount for such
Distribution Date and (2) on or after the Stepdown Date where a Stepdown Trigger
Event does not exist, the excess of (A) the Class A Certificate Principal
Balance immediately prior to such Distribution Date over (B) the lesser of (i)
61.50% of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period and (ii) the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount provided, however,
that in no event will the Class A Principal Distribution Amount with respect to
any Distribution Date exceed the aggregate Certificate Principal Balance of the
Class A Certificates.

     Class A-1 Trigger Event: The situation that exists with respect to any
Distribution Date (a) during the period from the Closing Date through the
Distribution Date in November 2008, if the aggregate amount of Realized Losses
incurred from the Cut-off Date through the last day of the related Due Period
(after giving effect to scheduled payments received or advanced on or before the
related Determination Date and Principal Prepayments received during the related
Prepayment Period) divided by the sum of the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date exceeds 2.85%, or (b) on any
Distribution Date on or after December 2008, if a Stepdown Trigger Event is in
effect.

     Class A-1A Certificate: Any Certificate designated as a "Class A-1A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class A-1A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1A Certificates.

     Class A-1A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1A Pass-Through Rate on
the Class A-1A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1A Certificates.

     Class A-1A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1A Pass-Through Rate for the related Accrual Period.

     Class A-1A Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.260% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.520% per annum.


                                      -13-

<PAGE>

     Class A-1A Pass-Through Rate: For the first Distribution Date, 4.3813% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1A Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class A-1B Certificate: Any Certificate designated as a "Class A-1B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class A-1B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-1B Certificates.

     Class A-1B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1B Pass-Through Rate on
the Class A-1B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-1B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-1B Certificates.

     Class A-1B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-1B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-1B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-1B Pass-Through Rate for the related Accrual Period.

     Class A-1B Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date, 0.310% per annum and, as of any Distribution
Date after the Initial Optional Termination Date, 0.620% per annum.

     Class A-1B Pass-Through Rate: For the first Distribution Date, 4.4313% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-1B Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class A-2 Certificates: Each of the Class A-2A Certificates, the Class A-2B
Certificates and the Class A-2C Certificates.

     Class A-2A Certificate: Any Certificate designated as a "Class A-2A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class A-2A Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2A Certificates.

     Class A-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2A Pass-Through Rate on
the Class A-2A Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2A Certificates.

     Class A-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2A Pass-Through Rate for the related Accrual Period.


                                      -14-

<PAGE>

     Class A-2A Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.110% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.220% per
annum.

     Class A-2A Pass-Through Rate: For the first Distribution Date, 4.2313% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2A Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class A-2B Certificate: Any Certificate designated as a "Class A-2B
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class A-2B Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2B Certificates.

     Class A-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2B Pass-Through Rate on
the Class A-2B Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2B Certificates.

     Class A-2B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-2B Pass-Through Rate for the related Accrual Period.

     Class A-2B Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.250% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.500% per
annum.

     Class A-2B Pass-Through Rate: For the first Distribution Date, 4.3713% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2B Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class A-2C Certificate: Any Certificate designated as a "Class A-2C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class A-2C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class A-2C Certificates.

     Class A-2C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2C Pass-Through Rate on
the Class A-2C Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class A-2C Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class A-2C Certificates.

     Class A-2C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-2C Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-2C Certificates with respect to interest on such prior Distribution Dates


                                      -15-

<PAGE>

and (2) interest on such excess (to the extent permitted by applicable law) at
the Class A-2C Pass-Through Rate for the related Accrual Period.

     Class A-2C Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.370% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.740% per
annum.

     Class A-2C Pass-Through Rate: For the first Distribution Date, 4.4913% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-2C Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class B Certificates: Any of the Class B-1, Class B-2 or Class B-3
Certificates.

     Class B-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class B-1 Certificates.

     Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class B-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-1 Certificates.

     Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-1 Certificates.

     Class B-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-1 Pass-Through Rate for the related Accrual Period.

     Class B-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 1.250% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.875% per
annum.

     Class B-1 Pass-Through Rate: For the first Distribution Date, 5.3713% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class B-1 Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class B-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5 Certificate Principal Balance and the Class M-6
Certificate Principal Balance have been reduced to zero and a Stepdown Trigger
Event exists, or as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the


                                      -16-

<PAGE>

Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after taking into account distributions of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class M-5 Certificate Principal
Balance (after taking into account distributions of the Class M-5 Principal
Distribution Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal Balance (after taking into account distributions of the Class M-6
Principal Distribution Amount on such Distribution Date) and (H) the Class B-1
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 97.00% of the Stated Principal Balance of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balance of the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates and Class M Certificates has been reduced to zero, the Class B-1
Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class B-1 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A
and Class M Certificates and (II) in no event will the Class B-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class B-1
Certificate Principal Balance.

     Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-1 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

     Class B-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class B-2 Certificates.

     Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class B-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-2 Certificates.

     Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-2 Certificates.

     Class B-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-2 Pass-Through Rate for the related Accrual Period.

     Class B-2 Pass-Through Rate: As of any Distribution Date, the least of (1)
5.00%,(2) the Available Funds Cap and (3) the Maximum Rate Cap for such
Distribution Date.


                                      -17-

<PAGE>

     Class B-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5 Certificate Principal Balance, the Class M-6
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class M-3 Certificate Principal Balance (after
taking into account distributions of the Class M-3 Principal Distribution Amount
on such Distribution Date), (E) the Class M-4 Certificate Principal Balance
(after taking into account distributions of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class M-5 Certificate Principal
Balance (after taking into account distributions of the Class M-5 Principal
Distribution Amount on such Distribution Date), (G) the Class M-6 Certificate
Principal Balance (after taking into account distributions of the Class M-6
Principal Distribution Amount on such Distribution Date), (H) the Class B-1
Certificate Principal Balance (after taking into account distributions of the
Class B-1 Principal Distribution Amount on such Distribution Date) and (I) the
Class B-2 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 98.00% of the Stated Principal Balance of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balance of the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A, Class M and Class B-1 Certificates has been
reduced to zero, the Class B-2 Principal Distribution Amount will equal the
lesser of (x) the outstanding Certificate Principal Balance of the Class B-2
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M and Class B-1 Certificates and (II)
in no event will the Class B-2 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-2 Certificate Principal Balance.

     Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

     Class B-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class B-3 Certificates.

     Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class B-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class B-3 Certificates.

     Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or a Class B-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a


                                      -18-

<PAGE>

trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class B-3 Certificates.

     Class B-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class B-3 Pass-Through Rate for the related Accrual Period.

     Class B-3 Pass-Through Rate: As of any Distribution Date, the least of (1)
5.00%,(2) the Available Funds Cap and (3) the Maximum Rate Cap for such
Distribution Date.

     Class B-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance, the Class M-3 Certificate Principal Balance, the Class M-4 Certificate
Principal Balance, the Class M-5 Certificate Principal Balance, the Class M-6
Certificate Principal Balance, the Class B-1 Certificate Principal Balance and
the Class B-2 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class M-2
Certificate Principal Balance (after taking into account distributions of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class M-3 Certificate Principal Balance (after taking into account distributions
of the Class M-3 Principal Distribution Amount on such Distribution Date), (E)
the Class M-4 Certificate Principal Balance (after taking into account
distributions of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distributions of the Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Class M-6 Certificate Principal Balance
(after taking into account distributions of the Class M-6 Principal Distribution
Amount on such Distribution Date) and (H) the Class B-1 Certificate Principal
Balance (after taking into account distributions of the Class B-1 Principal
Distribution Amount on such Distribution Date), (G) the Class B-2 Certificate
Principal Balance (after taking into account distributions of the Class B-2
Principal Distribution Amount on such Distribution Date) and (H) the Class B-3
Certificate Principal Balance (after taking into account distributions of the
Class B-3 Principal Distribution Amount on such Distribution Date) over (2) the
lesser of (A) 99.00% of the Stated Principal Balance of the Mortgage Loans as of
the end of the immediately preceding Due Period and (B) the excess of the Stated
Principal Balance of the Mortgage Loans as of the end of the immediately
preceding Due Period over the Minimum Required Overcollateralization Amount.
Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A, Class M, Class B-1 and Class B-2 Certificates has been reduced to zero, the
Class B-3 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class B-3 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M, Class B-1 and Class B-2 Certificates and (II) in no event
will the Class B-3 Principal Distribution Amount with respect to any
Distribution Date exceed the Class B-3 Certificate Principal Balance.

     Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class B-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class B-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."


                                      -19-

<PAGE>

     Class C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Mortgage Loans which
have been applied to the reduction of the Certificate Principal Balance of the
Class C Certificates.

     Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A hereto, representing the right to
distributions as set forth herein.

     Class C Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class C Certificates.

     Class C Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class C Distributable Interest Rate on
a notional amount equal to the aggregate principal balance of the Lower Tier
REMIC Regular Interests immediately prior to such Distribution Date, plus the
interest portion of any previous distributions on such Class that is recovered
as a voidable preference by a trustee in bankruptcy, less any Non-Supported
Interest Shortfall allocated on such Distribution Date to the Class C
Certificates.

     Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
(other than the Class LT-IO Interest) over (b) two times the weighted average of
the interest rates on the Lower Tier REMIC Regular Interests (other than the
Class LT-IO Interest) (treating for purposes of this clause (b) the interest
rate on each of the Lower Tier REMIC Marker Classes as being capped at the
interest rate of the Corresponding REMIC Regular Interest of the Related
Certificates and treating the Class LTX Interest as being capped at zero). The
averages described in the preceding sentence shall be weighted on the basis of
the respective principal balances of the Lower Tier REMIC Regular Interests
immediately prior to any date of determination.

     Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Certificate Principal Balance of the Class C Certificates.

     Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class C Certificates pursuant to the last sentence of
the definition of "Certificate Principal Balance."

     Class LTA-1A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificates and an interest rate equal to the Net Rate.

     Class LTA-1B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTA-2A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTA-2B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.


                                      -20-

<PAGE>

     Class LTA-2C Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTB-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTB-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTB-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTM-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTM-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTM-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTM-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTM-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTM-6 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/2 of the initial principal
balance of its Related Certificate and an interest rate equal to the Net Rate.

     Class LTR Interest: The sole class of "residual interest" in the Lower Tier
REMIC.

     Class LTX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) the aggregate
Cut-off Date Principal Balance of the Mortgage Loans over (ii) the aggregate
initial principal balance of the Lower Tier REMIC Marker Classes and an interest
rate equal to the Net Rate.

     Class M Certificates: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.


                                      -21-

<PAGE>

     Class M-1 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class M-1 Certificates.

     Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class M-1 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-1 Certificates.

     Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-1 Certificates.

     Class M-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-1 Pass-Through Rate for the related Accrual Period.

     Class M-1 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.550% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.825% per
annum.

     Class M-1 Pass-Through Rate: For the first Distribution Date, 4.6713% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-1 Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance has been
reduced to zero and a Stepdown Trigger Event exists, or as long as a Stepdown
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance immediately prior to such Distribution
Date over (2) the lesser of (A) 79.80% of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period and (B) the
excess of the Stated Principal Balances for the Mortgage Loans as of the end of
the immediately preceding Due Period over the Minimum Required
Overcollateralization Amount. Notwithstanding the foregoing, (I) on any
Distribution Date prior to the Stepdown Date on which the Certificate Principal
Balance of each Class of Class A Certificates has been reduced to zero, the
Class M-1 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-1 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A Certificates and (II) in no event will the Class M-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-1
Certificate Principal Balance.

     Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-1 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the


                                      -22-

<PAGE>

Certificate Principal Balance of such Class M-1 Certificates pursuant to the
last sentence of the definition of "Certificate Principal Balance."

     Class M-2 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class M-2 Certificates.

     Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class M-2 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-2 Certificates.

     Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-2 Certificates.

     Class M-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-2 Pass-Through Rate for the related Accrual Period.

     Class M-2 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.650% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 0.975% per
annum.

     Class M-2 Pass-Through Rate: For the first Distribution Date, 4.7713% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-2 Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance and the
Class M-1 Certificate Principal Balance have been reduced to zero and a Stepdown
Trigger Event exists, or as long as a Stepdown Trigger Event does not exist, the
excess of (1) the sum of (A) the Class A Certificate Principal Balance (after
taking into account distributions of the Class A Principal Distribution Amount
on such Distribution Date), (B) the Class M-1 Certificate Principal Balance
(after taking into account distributions of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class M-2 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
86.50% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates and the
Class M-1 Certificates has been reduced to zero, the Class M-2 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class M-2 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A and Class
M-1 Certificates and (II) in no event will the Class M-2 Principal Distribution
Amount with respect to any Distribution Date exceed the Class M-2 Certificate
Principal Balance.


                                      -23-

<PAGE>

     Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-2 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-2 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

     Class M-3 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class M-3 Certificates.

     Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class M-3 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-3 Certificates.

     Class M-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-3 Pass-Through Rate on
the Class M-3 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates.

     Class M-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-3 Pass-Through Rate for the related Accrual Period.

     Class M-3 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.720% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.080% per
annum.

     Class M-3 Pass-Through Rate: For the first Distribution Date, 4.8413% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-3 Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class M-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance
have been reduced to zero and a Stepdown Trigger Event exists, or as long as a
Stepdown Trigger Event does not exist, the excess of (1) the sum of (A) the
Class A Certificate Principal Balance (after taking into account distributions
of the Class A Principal Distribution Amount on such Distribution Date), (B) the
Class M-1 Certificate Principal Balance (after taking into account distributions
of the Class M-1 Principal Distribution Amount on such Distribution Date), (C)
the Class M-2 Certificate Principal Balance (after taking into account
distributions of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-3 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 88.60% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of


                                      -24-

<PAGE>

Class A Certificates, the Class M-1 Certificates and the Class M-2 Certificates
has been reduced to zero, the Class M-3 Principal Distribution Amount will equal
the lesser of (x) the outstanding Certificate Principal Balance of the Class M-3
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A, Class M-1 and Class M-2 Certificates and (II)
in no event will the Class M-3 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-3 Certificate Principal Balance.

     Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-3 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-3 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

     Class M-4 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class M-4 Certificates.

     Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class M-4 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-4 Certificates.

     Class M-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-4 Pass-Through Rate on
the Class M-4 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-4 Certificates.

     Class M-4 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-4 Pass-Through Rate for the related Accrual Period.

     Class M-4 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 0.850% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.275% per
annum.

     Class M-4 Pass-Through Rate: For the first Distribution Date, 4.9713% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-4 Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class M-4 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance
and the Class M-3 Certificate Principal Balance have been reduced to zero and a
Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event does not
exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class M-1 Certificate
Principal Balance (after taking into account distributions of the Class M-1
Principal Distribution Amount on such


                                      -25-

<PAGE>

Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date and (E) the Class M-4 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
91.90% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, and the Class M-3
Certificates have been reduced to zero, the Class M-4 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class M-4 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class M-1, Class M-2,
and Class M-3 Certificates and (II) in no event will the Class M-4 Principal
Distribution Amount with respect to any Distribution Date exceed the Class M-4
Certificate Principal Balance.

     Class M-4 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-4 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-4 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-4 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

     Class M-5 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class M-5 Certificates.

     Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class M-5 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-5 Certificates.

     Class M-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-5 Pass-Through Rate on
the Class M-5 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-5 Certificates.

     Class M-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class M-5 Pass-Through Rate for the related Accrual Period.

     Class M-5 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 1.250% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.875% per
annum.

     Class M-5 Pass-Through Rate: For the first Distribution Date, 5.3713% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-5 Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.


                                      -26-

<PAGE>

     Class M-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance,
the Class M-3 Certificate Principal Balance and the Class M-4 Certificate
Principal Balance have been reduced to zero and a Stepdown Trigger Event exists,
or as long as a Stepdown Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class M-2 Certificate Principal Balance (after
taking into account distributions of the Class M-2 Principal Distribution Amount
on such Distribution Date), (D) the Class M-3 Certificate Principal Balance
(after taking into account distributions of the Class M-3 Principal Distribution
Amount on such Distribution Date, (E) the Class M-4 Certificate Principal
Balance (after taking into account distributions of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (F) the Class M-5 Certificate
Principal Balance immediately prior to such Distribution Date over (2) the
lesser of (A) 93.90% of the Stated Principal Balances of the Mortgage Loans as
of the end of the immediately preceding Due Period and (B) the excess of the
Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount. Notwithstanding the foregoing, (I) on any Distribution Date prior to the
Stepdown Date on which the Certificate Principal Balance of each Class of Class
A Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the
Class M-3 Certificates and the Class M-4 Certificates have been reduced to zero,
the Class M-5 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class M-5 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates and
(II) in no event will the Class M-5 Principal Distribution Amount with respect
to any Distribution Date exceed the Class M-5 Certificate Principal Balance.

     Class M-5 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-5 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-5 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-5 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

     Class M-6 Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans that
have been applied to the reduction of the Certificate Principal Balance of the
Class M-6 Certificates.

     Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

     Class M-6 Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class M-6 Certificates.

     Class M-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-6 Pass-Through Rate on
the Class M-6 Certificate Principal Balance as of such Distribution Date plus
the portion of any previous distributions on such Class in respect of Current
Interest or Class M-6 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-6 Certificates.

     Class M-6 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class M-6 Current Interest with respect to
prior Distribution Dates over (B) the amount


                                      -27-

<PAGE>

actually distributed to the Class M-6 Certificates with respect to interest on
such prior Distribution Dates and (2) interest on such excess (to the extent
permitted by applicable law) at the Class M-6 Pass-Through Rate for the related
Accrual Period.

     Class M-6 Margin: As of any Distribution Date up to and including the
Initial Optional Termination Date for the Certificates, 1.250% per annum and, as
of any Distribution Date after the Initial Optional Termination Date, 1.875% per
annum.

     Class M-6 Pass-Through Rate: For the first Distribution Date, 5.3713% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class M-6 Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class M-6 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Principal Distribution Amount
for such Distribution Date if the Class A Certificate Principal Balance, Class
M-1 Certificate Principal Balance and Class M-2 Certificate Principal Balance,
the Class M-3 Certificate Principal Balance, the Class M-4 Certificate Principal
Balance and the Class M-5 Certificate Principal Balance have been reduced to
zero and a Stepdown Trigger Event exists, or as long as a Stepdown Trigger Event
does not exist, the excess of (1) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distributions of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distributions of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date, (E) the Class M-4 Certificate Principal Balance (after taking
into account distributions of the Class M-4 Principal Distribution Amount on
such Distribution Date), (F) the Class M-5 Certificate Principal Balance (after
taking into account distributions of the Class M-5 Principal Distribution Amount
on such Distribution Date) and (G) the Class M-6 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 95.20% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over the Minimum Required Overcollateralization Amount. Notwithstanding
the foregoing, (I) on any Distribution Date prior to the Stepdown Date on which
the Certificate Principal Balance of each Class of Class A Certificates, the
Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates and the Class M-5 Certificates have been reduced to
zero, the Class M-6 Principal Distribution Amount will equal the lesser of (x)
the outstanding Certificate Principal Balance of the Class M-6 Certificates and
(y) 100% of the Principal Distribution Amount remaining after any distributions
on such Class A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates and (II) in no event will the Class M-6 Principal Distribution
Amount with respect to any Distribution Date exceed the Class M-6 Certificate
Principal Balance.

     Class M-6 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-6 Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class M-6 Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Certificate
Principal Balance of such Class M-6 Certificates pursuant to the last sentence
of the definition of "Certificate Principal Balance."

     Class P Certificate: Any Certificate designated as a Class P Certificate on
the face thereof, executed by the Trustee and authenticated by the Trustee in
substantially the form set forth in Exhibit A, representing the right to
distributions as set forth herein.

     Class Payment Shortfall: As defined in Section 2.07(d)(ii) herein.


                                      -28-

<PAGE>

     Class R Certificate: The Class R Certificate executed by the Trustee and
authenticated by the Trustee in substantially the form set forth in Exhibit A.

     Class R Certificate Principal Balance: As of any date of determination, the
aggregate Certificate Principal Balance of the Class R Certificate.

     Class R Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class R Pass-Through Rate on the Class
R Certificate Principal Balance as of such Distribution Date plus the portion of
any previous distributions on such Class in respect of Current Interest or a
Class R Interest Carry Forward Amount that is recovered as a voidable preference
by a trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated
on such Distribution Date to the Class R Certificate.

     Class R Interest Carry Forward Amount: As of any Distribution Date, the sum
of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to interest on such prior Distribution Dates and (2)
interest on such excess (to the extent permitted by applicable law) at the Class
R Pass-Through Rate for the related Accrual Period.

     Class R Margin: As of any Distribution Date up to and including the Initial
Optional Termination Date for the Certificates, 0.260% per annum and, as of any
Distribution Date after the Initial Optional Termination Date, 0.520% per annum.

     Class R Pass-Through Rate: For the first Distribution Date, 4.3813% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Available Funds Cap and (3) the Maximum Rate
Cap for such Distribution Date.

     Class SWR Interest: The sole class of "residual interest" in the SWAP
REMIC.

     Closing Date: November 30, 2005.

     Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.

     Collection Account: The separate Eligible Account created and initially
maintained by the Servicer pursuant to Section 3.05(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Wilshire
Credit Corporation, as servicer for Wells Fargo Bank, N.A., as Trustee, in trust
for registered holders of Merrill Lynch Mortgage Investors Trust, Mortgage Loan
Asset-Backed Certificates, Series 2005-HE2". Funds in the Collection Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.

     Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a percentage, the numerator of which is the
sum of (1) the original principal balance of the related Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property and
(B) the sales price of the related Mortgaged Property at time of origination.

     Compensating Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount equal to the portion of any Prepayment Interest
Shortfalls required to be deposited in the Collection Account by the Servicer
pursuant to Section 4.02 hereof.


                                      -29-

<PAGE>

     Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released either to a Mortgagor in accordance with the terms of the related
mortgage loan documents or to the holder of a senior lien on the Mortgaged
Property.

     Corresponding REMIC Regular Interest: For each Class of Certificates, the
interest in the Upper Tier REMIC listed on the same row in the table entitled
"Upper Tier REMIC" in the Preliminary Statement.

     Current Interest: Any of the Class A Current Interest, the Class R Current
Interest, the Class M-1 Current Interest, the Class M-2 Current Interest, the
Class M-3 Current Interest, the Class M-4 Current Interest, the Class M-5
Current Interest, the Class M-6 Current Interest, the Class B-1 Current
Interest, the Class B-2 Current Interest and the Class B-3 Current Interest.

     Cut-off Date: November 1, 2005.

     Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates on and
after the Cut-off Date.

     Defaulted Swap Termination Payment: Any payment required to be made by the
Supplemental Interest Trust to the Swap Counterparty pursuant to the Swap
Agreement as a result of an event of default under the Swap Agreement with
respect to which the Swap Counterparty is the defaulting party or a termination
event (including a Downgrade Termination Event) under that agreement (other than
illegality or a tax event) with respect to which the Swap Counterparty is the
sole Affected Party (as defined in the Swap Agreement).

     Definitive Certificates: As defined in Section 5.06.

     Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.

     Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month. With
respect to any Mortgage Loan due on any day other than the first day of the
month, such Mortgage Loan shall be deemed to be due on the first day of the
immediately succeeding month. Similarly for "60 days delinquent," "90 days
delinquent" and so on.

     Denomination: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Principal Balance of this Certificate."

     Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.

     Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to


                                      -30-

<PAGE>

Section 17A of the Securities Exchange Act of 1934, as amended. The Depository
shall initially be the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.

     Depository Agreement: With respect to Classes of Book-Entry Certificates,
the agreement between the Trustee and the initial Depository.

     Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.

     Designated Transaction: A transaction in which the assets underlying the
Certificates consist of single-family residential, multi-family residential,
home equity, manufactured housing and/or commercial mortgage obligations that
are secured by single-family residential, multi-family residential, commercial
real property or leasehold interests therein.

     Determination Date: With respect to any Distribution Date, the 15th day of
the month of such Distribution Date or, if such 15th day is not a Business Day,
the immediately preceding Business Day.

     Disqualified Organization: (1) the United States, any state or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (2) any organization
(other than a cooperative described in Section 521 of the Code) which is exempt
from tax under Chapter 1 of Subtitle A of the Code unless such organization is
subject to the tax imposed by Section 511 of the Code and (3) any organization
described in Section 1381(a)(2)(C) of the Code.

     Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in December 2005.

     Downgrade Termination Event: An event whereby (x) the Swap Counterparty (or
its guarantor) ceases to have a short term unsecured and unsubordinated debt
rating at least equal to "A-1" by S&P, or any successor thereto, and at least
"F1" by Fitch, or any successor thereto (including in connection with a merger,
consolidation or other similar transaction by the Swap Counterparty), and (y) at
least one of the following events has not occurred (except to the extent
otherwise approved by the Rating Agencies): (i) within the time period specified
in the Swap Agreement with respect to such downgrade, the Swap Counterparty
shall transfer the Swap Agreement, in whole, but not in part, to a substitute
swap counterparty that satisfies the requirements set forth in the Swap
Agreement, subject to the satisfaction of the Rating Agency Condition or (ii)
within the time period specified in the Swap Agreement with respect to such
downgrade, the Swap Counterparty shall collateralize its exposure to the Trust
Fund pursuant to an ISDA Credit Support Annex, subject to the satisfaction of
the Rating Agency Condition; provided that such ISDA Credit Support Annex shall
be made a credit support document for the Swap Counterparty pursuant to an
amendment to the Swap Agreement.

     Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which a Scheduled Payment is due.

     Due Period: With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.


                                      -31-

<PAGE>

     Eligible Account: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1 by S&P or F1 by Fitch, or (iii) an account or accounts the deposits in
which are fully insured by the FDIC, or (iv) an account or accounts, acceptable
to each Rating Agency without reduction or withdrawal of the rating of any Class
of Certificates, as evidenced in writing, by a depository institution in which
such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, or (v) maintained
at an eligible institution whose commercial paper, short-term debt or other
short-term deposits are rated at least A-1+ by S&P and F-1+ by Fitch, or (vi)
maintained with a federal or state chartered depository institution the deposits
in which are insured by the FDIC to the applicable limits and the short-term
unsecured debt obligations of which (or, in the case of a depository institution
that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by S&P or Prime-1 by Moody's
at the time any deposits are held on deposit therein, or (vii) otherwise
acceptable to each Rating Agency, as evidenced by a letter from each Rating
Agency to the Trustee.

     ERISA: The Employee Retirement Income Security Act of 1974, including any
successor or amendatory provisions.

     ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.

     ERISA Restricted Certificates: The Class C Certificates and the Class P
Certificates and any other Certificate, as long as the acquisition and holding
of such other Certificate is not covered by and exempt under any applicable
underwriter's exemption granted by the United States Department of Labor.

     Event of Default: As defined in Section 7.01 hereof.

     Excess Interest: On any Distribution Date, for the Class A, Class M and
Class B Certificates, the excess, if any, of (1) the amount of interest such
Class of Certificates is entitled to receive on such Distribution Date over (2)
the amount of interest such Class of Certificates would have been entitled to
receive on such Distribution Date at an interest rate equal to the REMIC
Pass-Through Rate.

     Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.

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


                                      -32-

<PAGE>

     Extra Principal Distribution Amount: With respect to any Distribution Date,
(1) prior to the Stepdown Date, the excess of (A) the sum of (i) the Aggregate
Certificate Principal Balance immediately preceding such Distribution Date
reduced by the Principal Funds with respect to such Distribution Date and (ii)
$3,601,765.01 over (B) the Pool Stated Principal Balance of the Mortgage Loans
as of such Distribution Date and (2) on and after the Stepdown Date, (A) the sum
of (x) the Aggregate Certificate Principal Balance immediately preceding such
Distribution Date, reduced by the Principal Funds with respect to such
Distribution Date and (y) the greater of (a) the sum of 1.00% of the Pool Stated
Principal Balance of the Mortgage Loans and (b) the Minimum Required
Overcollateralization Amount less (B) the Pool Stated Principal Balance of the
Mortgage Loans as of such Distribution Date; provided, however, that if on any
Distribution Date a Stepdown Trigger Event is in effect, the Extra Principal
Distribution Amount will not be reduced to the applicable percentage of the
then-current Pool Stated Principal Balance of the Mortgage Loans (and will
remain fixed at the applicable percentage of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date immediately prior to the
Stepdown Trigger Event) until the next Distribution Date on which the Stepdown
Trigger Event is not in effect.

     Fannie Mae: A federally chartered and privately owned corporation organized
and existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.

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

     Fitch: Fitch, Inc., or any successor in interest.

     Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage Loan
Schedule as having a Mortgage Rate which is fixed.

     Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Pass-Through Rate for a class of the Class A, Class M or
Class B Certificates is based upon the Available Funds Cap, the excess of (1)
the amount of interest that such class would have been entitled to receive on
such Distribution Date had the Pass-Through Rate for that class not been
calculated based on the Available Funds Cap, up to but not exceeding the greater
of (a) the Maximum Rate Cap or (b) the sum of (i) the Available Funds Cap and
(ii) the product of (A) a fraction, the numerator of which is 360 and the
denominator of which is the actual number of days in the related Accrual Period
and (B) the quotient obtained by dividing (I) an amount equal to the proceeds,
if any, payable under the Cap Contract with respect to such Distribution Date by
(II) the aggregate Certificate Principal Balance of each of the Classes of
Certificates to which the Cap Contract relates for such Distribution Date over
(2) the amount of interest such class was entitled to receive on such
Distribution Date based on the Available Funds Cap together with (A) the unpaid
portion of any such excess from prior Distribution Dates (and interest accrued
thereon at the then applicable Pass-Through Rate for such class, without giving
effect to the Available Funds Cap) and (B) any amount previously distributed
with respect to Floating Rate Certificate Carryover for such class that is
recovered as a voidable preference by a trustee in bankruptcy.

     Freddie Mac: A corporate instrumentality of the United States created and
existing under Title III of the Emergency Home Finance Act of 1970, as amended,
or any successor thereto.

     Fremont: Fremont Investment & Loan, or its successor in interest.

     Grantor Trusts: The grantor trusts described in Section 2.07 hereof.

     Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.


                                      -33-

<PAGE>

     Group One: The portion of the Mortgage Pool identified as "Group One" in
the Prospectus Supplement.

     Group One Mortgage Loan: Any Mortgage Loan identified in the Group One
Mortgage Loan Schedule attached hereto as Exhibit B-2.

     Group One Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum of the respective Certificate
Principal Balances of the Class A-1 and Class R Certificates and (2) the product
of (x) the Group One Principal Distribution Percentage and (y) the Class A
Principal Distribution Amount; provided, however, that (A) with respect to the
Distribution Date on which the Certificate Principal Balance of each Class of
the Class A-2 Certificates is initially reduced to zero (so long as the Class
A-1 and Class R Certificates are outstanding), the excess of (i) the Group Two
Principal Distribution Percentage of the Class A Principal Distribution Amount
over (ii) the amount necessary to reduce the Certificate Principal Balance of
each of the Class A-2 Certificates to zero will be added to the Group One
Principal Distribution Amount and (B) with respect to any Distribution Date
thereafter, the Group One Principal Distribution Amount shall equal the Class A
Principal Distribution Amount.

     Group One Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds with respect to such Distribution Date received
with respect to Group One Mortgage Loans, and the denominator of which is the
amount of all Principal Funds with respect to such Distribution Date received on
all the Mortgage Loans.

     Group Two: The portion of the Mortgage Pool identified as "Group Two" in
the Prospectus Supplement.

     Group Two Mortgage Loan: Any Mortgage Loan identified in the Group Two
Mortgage Loan Schedule attached hereto as Exhibit B-3.

     Group Two Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (1) the sum of the Certificate Principal Balance
of the Class A-2 Certificates and (2) the product of (x) the Group Two Principal
Distribution Percentage and (y) the Class A Principal Distribution Amount;
provided, however, that (A) with respect to the Distribution Date on which the
Certificate Principal Balance of the Class A-1 and Class R Certificates is
initially reduced to zero (so long as any of the Class A-2 Certificates is
outstanding), the excess of (i) the Group One Principal Distribution Percentage
of the Class A Principal Distribution Amount over (ii) the amount necessary to
reduce the Certificate Principal Balances of the Class A-1 Certificates to zero
will be added to the Group Two Principal Distribution Amount and (B) with
respect to any Distribution Date thereafter, the Group Two Principal
Distribution Amount shall equal the Class A Principal Distribution Amount.

     Group Two Principal Distribution Percentage: With respect to any
Distribution Date, a fraction expressed as a percentage, the numerator of which
is the amount of Principal Funds with respect to such Distribution Date received
with respect to Group Two Mortgage Loans, and the denominator of which is the
amount of all Principal Funds with respect to such Distribution Date received on
all the Mortgage Loans.

     Indenture: An indenture relating to the issuance of NIM Notes.

     Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Adjustment Date following the origination of such Mortgage Loan.


                                      -34-

<PAGE>

     Initial Certificate Principal Balance: With respect to any Class A, Class
M, Class B or Class C or Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing Date as set forth in
Section 5.01 hereof.

     Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.

     Initial Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is equal to or less
than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.

     Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect with respect to such Mortgage Loan, including any replacement policy or
policies for any insurance policies, including, without limitation, the MI
Policies.

     Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans pursuant
to any Insurance Policy or any other insurance policy covering a Mortgage Loan,
to the extent such proceeds are payable to the mortgagee under the Mortgage, the
Servicer or the Trustee under the deed of trust and are not applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account, in each case other than any amount
included in such Insurance Proceeds in respect of Insured Expenses.

     Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.

     Interest Carry Forward Amount: Any of the Class A-1A Interest Carry Forward
Amount, the Class A-1B Interest Carry Forward Amount, the Class A-2A Interest
Carry Forward Amount, the Class A-2B Interest Carry Forward Amount, the Class
A-2C Interest Carry Forward Amount, the Class R Interest Carry Forward Amount,
the Class M-1 Interest Carry Forward Amount, the Class M-2 Interest Carry
Forward Amount, the Class M-3 Interest Carry Forward Amount, the Class M-4
Interest Carry Forward Amount, the Class M-5 Interest Carry Forward Amount, the
Class M-6 Interest Carry Forward Amount, the Class B-1 Interest Carry Forward
Amount, the Class B-2 Interest Carry Forward Amount, the Class B-3 Interest
Carry Forward Amount or the Class C Interest Carry Forward Amount, as the case
may be.

     Interest Determination Date: With respect to the Certificates, the second
LIBOR Business Day preceding the commencement of such Accrual Period.

     Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fee, (2) all Advances
relating to interest with respect to the Mortgage Loans, (3) all Compensating
Interest with respect to the Mortgage Loans, (4) Liquidation Proceeds with
respect to the Mortgage Loans (to the extent such Liquidation Proceeds relate to
interest) collected during the related Prepayment Period, (5) all proceeds of
any purchase pursuant to Section 2.02 or 2.03 during the related Prepayment
Period or pursuant to Section 9.01 not later than the related Determination Date
(to the extent that such proceeds relate to interest) less the Servicing Fee and
(6) all Prepayment Charges received with respect to the Mortgage Loans during
the related Prepayment Period, less (A) all Non-Recoverable Advances relating to
interest and (B) other amounts reimbursable to the Servicer and the Trustee
pursuant to this Agreement.


                                      -35-

<PAGE>

     Latest Possible Maturity Date: The latest maturity date for any Mortgage
Loan in the Trust Fund plus one year.

     LIBOR Business Day: Any day on which banks in the City of London, England
and New York City, U.S.A. are open and conducting transactions in foreign
currency and exchange.

     Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that either (a) has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Servicer has certified (in
accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation
or (b) is not a first lien Mortgage Loan and is delinquent 180 days or longer,
the Servicer has certified in a certificate of an officer of the Servicer
delivered to the Depositor and the Trustee that it does not believe that there
is a reasonable likelihood that any further net proceeds will be received or
recovered with respect to such Mortgage Loan.

     Liquidation Proceeds: Amounts, including Condemnation Proceeds and
Insurance Proceeds, received in connection with the partial or complete
liquidation of Mortgage Loans, whether through trustee's sale, foreclosure sale,
sale by the Servicer pursuant to this Agreement or otherwise or amounts received
in connection with any condemnation or partial release of a Mortgaged Property
and any other proceeds received in connection with an REO Property, less the sum
of related unreimbursed Advances, Servicing Fees, Servicing Advances and any
other expenses related to such Mortgage Loan.

     Losses: Any losses, claims, damages, liabilities or expenses collectively.

     Lower Tier REMIC: As described in the Preliminary Statement and Section
2.07.

     Lower Tier REMIC Interests: Each of the Class LTA-1A Interest, the Class
LTA-1B Interest, the Class LTA-2A Interest, the Class LTA-2B Interest, the Class
LTA-2C Interest, the Class LTM-1 Interest, the Class LTM-2 Interest, the Class
LTM-3 Interest, the Class LTM-4 Interest, the Class LTM-5 Interest, the Class
LTM-6 Interest, the Class LTB-1 Interest, the Class LTB-2 Interest, the Class
LTB-3 Interest, the Class LTX Interest, the Class LTR Interest and the Class
LT-IO Interest.

     Lower Tier REMIC Marker Classes: Each of the classes of Lower Tier REMIC
Regular Interests other than the Class LTX Interest and other than the Class
LT-IO Interest.

     Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.

     Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the maximum rate of interest set forth as such in the related Mortgage Note and
with respect to each Fixed Rate Mortgage Loan, the rate of interest set forth in
the related Mortgage Note.

     Maximum Rate Cap: With respect to any Distribution Date, the per annum rate
equal to 12 times the quotient of (x) the excess of (i) the total scheduled
interest that would have been due on the Mortgage Loans during the related Due
Period had the Adjustable Rate Mortgage Loans provided for interest at their
maximum lifetime Mortgage Rates and the Fixed Rate Mortgage Loans provided for
interest at their Mortgage Rates over (ii) the sum of the Servicing Fee, the MI
Insurer Fee and any amounts owed to the Swap Counterparty (other than any
Defaulted Swap Termination Payments), divided by (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the preceding Distribution Date
(or in the case of the first Distribution Date, as of the Cut-off Date) and, in
the case of the Class A, Class M and Class B-1 Certificates, multiplied by 30
and divided by the actual number of days in the related Accrual Period.


                                      -36-

<PAGE>

     MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

     MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.

     MERS System: The system of recording transfers of mortgage electronically
maintained by MERS.

     MI Insurer Fee: The amount payable to the MI Insurer on each Distribution
Date, which amount shall equal one-twelfth of the product of (i) the MI Insurer
Fee Rate and (ii) the Stated Principal Balance of the applicable MI Mortgage
Loan (or the related REO Property) as of the first day of the related Due
Period.

     MI Insurer Fee Rate: With respect to each MI Mortgage Loan, the rate
specified for such MI Mortgage Loan on the schedule attached to the MI Policy,
plus a rate computed so that the MI Insurer Fee would make the MI Insurer whole
for any taxes imposed on the MI Insurer by the States of Kentucky or West
Virginia with respect to MI Mortgage Loans located in such States.

     MI Insurer: PMI Mortgage Insurance Co., or its successor in interest.

     MI Mortgage Loans: The list of Mortgage Loans insured by the MI Insurers
attached hereto as Exhibit B-4.

     MI Policy: The PMI primary private mortgage Insurance Policy No.
22510-0005-0 and all endorsements thereto, dated November 30, 2005, a form of
which is attached hereto as Exhibit P.

     MLMC: Merrill Lynch Mortgage Capital Inc., a Delaware corporation, or its
successors in interest.

     MLMC Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated
as of November 1, 2005 between the Depositor and MLMC.

     MLML: Merrill Lynch Mortgage Lending, Inc., a Delaware corporation, or its
successors in interest.

     MLML Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated
as of November 1, 2005 between the Depositor and MLML.

     Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage Loan,
the minimum rate of interest set forth as such in the related Mortgage Note.

     Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

     MIN: The loan number for any MERS Loan.

     MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee, solely
as nominee for the originator of such Mortgage Loan and its successors and
assigns.

     Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.

     Moody's: Moody's Investors Service, Inc. or any successor in interest.


                                      -37-

<PAGE>

     Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument creating a second lien or a second priority ownership interest
in an estate in fee simple in real property securing a Mortgage Note.

     Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.

     Mortgage Group: Either of Group One or Group Two.

     Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to time
amended by the Trustee to reflect the deletion of Deleted Mortgage Loans and the
addition of Replacement Mortgage Loans pursuant to the provisions of this
Agreement) transferred to the Trustee as part of the Trust Fund and from time to
time subject to this Agreement, attached hereto as Exhibits B-1, B-2 and B-3,
setting forth the following information with respect to each Mortgage Loan:

          (i)  the loan number;

          (ii) borrower name and address;

          (iii) the unpaid principal balance of the Mortgage Loans;

          (iv) the Initial Mortgage Rate;

          (v)  the original maturity date and the months remaining before
               maturity date;

          (vi) the original principal balance;

          (vii) the Cut-off Date Principal Balance;

          (viii) the first payment due date of the Mortgage Loan;

          (ix) the Loan-to-Value Ratio at origination with respect to a first
               lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
               respect to a second lien Mortgage Loan;

          (x)  a code indicating whether the residential dwelling at the time of
               origination was represented to be owner-occupied;

          (xi) a code indicating the property type;

          (xii) with respect to each Adjustable Rate Mortgage Loan;

               (A)  the frequency of each Adjustment Date;

               (B)  the next Adjustment Date;

               (C)  the Maximum Mortgage Rate;

               (D)  the Minimum Mortgage Rate;

               (E)  the Mortgage Rate as of the Cut-off Date;


                                      -38-

<PAGE>

               (F)  the related Periodic Rate Cap;

               (G)  the Gross Margin;

          (xiii) location of the related Mortgaged Property;

          (xiv) a code indicating whether a Prepayment Charge is applicable and,
               if so,

               (A)  the period during which such Prepayment Charge is in effect;

               (B)  the amount of such Prepayment Charge;

               (C)  any limitations or other conditions on the enforceability of
                    such Prepayment Charge; and

               (D)  any other information pertaining to the Prepayment Charge
                    specified in the related Mortgage Note;

          (xv) the Credit Score and date obtained;

          (xvi) a code indicating whether such loan is a MI Mortgage Loan;

          (xvii) the MI Insurer Fee Rate; and

          (xviii) the coverage percentage under the MI Policy.

     Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trust Fund.

     Mortgage Note: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan and all
amendments, modifications and attachments thereto.

     Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule set out on Exhibit B-1.

     Mortgaged Property: The underlying property securing a Mortgage Loan.

     Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.

     Mortgagor: The obligor on a Mortgage Note.

     Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the then current Mortgage Rate less (1) the Servicing Fee Rate and
(2) the MI Insurer Rate, if applicable.


                                      -39-

<PAGE>

     Net Rate: The per annum rate set forth in footnote 3 to the description of
the Lower Tier REMIC in the Preliminary Statement hereto (such rate being based
on the weighted average of the interest rates on the SWAP REMIC Regular
Interests as adjusted and as set forth in such footnote).

     Net Swap Payment: With respect to any Distribution Date, any net payment
(other than a Swap Termination Payment or Defaulted Swap Termination Payment)
made by the Trust Fund to the Swap Counterparty on the related Fixed Rate Payer
Payment Date (as defined in the Swap Agreement) or made by the Swap Counterparty
to the Trust Fund on the related Floating Rate Payer Payment Date (as defined in
the Swap Agreement). In each case, the Net Swap Payment shall not be less than
zero.

     Net WAC: With respect to any Distribution Date, the weighted average Net
Mortgage Rate for the Mortgage Loans calculated based on the respective Net
Mortgage Rates and the Stated Principal Balances of such Mortgage Loans as of
the preceding Distribution Date (or, in the case of the first Distribution Date,
as of the Cut-off Date).

     NIM Notes: The notes to be issued pursuant to the Indenture.

     Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise related to the Mortgage Loans.

     Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by the Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise related to the Mortgage
Loans.

     Non-Supported Interest Shortfall: As defined in Section 4.02.

     Offered Certificates: The Class A, Class M, Class B and Class R
Certificates.

     Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, the
Servicer or the Trustee (or any other officer customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with a particular subject) or (2),
if provided for in this Agreement, signed by a Servicing Officer, as the case
may be, and delivered to the Depositor, the Servicer or the Trustee, as the case
may be, as required by this Agreement.

     One-Month LIBOR: With respect to any Accrual Period, the rate determined by
the Trustee on the related Interest Determination Date on the basis of (a) the
offered rates for one-month United States dollar deposits, as such rates appear
on Telerate page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date or (b) if such rate does not appear on Telerate Page 3750 as
of 11:00 a.m. (London time), the offered rates of the Reference Banks for
one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Trustee as follows:

          (i)  If on such Interest Determination Date two or more Reference
               Banks provide such offered quotations, One-Month LIBOR for the
               related Accrual Period shall


                                      -40-

<PAGE>

               be the arithmetic mean of such offered quotations (rounded
               upwards if necessary to the nearest whole multiple of 0.03125%).

          (ii) If on such Interest Determination Date fewer than two Reference
               Banks provide such offered quotations, One-Month LIBOR for the
               related Accrual Period shall be the higher of (i) One-Month LIBOR
               as determined on the previous Interest Determination Date and
               (ii) the Reserve Interest Rate.

     Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, reasonably acceptable to each addressee of such
opinion; provided, however, that with respect to Section 6.04 or 10.01, or the
interpretation or application of the REMIC Provisions, such counsel must (1) in
fact be independent of the Depositor or the Servicer, (2) not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of
either and (3) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.

     Optional Termination: The termination of the Trust Fund hereunder pursuant
to clause (a) of Section 9.01 hereof.

     Optional Termination Amount: The repurchase price received by the Trustee
in connection with any repurchase of all of the Mortgage Loans pursuant to
Section 9.01.

     Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee (including any
amounts incurred by the Trustee in connection with conducting the Auction) or
the Servicer and any unpaid or unreimbursed Servicing Fees, Advances and
Servicing Advances, (C) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to any of
the Mortgage Loans of any predatory or abusive lending law and (D) any Swap
Termination Payment, other than a Defaulted Swap Termination Payment, owed to
the Swap Counterparty.

     OTS: The Office of Thrift Supervision.

     Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in exchange for
which or in lieu of which other Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to this Agreement.

     Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.

     Overcollateralization Amount: As of any date of determination, the excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class P
Certificates and the Class C Certificates).


                                      -41-

<PAGE>

     Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.

     Pass-Through Rate: With respect to any Class of Certificates, the
corresponding Pass-Through Rate for such Class of Certificates.

     Percentage Interest: With respect to:

          (i)  any Class, the percentage interest in the undivided beneficial
               ownership interest evidenced by such Class which shall be equal
               to the Certificate Principal Balance of such Class divided by the
               aggregate Certificate Principal Balance of all Classes; and

          (ii) any Certificate, the Percentage Interest evidenced thereby of the
               related Class shall equal the percentage obtained by dividing the
               Denomination of such Certificate by the aggregate of the
               Denominations of all Certificates of such Class; except that in
               the case of any Class P Certificates, the Percentage Interest
               with respect to such Certificate shown on the face of such
               Certificate.

     Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the related
Mortgage Note, the provision therein that limits permissible increases and
decreases in the Mortgage Rate on any Adjustment Date.

     Permitted Activities: The primary activities of the trust created pursuant
to this Agreement which shall be:

          (i)  holding the Mortgage Loans transferred from the Depositor and
               other assets of the Trust Fund, including the Cap Contract and
               the Supplemental Interest Trust subtrust, which in turn holds the
               Swap Agreement and any credit enhancement and passive derivative
               financial instruments that pertain to beneficial interests issued
               or sold to parties other than the Depositor, its Affiliates, or
               its agents;

          (ii) issuing Certificates and other interests in the assets of the
               Trust Fund;

          (iii) through the appropriate subtrust, as applicable, receiving
               collections on the Mortgage Loans and the Swap Agreement and
               making payments on such Certificates and interests in accordance
               with the terms of this Agreement; and

          (iv) engaging in other activities that are necessary or incidental to
               accomplish these limited purposes, which activities cannot be
               contrary to the status of the Trust Fund as a qualified special
               purpose entity under existing accounting literature.

     Permitted Investments: At any time, any one or more of the following
obligations and securities:

          (i)  obligations of the United States or any agency thereof, provided
               such obligations are backed by the full faith and credit of the
               United States;

          (ii) general obligations of or obligations guaranteed by any state of
               the United States or the District of Columbia receiving the
               highest long-term debt rating of each Rating Agency rating the
               Certificates;


                                      -42-

<PAGE>

          (iii) commercial or finance company paper, other than commercial or
               finance company paper issued by the Depositor, the Trustee or any
               of its Affiliates, which is then receiving the highest commercial
               or finance company paper rating of each such Rating Agency;

          (iv) certificates of deposit, demand or time deposits, or bankers'
               acceptances (other than banker's acceptances issued by the
               Trustee or any of its Affiliates) issued by any depository
               institution or trust company incorporated under the laws of the
               United States or of any state thereof and subject to supervision
               and examination by federal and/or state banking authorities,
               provided that the commercial paper and/or long term unsecured
               debt obligations of such depository institution or trust company
               are then rated one of the two highest long-term and the highest
               short-term ratings of each such Rating Agency for such
               securities;

          (v)  demand or time deposits or certificates of deposit issued by any
               bank or trust company or savings institution to the extent that
               such deposits are fully insured by the FDIC;

          (vi) guaranteed reinvestment agreements issued by any bank, insurance
               company or other corporation rated in the two highest long-term
               or the highest short-term ratings of each Rating Agency
               containing, at the time of the issuance of such agreements, such
               terms and conditions as will not result in the downgrading or
               withdrawal of the rating then assigned to the Certificates by any
               such Rating Agency as evidenced by a letter from each Rating
               Agency;

          (vii) repurchase obligations with respect to any security described in
               clauses (i) and (ii) above, in either case entered into with a
               depository institution or trust company (acting as principal)
               described in clause (v) above;

          (viii) securities (other than stripped bonds, stripped coupons or
               instruments sold at a purchase price in excess of 115% of the
               face amount thereof) bearing interest or sold at a discount
               issued by any corporation, other than the Trustee or any of its
               Affiliates, incorporated under the laws of the United States or
               any state thereof which, at the time of such investment, have one
               of the two highest long term ratings of each Rating Agency;

          (ix) interests in any money market fund (including those managed or
               advised by the Trustee or its affiliates) which at the date of
               acquisition of the interests in such fund and throughout the time
               such interests are held in such fund has the highest applicable
               long term rating by each Rating Agency rating such fund, if so
               rated; and

          (x)  short term investment funds sponsored by any trust company or
               national banking association incorporated under the laws of the
               United States or any state thereof, other than the Trustee or any
               of its Affiliates, which on the date of acquisition has been
               rated by each such Rating Agency in their respective highest
               applicable rating category;

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no


                                      -43-

<PAGE>

such instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (ix) above); and provided, further, (I)
that no amount beneficially owned by any REMIC (including, without limitation,
any amounts collected by the Servicer but not yet deposited in the Collection
Account) may be invested in investments (other than money market funds) treated
as equity interests for Federal income tax purposes, unless the Servicer shall
receive an Opinion of Counsel, at the expense of the party requesting that such
investment be made, to the effect that such investment will not adversely affect
the status of the any REMIC provided for herein as a REMIC under the Code or
result in imposition of a tax on the Trust Fund or any REMIC provided for herein
and (II) each such investment must be a "permitted investment" within the
meaning of Section 860G(a)(5) of the Code. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.

     Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to a
Class R Certificate, (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or
resident of the United States, a corporation or partnership (or other entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States or any
State thereof or the District of Columbia or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI or applicable successor form. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in Section 7701 of the Code. A corporation will not be
treated as an instrumentality of the United States or of any State thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such government unit.

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

     PMI: PMI Mortgage Insurance Co.

     Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances, as of such Distribution Date, of the Mortgage
Loans that were Outstanding Mortgage Loans as of such date.

     Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Offered Certificates.


                                      -44-

<PAGE>

     Prepayment Charges: Any prepayment premium or charge payable by a Mortgagor
in connection with any Principal Prepayment on a Mortgage Loan pursuant to the
terms of the related Mortgage Note or Mortgage, as applicable.

     Prepayment Interest Excess: With respect to any Servicer Remittance Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the calendar month in which such Servicer Remittance Date occurs and the
last day of the related Prepayment Period, an amount equal to interest (to the
extent received) at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the first day of the
calendar month in which such Servicer Remittance Date occurs and ending on the
date on which such Principal Prepayment is so applied.

     Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full (other
than a Principal Prepayment in full resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03 or 9.01 hereof and other than a Principal
Prepayment in full on a Mortgage Loan received during the period from and
including the first day to and including the 14th day of the month of such
Distribution Date), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the preceding Distribution Date exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment.

     Prepayment Period: As to any Distribution Date, the period beginning with
the 15th day of the calendar month preceding the month in which such
Distribution Date occurs (or in the case of the first Distribution Date,
beginning with the Cut-off Date) and ending on the 14th day of the month in
which such Distribution Date occurs.

     Principal Distribution Amount: With respect to each Distribution Date, the
sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.

     Principal Funds: With respect to the Mortgage Loans and any Distribution
Date, the sum, without duplication, of (1) the scheduled principal due during
the related Due Period and received before the related Servicer Remittance Date
or advanced on or before the related Servicer Remittance Date, (2) prepayments
collected in the related Prepayment Period, (3) the Stated Principal Balance of
each Mortgage Loan that was purchased by the Depositor or the Servicer during
the related Prepayment Period or, in the case of a purchase pursuant to Section
9.01, on the Business Day prior to such Distribution Date, (4) the amount, if
any, by which the aggregate unpaid principal balance of any Replacement Mortgage
Loan is less than the aggregate unpaid principal of the related Deleted Mortgage
Loans delivered by a Seller in connection with a substitution of a Mortgage Loan
pursuant to Section 2.03(c), (5) all Liquidation Proceeds collected during the
related Prepayment Period (to the extent such Liquidation Proceeds relate to
principal), (6) all Subsequent Recoveries received during the related Due Period
and (7) all other collections and recoveries in respect of principal during the
related Prepayment Period less (A) all Non-Recoverable Advances relating to
principal with respect to the Mortgage Loans and (B) other amounts reimbursable
to the Servicer and the Trustee pursuant to this Agreement and allocable to
principal.

     Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received or recovered in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Servicer in accordance
with the terms of the related Mortgage Note.


                                      -45-

<PAGE>

     Prospectus Supplement: The Prospectus Supplement dated November 28, 2005
relating to the public offering of the Offered Certificates.

     PUD: A Planned Unit Development.

     Purchase Price: With respect to any Mortgage Loan required to be
repurchased by a Seller or the applicable Transferor pursuant to Section 2.02 or
2.03 hereof or purchased by the Servicer pursuant to Section 3.12(c) hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan as of the date of such purchase together with any unreimbursed
Servicing Advances, (ii) accrued interest thereon at the applicable Mortgage
Rate from (a) the date through which interest was last paid by the Mortgagor to
(b) the Due Date in the month in which the Purchase Price is to be distributed
to Certificateholders and (iii) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund in connection with any violation relating to such
Mortgage Loan of any predatory or abusive lending law.

     Rating Agency: Either of S&P or Fitch. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.

     Rating Agency Condition: As defined in the Swap Agreement.

     Realized Loss: With respect to (1) a Liquidated Loan, the amount, if any,
by which the Stated Principal Balance and accrued interest thereon at the Net
Mortgage Rate exceeds the amount actually recovered by the Servicer with respect
thereto (net of reimbursement of Advances and Servicing Advances) at the time
such Mortgage Loan became a Liquidated Loan or (2) with respect to a Mortgage
Loan that is not a Liquidated Loan, any amount of principal that the Mortgagor
is no longer legally required to pay (except for the extinguishment of debt that
results from the exercise of remedies due to default by the Mortgagor).

     Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).

     Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, N.A., Citibank,
N.A., Wells Fargo Bank, N.A. and NatWest, N.A.; provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by the Trustee which are engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established place
of business in London, England and (ii) whose quotations appear on the Reuters
Screen LIBO Page on the relevant Interest Determination Date.

     Regular Certificate: Any one of the Class A, Class M and Class B
Certificates.

     Regulation S: Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case as the same may be amended from time
to time; and all references to any rule, section or subsection of, or definition
or term contained in, Regulation S means such rule, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.

     Regulation S Global Securities: The Book-Entry Regulation S Global
Securities and the Definitive Regulation S Global Securities.


                                      -46-

<PAGE>

     Related Certificates: With respect to the Class LTA-1A Interest, the Class
A-1A and Class R Certificates. With respect to the Class LTA-1B Interest, the
Class A-1B Certificates. With respect to the Class LTA-2A Interest, the Class
A-2A Certificates. With respect to the Class LTA-2B Interest, the Class A-2B
Certificates. With respect to the Class LTA-2C Interest, the Class A-2C
Certificates. With respect to the Class LTM-1 Interest, the Class M-1
Certificates. With respect to the Class LTM-2 Interest, the Class M-2
Certificates. With respect to the Class LTM-3 Interest, the Class M-3
Certificates. With respect to the Class LTM-4 Interest, the Class M-4
Certificates. With respect to the Class LTM-5 Interest, the Class M-5
Certificates. With respect to the Class LTM-6 Interest, the Class M-6
Certificates. With respect to the Class LTB-1 Interest, the Class B-1
Certificates. With respect to the Class LTB-2 Interest, the Class B-2
Certificates. With respect to the Class LTB-3 Interest, the Class B-3
Certificates.

     Relief Act: The Servicemembers Civil Relief Act or any similar state or
local law.

     Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended calendar month as a result of
the application of the Relief Act.

     REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code. References herein to "the REMICs" or "a REMIC" shall
mean any of (or, as the context requires, all of) the SWAP REMIC, the Lower Tier
REMIC and the Upper Tier REMIC.

     REMIC Pass-Through Rate: The Pass-Through Rate for a Class of Related
Certificates calculated by replacing "Available Funds Cap" in such definition
with "Upper Tier REMIC Net WAC Cap."

     REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and proposed,
temporary and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time as
well as provisions of applicable state laws.

     REMIC Regular Interests: Each of the interests in the Upper Tier REMIC as
set forth in the Preliminary Statement other than the Residual Interest.

     REMIC SWAP Rate: For each Distribution Date (and the related Accrual
Period), a per annum rate equal to the Fixed Rate under the Swap Agreement for
such Distribution Date, as set forth in the Prospectus Supplement.

     Remittance Report: As defined in Section 4.04(j) hereof.

     REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.

     Replacement Mortgage Loan: A Mortgage Loan substituted by a Seller for a
Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or


                                      -47-

<PAGE>

lower than the Maximum Mortgage Rate of the Deleted Mortgage Loan; (B) have a
Minimum Mortgage Rate no more than 1% per annum higher or lower than the Minimum
Mortgage Rate of the Deleted Mortgage Loan; (C) have the same index and Periodic
Rate Cap as that of the Deleted Mortgage Loan and a Gross Margin not more than
1% per annum higher or lower than that of the Deleted Mortgage Loan; (D) not
permit conversion of the related Mortgage Rate to a fixed Mortgage Rate and (F)
currently be accruing interest at a rate not more than 1% per annum higher or
lower than that of the Deleted Mortgage Loan; (3) have a similar or higher FICO
score or credit grade than that of the Deleted Mortgage Loan; (4) have a
Loan-to-Value Ratio (or Combined Loan-to-Value Ratio, in the case of the
Mortgage Loans in a second lien position) no higher than that of the Deleted
Mortgage Loan; (5) have a remaining term to maturity no greater than (and not
more than one year less than) that of the Deleted Mortgage Loan; (6) provide for
a Prepayment Charge on terms substantially similar to those of the Prepayment
Charge, if any, of the Deleted Mortgage Loan; (7) have the same lien priority as
the Deleted Mortgage Loan; (8) constitute the same occupancy type as the Deleted
Mortgage Loan; and (9) comply with each representation and warranty set forth in
Section 2.03 hereof.

     Request for Release: The Request for Release of Documents submitted by the
Servicer to the Trustee (or its custodian), substantially in the form of Exhibit
I hereto.

     Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy that is required to be maintained from time to time under this Agreement,
including, without limitation, in the case of the MI Mortgage Loans, the MI
Policy.

     Required Percentage: As of any Distribution Date, the quotient of (1) the
excess of (A) the Stated Principal Balances of the Mortgage Loans as of such
Distribution Date, over (B) the Certificate Principal Balance of the most senior
Class of Certificates outstanding, prior to giving effect to distributions to be
made on such Distribution Date and (2) the Stated Principal Balance of the
Mortgage Loans as of such Distribution Date.

     Reserve Interest Rate: With respect to any Interest Determination Date, the
rate per annum that the Trustee determines to be (1) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 0.03125%) of the
one-month United States dollar lending rates which New York City banks selected
by the Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (2)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Trustee are quoting on such Interest Determination Date to leading
European banks.

     Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class R Certificate other
than distributions in respect of the Class LTR Interest and distributions to the
extent attributable to an interest rate in excess of the REMIC Pass-Through
Rate.

     Responsible Officer: When used with respect to the Trustee or the Servicer,
any officer of the Trustee or the Servicer with direct responsibility for the
administration of this Agreement and also means any other officer to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.

     Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.

     S&P: Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or
any successor in interest.


                                      -48-

<PAGE>

     Sale Agreement: Either of the MLMC Sale Agreement or the MLML Sale
Agreement.

     Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.

     Section 302 Requirements: Any rules or regulations promulgated pursuant to
the Sarbanes-Oxley Act of 2002 (as such may be amended from time to time).

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

     Seller: Either MLMC or MLML.

     Servicer: Wilshire Credit Corporation, a Nevada corporation, or its
successor in interest.

     Servicer Advance Date: As to any Distribution Date, the related Servicer
Remittance Date.

     Servicer's Assignee: As defined in Section 10.14(a).

     Servicer Remittance Date: With respect to any Distribution Date, the later
of (x) the date that is two Business Days after the 15th day of the month in
which the related Distribution Date occurs and (y) the 18th day (or if such day
is not a Business Day, the next preceding Business Day) of the month in which
such Distribution Date occurs.

     Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations hereunder, including, but not limited to, the cost of (1) the
preservation, inspection, restoration and protection of a Mortgaged Property,
including without limitation advances in respect of real estate taxes and
assessments, (2) any collection, enforcement or judicial proceedings, including
without limitation foreclosures, collections and liquidations, (3) the
conservation, management, sale and liquidation of any REO Property (4) executing
and recording instruments of satisfaction, deeds of reconveyance, substitutions
of trustees on deeds of trust or assignments of mortgage to the extent not
otherwise recovered from the related Mortgagors or payable under this Agreement,
(5) correcting errors of prior servicers; tax tracking; title research; flood
certification and lender paid mortgage insurance, (6) obtaining or correcting
any legal documentation required to be included in the Mortgage Files and
reasonably necessary for the Servicer to perform its obligations under this
Agreement and (7) compliance with the obligations under Sections 3.01 and 3.10.

     Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of (x) the Servicing Fee Rate and (y) the Stated
Principal Balance of such Mortgage Loan as of the preceding Distribution Date
or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date for the period covered by such payment of interest.

     Servicing Fee Rate: 0.50% per annum.

     Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name and
facsimile signature appear on a list of servicing officers furnished to the
Trustee by the Servicer on the Closing Date pursuant to this Agreement, as such
lists may from time to time be amended.

     Servicing Transfer Costs: In the event that the Servicer does not reimburse
the Trustee under this Agreement, all costs associated with the transfer of
servicing from the predecessor Servicer, including,


                                      -49-

<PAGE>

without limitation, any costs or expenses associated with the termination of the
predecessor Servicer, the appointment of a successor servicer, the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Trustee or any successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee or successor servicer to service the Mortgage Loans properly
and effectively.

     SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.

     Startup Day: As defined in Section 2.07 hereof.

     Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance thereof,
and (2) as of any Distribution Date, such Cut-off Date Principal Balance, minus
the sum of (A) the principal portion of the Scheduled Payments (x) due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date and (y) that were received by the Servicer as of the close of
business on the Determination Date related to such Distribution Date or with
respect to which Advances were made on the Servicer Advance Date prior to such
Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.

     Stepdown Date: The later to occur of (1) the Distribution Date in December
2008 or (2) the first Distribution Date on which (A) the Class A Certificate
Principal Balance (reduced by the Principal Funds with respect to such
Distribution Date) is less than or equal to (B) 61.50% of the Stated Principal
Balances of the Mortgage Loans as of such Distribution Date.

     Stepdown Required Loss Percentage: For any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:


                                      -50-

<PAGE>

<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN   STEPDOWN REQUIRED LOSS PERCENTAGE
------------------------------   ---------------------------------
<S>                              <C>
December 2008 -- November 2009   2.85% with respect to December 2008, plus an
                                 additional 1/12th  of 0.95% for each month
                                 thereafter

December 2009 -- November 2010   3.80% with respect to December 2009, plus an
                                 additional 1/12th  of 0.70% for each month
                                 thereafter

December 2010 -- November 2011   4.50% with respect to December 2010, plus an
                                 additional 1/12th  of 0.30% for each month
                                 thereafter

December 2011 and thereafter     4.80%
</TABLE>

     Stepdown Trigger Event: With respect to the Certificates on or after the
Stepdown Date, a Distribution Date on which (1) the quotient of (A) the
aggregate Stated Principal Balance of all Mortgage Loans which are 60 or more
days Delinquent measured on a rolling three month basis (including, for the
purposes of this calculation, Mortgage Loans in foreclosure and REO Properties)
and (B) the Stated Principal Balance of the Mortgage Loans as of the last day of
the preceding calendar month, equals or exceeds the product of (i) 41.00% and
(ii) the Required Percentage or (2) the quotient (expressed as a percentage) of
(A) the aggregate Realized Losses incurred from the Cut-off Date through the
last day of the calendar month preceding such Distribution Date and (B) the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date exceeds
the Required Loss Percentage.

     Subordinated Certificates: The Class M and Class B Certificates.

     Subsequent Recovery: Any amount received on a Mortgage Loan (net of amounts
reimbursed to the Servicer related to Liquidated Mortgage Loans) subsequent to
such Mortgage Loan being determined to be a Liquidated Mortgage Loan.

     Subservicing Agreement: As defined in Section 3.02(a).

     Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).

     Supplemental Interest Trust: The separate trust, established pursuant to
Section 4.04(l) of this Agreement and held by the Trustee for the benefit of the
holders of the Certificates as a segregated subtrust of the Trust Fund, in which
the Swap Agreement will be held, out of which any Swap Termination Payments or
Net Swap Payments owed to the Swap Counterparty will be paid, certain
distributions to Certificateholders will be made, and into which any Swap
Termination Payments or Net Swap Payments received from the Swap Counterparty
will be deposited as set forth in Section 4.04 hereof.

     Swap Agreement: The novated confirmations, dated as of November 30, 2005,
among the Swap Counterparty and the Trust Fund or any other cap agreement or
swap agreement (including any related schedules) held by the Supplemental
Interest Trust pursuant to Section 4.04(l) hereof.


                                      -51-

<PAGE>

     Swap Counterparty: The Bank of New York or any successor counterparty who
meets the requirements set forth in the Swap Agreement.

     Swap LIBOR: With respect to any Distribution Date (and the related Accrual
Period) the product of (i) the Floating Rate Option (as defined in the Swap
Agreement for the related Swap Payment Date), (ii) two and (iii) the quotient of
(a) the actual number of days in the Accrual Period for the Lower Tier REMIC
Interests divided by (b) 30.

     Swap Payment Date: For so long as the Swap Agreement is in effect or
amounts remain unpaid thereunder, the Business Day immediately preceding each
Distribution Date.

     SWAP REMIC: As described in the Preliminary Statement and Section 2.07.

     SWAP REMIC Interests: Each of the interests in the SWAP REMIC as set forth
in the Preliminary Statement.

     SWAP REMIC Regular Interests: Each of the SWAP REMIC Interests other than
the Class SWR Interest.

     Swap Termination Payment: Any payment payable by the Supplemental Interest
Trust or the Swap Counterparty upon termination of the Swap Agreement as a
result of an Event of Default (as defined in the Swap Agreement) or a
Termination Event (as defined in the Swap Agreement).

     Tax Matters Person: The Person designated as "tax matters person" in the
manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.

     Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Certificate.

     Transfer Agreement: Each document set out on Exhibit J-1 and Exhibit J-2
hereto pursuant to which the related Seller acquired any Mortgage Loan from the
Transferor of such Mortgage Loan.

     Transferor: Any originator of a Mortgage Loan.

     Trust Fund: The corpus of the trust (the "Merrill Lynch Mortgage Investors
Trust, Series 2005-HE2") created hereunder consisting of (i) the Mortgage Loans
and all interest and principal received on or with respect thereto on and after
the Cut-off Date to the extent not applied in computing the Cut-off Date
Principal Balance thereof, exclusive of interest not required to be deposited in
the Collection Account; (ii) the Collection Account and the Certificate Account
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans,
including, without limitation, the MI Policy; (v) the Supplemental Interest
Trust, which in turn holds the Swap Agreement; (vi) the Cap Contract and Cap
Contract Account; and (vii) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.

     Trustee: Wells Fargo Bank, N.A., a national banking association, not in its
individual capacity, but solely in its capacity as trustee for the benefit of
the Certificateholders under this Agreement, and any successor thereto, and any
corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.


                                      -52-

<PAGE>

     Uncertificated Class C Interest: An uncertificated REMIC Regular Interest
having the characteristics described in the Preliminary Statement.

     United States Person: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for federal income tax purposes organized in or under the laws of
the United States or any state thereof or the District of Columbia (unless, in
the case of a partnership, Treasury regulations provide otherwise), (iii) an
estate the income of which is includible in gross income for United States tax
purposes regardless of its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to
the extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States Persons.

     Unpaid Realized Loss Amount: The Class M-1 Unpaid Realized Loss Amount,
Class M-2 Unpaid Realized Loss Amount, Class M-3 Unpaid Realized Loss Amount,
Class M-4 Unpaid Realized Loss Amount, Class M-5 Unpaid Realized Loss Amount,
Class M-6 Unpaid Realized Loss Amount, Class B-1 Unpaid Realized Loss Amount,
Class B-2 Unpaid Realized Loss Amount, Class B-3 Unpaid Realized Loss Amount and
Class C Unpaid Realized Loss Amount, collectively.

     Upper Tier REMIC: As described in the Preliminary Statement and Section
2.07.

     Upper Tier REMIC Net WAC Cap: For any Distribution Date, the Net Rate
(multiplied, in the case of the Class UTB-2 Interest and the Class UTB-3
Interest, by a fraction the numerator of which is the actual number of days in
the Accrual Period for the Lower Tier REMIC Interests and the denominator of
which is 30).

     USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.

     Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated as follows: (1) 98% to the Class A, Class M and Class B
Certificates, with the allocation among such Certificates to be in proportion to
the Class Certificate Principal Balance of each Class relative to the Class
Certificate Principal Balance of all other Classes and (2) each Class of the
Class C and Class P will be allocated 1% of the Voting Rights Certificates.
Voting Rights will be allocated among the Certificates of each such Class in
accordance with their respective Percentage Interests.

                                   ARTICLE II
                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

          SECTION 2.01. Conveyance of Mortgage Loans.

          The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).


                                      -53-

<PAGE>

          The parties hereto agree and understand that it is not intended that
any Mortgage Loan be included in the Trust that is, without limitation, a
"High-Cost Home Loan" as defined by the Home Ownership and Equity Protection Act
of 1994 or any other applicable anti-predatory lending laws, including but not
limited to (i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003; (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004;
(iii) a "High-Cost Home Loan" as defined in the Massachusetts Predatory Home
Loan Practices Act effective November 7, 2004 or (iv) a "High-Cost Home Loan" as
defined by the Indiana High Cost Home Loan Law effective January 1, 2005.

          In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee, the following documents or instruments with
respect to each Mortgage Loan:

          (A) The Original Mortgage Note endorsed in blank or, "Pay to the order
     of Wells Fargo Bank, N.A., as trustee, without recourse" together with all
     riders thereto. The Mortgage Note shall include all intervening
     endorsements showing a complete chain of the title from the Transferor to
     [___________].

          (B) Except as provided below and for each Mortgage Loan that is not a
     MERS Loan, the original recorded Mortgage together with all riders thereto,
     with evidence of recording thereon, or, if the original Mortgage has not
     yet been returned from the recording office, a copy of the original
     Mortgage together with all riders thereto certified to be true copy of the
     original of the Mortgage that has been delivered for recording in the
     appropriate recording office of the jurisdiction in which the Mortgaged
     Property is located and in the case of each MERS Loan, the original
     Mortgage together with all riders thereto, noting the presence of the MIN
     of the Loan and either language indicating that the Mortgage Loan is a MOM
     Loan or if the Mortgage Loan was not a MOM Loan at origination, the
     original Mortgage and the assignment thereof to MERS, with evidence of
     recording indicated thereon, or a copy of the Mortgage certified by the
     public recording office in which such Mortgage has been recorded.

          (C) In the case of each Mortgage Loan that is not a MERS Loan, the
     original Assignment of each Mortgage, endorsed either in blank or, to
     "Wells Fargo Bank, N.A., as trustee"

          (D) The original policy of title insurance (or a preliminary title
     report, commitment or binder if the original title insurance policy has not
     been received from the title insurance company).

          (E) Originals of any intervening assignments of the Mortgage, with
     evidence of recording thereon or, if the original intervening assignment
     has not yet been returned from the recording office, a copy of such
     assignment certified to be a true copy of the original of the assignment
     which has been sent for recording in the appropriate jurisdiction in which
     the Mortgaged Property is located.

          (F) Originals of all assumption and modification agreements, if any.

          (G) If in connection with any Mortgage Loan, the Depositor cannot
     deliver the Mortgage, Assignments of Mortgage or assumption, consolidation
     or modification, as the case may be, with evidence of recording thereon, if
     applicable, concurrently with the execution and delivery of this Agreement
     solely because of a delay caused by the public recording office where such
     Mortgage, Assignments of Mortgage or assumption, consolidation or
     modification, as the case may be, has been delivered for recordation, the
     Depositor shall deliver or cause to be


                                      -54-

<PAGE>

     delivered to the Trustee written notice stating that such Mortgage or
     assumption, consolidation or modification, as the case may be, has been
     delivered to the appropriate public recording office for recordation.
     Thereafter, the Depositor shall deliver or cause to be delivered to the
     Trustee such Mortgage, Assignments of Mortgage or assumption, consolidation
     or modification, as the case may be, with evidence of recording indicated
     thereon, if applicable, upon receipt thereof from the public recording
     office. To the extent any required endorsement is not contained on a
     Mortgage Note or an Assignment of Mortgage, the Depositor shall make or
     cause such endorsement to be made.

          (H) With respect to any Mortgage Loan, none of the Depositor, the
     Servicer or the Trustee shall be obligated to cause to be recorded the
     Assignment of Mortgage referred to in this Section 2.01. In the event an
     Assignment of Mortgage is not recorded, the Servicer shall have no
     liability for its failure to receive and act on notices related to such
     Assignment of Mortgage.

          The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor nor the Servicer shall take any action
inconsistent with such ownership and shall not claim any ownership interest
therein. The Depositor and the Servicer shall respond to any third party
inquiries with respect to ownership of the Mortgage Loans by stating that such
ownership is held by the Trustee on behalf of the Certificateholders. Mortgage
documents relating to the Mortgage Loans not delivered to the Trustee are and
shall be held in trust by the Servicer, for the benefit of the Trustee as the
owner thereof, and the Servicer's possession of the contents of each Mortgage
File so retained is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer is in a custodial capacity
only. The Depositor agrees to take no action inconsistent with the Trustee's
ownership of the Mortgage Loans, to promptly indicate to all inquiring parties
that the Mortgage Loans have been sold and to claim no ownership interest in the
Mortgage Loans.

          It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from a Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of such Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of a
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.

          In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee for the benefit of the Certificateholders its rights and interests under
the Sale Agreements, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreements, the rights in
the Transfer Agreements described therein, and the benefit of the repurchase
obligations and the obligation of the Seller contained


                                      -55-

<PAGE>

in the Sale Agreements to take, at the request of the Depositor or the Trustee,
all action on its part which is reasonably necessary to ensure the
enforceability of a Mortgage Loan. The Trustee hereby accepts such assignment,
and shall be entitled to exercise all rights of the Depositor under the Sale
Agreements as if, for such purpose, it were the Depositor. The foregoing sale,
transfer, assignment, set-over, deposit and conveyance does not and is not
intended to result in creation or assumption by the Trustee of any obligation of
the Depositor, the Sellers, or any other Person in connection with the Mortgage
Loans or any other agreement or instrument relating thereto.

          SECTION 2.02. Acceptance by the Trustee of the Mortgage Loans.

          Except as set forth in the Exception Report delivered
contemporaneously herewith (the "Exception Report"), the Trustee acknowledges
receipt of the Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does not acknowledge receipt of all documents required to be included
in such Mortgage File) with respect to each Mortgage Loan and declares that it
holds and will hold such documents and any other documents constituting a part
of the Mortgage Files delivered to it in trust for the use and benefit of all
present and future Certificateholders. The Depositor will cause the related
Seller to repurchase any Mortgage Loan to which a material exception was taken
in the Exception Report unless such exception is cured to the satisfaction of
the Trustee within 45 Business Days of the Closing Date.

          The Trustee acknowledges receipt of the Swap Agreement (a form of
which is attached hereto) that will be held in the Supplemental Interest Trust
and is hereby instructed to enter into the Swap Agreement, not in its individual
capacity, but solely as Trustee for the MLMI Mortgage Trust, Series 2005-HE2 and
for the Supplemental Interest Trust.

          The Trustee acknowledges receipt of the Cap Contract (the form of
which is attached hereto), the Transfer Agreement, the Bring Down Letter and the
Sale Agreements.

          The Trustee agrees, for the benefit of Certificateholders, to review
each Mortgage File delivered to it within 60 days after the Closing Date to
ascertain and to certify, within 70 days of the Closing Date, to the Depositor
and the Servicer that all documents required by Section 2.01 have been executed
and received, and that such documents relate to the Mortgage Loans identified in
Exhibit B-1 that have been conveyed to it. If the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective
(that is, mutilated, damaged, defaced or unexecuted) in any material respect,
the Trustee shall promptly (and in any event within no more than five Business
Days) after such finding so notify the Servicer, the related Seller and the
Depositor. In addition, the Trustee shall also notify the Servicer, the related
Seller and the Depositor if the original Mortgage with evidence of recording
thereon with respect to a Mortgage Loan is not received within 70 days of the
Closing Date; if it has not been received because of a delay caused by the
public recording office where such Mortgage has been delivered for recordation,
the Depositor shall deliver or cause to be delivered to the Trustee written
notice stating that such Mortgage has been delivered to the appropriate public
recording office for recordation and thereafter the Depositor shall deliver or
cause to be delivered such Mortgage with evidence of recording thereon upon
receipt thereof from the public recording office. The Trustee shall request that
the Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 2.03, within 90
days from the date the related Seller was notified of such omission or defect
and, if the related Seller does not correct or cure such omission or defect
within such period, that the related Seller purchase such Mortgage Loan from the
Trust Fund within 90 days from the date the Trustee notified the related Seller
of such omission, defect or other irregularity at the Purchase Price of such
Mortgage Loan. The Purchase Price for any Mortgage Loan purchased pursuant to
this Section 2.02 shall be paid to the Servicer and deposited by the Servicer in
the Certificate Account or Collection Account, as appropriate, promptly upon
receipt, and, upon receipt by


                                      -56-

<PAGE>

the Trustee of written notification of such deposit signed by a Servicing
Officer, the Trustee, upon receipt of a Request for Release, shall promptly
release to the related Seller the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment, without
recourse, as shall be requested by the related Seller and necessary to vest in
the Seller or its designee, as the case may be, any Mortgage Loan released
pursuant hereto, and the Trustee shall have no further responsibility with
regard to such Mortgage Loan. It is understood and agreed that the obligation of
the related Seller to purchase, cure or substitute any Mortgage Loan as to which
a material defect in or omission of a constituent document exists shall
constitute the sole remedy respecting such defect or omission available to the
Trustee on behalf of Certificateholders. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the Depositor
or the Trustee pursuant to the Sale Agreements, the Transfer Agreements and the
Bring-Down Letters. The Trustee shall be under no duty or obligation to inspect,
review and examine such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, recordable or appropriate to the
represented purpose, or that they have actually been recorded, or that they are
other than what they purport to be on their face. The Servicer and the Trustee
shall keep confidential the name of each Mortgagor except as required by this
Agreement and the Servicer and the Trustee shall not solicit any such Mortgagor
for the purpose of refinancing the related Mortgage Loan; notwithstanding
anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) disclosure of any and all information that is or becomes publicly
known, or information obtained by the Trustee from sources other than the other
parties hereto, (ii) disclosure of any and all information (A) if required to do
so by any applicable law, rule or regulation, (B) to any government agency or
regulatory body having or claiming authority to regulate or oversee any aspects
of the Trustee's business or that of its affiliates, (C) pursuant to any
subpoena, civil investigation demand or similar demand or request of any court,
regulatory authority, arbitrator or arbitration to which Trustee or any
affiliate or an officer, director, employer or shareholder thereof is a party or
(D) to any affiliate, independent or internal auditor, agent, employee or
attorney of the Trustee having a need to know the same, provided that the
Trustee advises such recipient of the confidential nature of the information
being disclosed, or (iii) any other disclosure authorized by the Depositor.

          Within 70 days of the Closing Date, the Trustee (or its custodian)
shall deliver to the Depositor and the Servicer the Trustee's Certification,
substantially in the form of Exhibit D attached hereto, evidencing the
completeness of the Mortgage Files, with any exceptions noted thereto.

          SECTION 2.03. Representations, Warranties and Covenants of the
     Depositor.

          (a) The Depositor hereby represents and warrants to the Servicer and
the Trustee as follows, as of the date hereof:

          (i) The Depositor is duly organized and is validly existing as a
     corporation in good standing under the laws of the State of Delaware and
     has full power and authority (corporate and other) necessary to own or hold
     its properties and to conduct its business as now conducted by it and to
     enter into and perform its obligations under this Agreement and the Sale
     Agreement.

          (ii) The Depositor has the full corporate power and authority to
     execute, deliver and perform, and to enter into and consummate the
     transactions contemplated by, this Agreement and the Sale Agreements and
     has duly authorized, by all necessary corporate action on its part, the
     execution, delivery and performance of this Agreement and the Sale
     Agreements; and this Agreement and the Sale Agreements, assuming the due
     authorization, execution and delivery hereof by the other parties hereto,
     constitutes a legal, valid and binding obligation of the Depositor,
     enforceable against the Depositor in accordance with its terms, subject, as
     to enforceability, to (i) bankruptcy, insolvency, reorganization,
     moratorium and other similar laws


                                      -57-

<PAGE>

     affecting creditors' rights generally and (ii) general principles of
     equity, regardless of whether enforcement is sought in a proceeding in
     equity or at law.

          (iii) The execution and delivery of this Agreement and the Sale
     Agreements by the Depositor, the consummation of the transactions
     contemplated by this Agreement and the Sale Agreements, and the fulfillment
     of or compliance with the terms hereof are in the ordinary course of
     business of the Depositor and will not (A) result in a material breach of
     any term or provision of the charter or by-laws of the Depositor or (B)
     materially conflict with, result in a violation or acceleration of, or
     result in a material default under, the terms of any other material
     agreement or instrument to which the Depositor is a party or by which it
     may be bound or (C) constitute a material violation of any statute, order
     or regulation applicable to the Depositor of any court, regulatory body,
     administrative agency or governmental body having jurisdiction over the
     Depositor; and the Depositor is not in breach or violation of any material
     indenture or other material agreement or instrument, or in violation of any
     statute, order or regulation of any court, regulatory body, administrative
     agency or governmental body having jurisdiction over it which breach or
     violation may materially impair the Depositor's ability to perform or meet
     any of its obligations under this Agreement.

          (iv) No litigation is pending, or, to the best of the Depositor's
     knowledge, threatened, against the Depositor that would materially and
     adversely affect the execution, delivery or enforceability of this
     Agreement and the Sale Agreements or the ability of the Depositor to
     perform its obligations under this Agreement and the Sale Agreements in
     accordance with the terms hereof.

          (v) No consent, approval, authorization or order of any court or
     governmental agency or body is required for the execution, delivery and
     performance by the Depositor of, or compliance by the Depositor with, this
     Agreement and the Sale Agreements or the consummation of the transactions
     contemplated hereby, or if any such consent, approval, authorization or
     order is required, the Depositor has obtained the same. The Depositor
     hereby represents and warrants to the Trustee with respect to each Mortgage
     Loan as of the Closing Date, and following the transfer of the Mortgage
     Loans to it by the related Seller, the Depositor had good title to the
     Mortgage Loans and the Mortgage Notes were subject to no offsets, claims,
     liens, mortgage, pledge, charge, security interest, defenses or
     counterclaims.

          (b) The representations and warranties of each Transferor with respect
to the related Mortgage Loans in the applicable Transfer Agreement, which have
been assigned to the Trustee hereunder, were made as of the date specified in
the applicable Transfer Agreement and brought forward to the Closing Date
pursuant to the related Bring Down Letter, except as otherwise noted on Exhibit
J-1 or Exhibit J-2. The representations and warranties of each Transferor with
respect to the Mortgage Loans contained in the Bring Down Letter were made as of
the Closing Date, except as otherwise noted on Exhibit J-1 or Exhibit J-2. The
representations and warranties of the related Seller with respect to the
Mortgage Loans contained in the related Sale Agreement were made as of the
Closing Date. To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of both (i) a representation or warranty of
the applicable Transferor under the applicable Transfer Agreement and (ii) a
representation or warranty of the related Seller under the related Sale
Agreement, the obligations of the related Seller under the related Sale
Agreement shall be enforced against the Transferor or such Seller, as
applicable, as set forth in such Sale Agreement. The Trustee acknowledges that
the related Seller shall have no obligation or liability with respect to any
breach of a representation or warranty made by it with respect to any related
Mortgage Loans, except as otherwise set forth in the related Sale Agreement, if
the fact, condition or event constituting such breach also constitutes a breach
of a representation or warranty made by the related Transferor in the related
Transfer Agreement, without regard to whether the related


                                      -58-

<PAGE>

Transferor fulfills its contractual obligations in respect of such
representation or warranty. The Trustee also acknowledges that the related
Seller shall have no obligation or liability with respect to any breach of a
representation or warranty made solely by the Transferors with respect to the
Mortgage Loans, without regard to whether the related Transferor fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee further acknowledges that the Depositor shall have no obligation or
liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(v)) under
any circumstances.

          In addition to the representations and warranties of the Transferors
in the Transfer Agreements that were brought forward to the Closing Date
pursuant to the Bring Down Letter, with respect to each Mortgage Loan, each
Transferor made certain additional covenants regarding such Mortgage Loan, as
set forth in the related Transfer Agreement. With respect to any breach of such
additional covenants that materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the related Seller shall (1) use
reasonable efforts to enforce such covenant against the related Transferor and
(2) if the related Seller successfully enforces any obligation of the related
Transferor to repurchase such Mortgage Loan, the related Seller shall repurchase
such Mortgage Loan in accordance with this Section 2.03. If the related Seller
does not successfully enforce the obligation, if any, of the Transferor to
repurchase a Mortgage Loan with respect to any breach of any such additional
covenants, the related Seller shall have no obligation or right to repurchase or
cure such Mortgage Loan.

          (c) Upon discovery by any of the Depositor, the Servicer or the
Trustee of a breach of any of such representations and warranties that adversely
and materially affects the value of the related Mortgage Loan, Prepayment
Charges or the interests of the Certificateholders, the party discovering such
breach shall give prompt written notice to the other parties. Within 90 days of
the discovery of such breach of any representation or warranty, the applicable
Transferor or the related Seller, as applicable, shall either (a) cure such
breach in all material respects, (b) repurchase such Mortgage Loan or any
property acquired in respect thereof from the Trustee at the Purchase Price or
(c) within the two year period following the Closing Date, substitute a
Replacement Mortgage Loan for the affected Mortgage Loan. In the event of
discovery of a breach of any representation and warranty of any Transferor or
the related Seller, the Trustee's rights shall be enforced under the applicable
Transfer Agreement and the related Sale Agreement for the benefit of
Certificateholders. If a breach of the representations and warranties set forth
in the Transfer Agreement hereof exists solely due to the unenforceability of a
Prepayment Charge, the Trustee or the other party having notice thereof shall
notify the Servicer thereof and not seek to enforce the repurchase remedy
provided for herein unless such Mortgage Loan is not current. In the event of a
breach of the representations and warranties with respect to the Mortgage Loans
set forth in a Transfer Agreement, the Trustee shall enforce the right of the
Trust Fund to be indemnified for such breach of representation and warranty. In
the event that such breach relates solely to the unenforceability of a
Prepayment Charge, amounts received in respect of such indemnity up to the
amount of such Prepayment Charge shall be distributed pursuant to Section
4.04(b). As provided in each Sale Agreement, if a Seller substitutes for a
Mortgage Loan for which there is a breach of any representations and warranties
in the related Transfer Agreement which adversely and materially affects the
value of such Mortgage Loan and such substitute mortgage loan is not a
Replacement Mortgage Loan, under the terms of each Sale Agreement, the
applicable Seller will, in exchange for such substitute Mortgage Loan, (i)
provide the applicable Purchase Price for the affected Mortgage Loan or (ii)
within two years of the Closing Date, substitute such affected Mortgage Loan
with a Replacement Mortgage Loan. Any such substitution shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit I and shall not be effected unless it is
within two years of the Startup Day. Each Seller indemnifies and holds the Trust
Fund, the Trustee, the Depositor, the Servicer and each Certificateholder
harmless against any and all taxes, claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Trust Fund, the Trustee, the Depositor, the
Servicer and any Certificateholder may sustain in


                                      -59-

<PAGE>

connection with any actions of such Seller relating to a repurchase of a
Mortgage Loan other than in compliance with the terms of this Section 2.03 and
the related Sale Agreement, to the extent that any such action causes (i) any
federal or state tax to be imposed on the Trust Fund or any REMIC provided for
herein, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup day" under Section 860G(d)(1) of the Code, or (ii) any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificate is
outstanding. In furtherance of the foregoing, if the Transferor or a Seller, as
applicable, is not a member of MERS and repurchases a Mortgage Loan which is
registered on the MERS System, the Transferor or the related Seller, as
applicable, at its own expense and without any right of reimbursement, shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to the Transferor or the related Seller,
as applicable, and shall cause such Mortgage to be removed from registration on
the MERS System in accordance with MERS' rules and regulations.

          With respect to any Mortgage Loan repurchased by a Seller pursuant to
the related Sale Agreement or by any Transferor pursuant to the applicable
Transfer Agreement, the principal portion of the funds received by the Servicer
in respect of such repurchase of a Mortgage Loan will be considered a Principal
Prepayment and shall be deposited in the Certificate Account pursuant to Section
3.05. Upon receipt by the Trustee of notice from the Servicer of receipt by the
Servicer of the full amount of the Purchase Price for a Deleted Mortgage Loan,
and upon receipt by the Trustee of the Mortgage File for a Replacement Mortgage
Loan substituted for a Deleted Mortgage Loan and a Request for Release, the
Trustee shall release and reassign to the related Seller or the applicable
Transferor, as applicable, the related Mortgage File for the Deleted Mortgage
Loan and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, representation or warranty, as shall be necessary
to vest in such party or its designee or assignee title to any Deleted Mortgage
Loan released pursuant hereto, free and clear of all security interests, liens
and other encumbrances created by this Agreement, which instruments shall be
prepared by the Depositor, the related Seller or the related Transferor, and the
Trustee shall have no further responsibility with respect to the Mortgage File
relating to such Deleted Mortgage Loan.

          With respect to each Replacement Mortgage Loan to be delivered to the
Trustee pursuant to the terms of this Article II in exchange for a Deleted
Mortgage Loan: (i) the applicable Transferor or the related Seller, as
applicable, must deliver to the Trustee (or its custodian) the Mortgage File for
the Replacement Mortgage Loan containing the documents set forth in Section 2.01
along with a written certification certifying as to the Mortgage Loan satisfying
all requirements under the definition of Replacement Mortgage Loan and the
delivery of such Mortgage File and containing the granting language set forth in
Section 2.01; and (ii) the Depositor will be deemed to have made, with respect
to such Replacement Mortgage Loan, each of the representations and warranties
made by it with respect to the related Deleted Mortgage Loan. The Trustee (or
its custodian) shall review the Mortgage File with respect to each Replacement
Mortgage Loan and certify to the Depositor that all documents required by
Section 2.01(A)-(B), (C) (if applicable), and (D)-(E) have been executed and
received.

          For any month in which a Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, such Seller will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Trust Fund in connection with
any violation relating to such Deleted Mortgage Loan of any predatory or abusive
lending law shall be remitted by such Seller to the Trustee for deposit


                                      -60-

<PAGE>

into the Certificate Account by such Seller on the Determination Date for the
Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.

          Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions.

          The Trustee shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans.
Upon such substitution by a Seller, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement and the applicable
Sale Agreement, including all applicable representations and warranties thereof
included in the applicable Sale Agreement as of the date of substitution.

          (d) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in this Section 2.03, (ii) of the related
Seller and the Depositor set forth in the related Sale Agreement and assigned to
the Trustee by the Depositor hereunder and (iii) of each Transferor, assigned by
the related Seller to the Depositor pursuant to the related Sale Agreement and
assigned to the Trustee by the Depositor hereunder shall each survive delivery
of the Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to
the Trustee and shall continue throughout the term of this Agreement.

          (e) The Depositor shall deliver a copy of the Mortgage Loan Schedule
to the Servicer on the Closing Date.

          (f) The Depositor shall notify the Servicer and the Trustee when any
NIM Notes are issued and when such NIM Notes are no longer outstanding.

               SECTION 2.04. Representations and Warranties of the Servicer.

                    The Servicer hereby represents and warrants to the Depositor
and the Trustee as follows, as of the date hereof:

                    (i) The Servicer is duly organized and is validly existing
as a corporation in good standing under the laws of the State of Nevada and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by the Servicer in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing business
laws of any such state, to the extent necessary to ensure its ability to enforce
each Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.

                    (ii) The Servicer has the corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions


                                      -61-

<PAGE>

contemplated by this Agreement and has duly authorized by all necessary
corporate action on the part of the Servicer the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding hereunder may be brought.

                    (iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans under this Agreement, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Servicer and will not (A) result in a material breach
of any term or provision of the charter or by-laws of the Servicer or (B)
materially conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other material
agreement or instrument to which the Servicer is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Servicer's ability to perform or meet any of
its obligations under this Agreement.

                    (iv) The Servicer is an approved servicer of mortgage loans
for Fannie Mae and is an approved servicer of mortgage loans for Freddie Mac.

                    (v) Except as previously disclosed to the Depositor in the
Prospectus Supplement, no litigation is pending or, to the best of the
Servicer's knowledge, threatened, against the Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement or
the ability of the Servicer to service the Mortgage Loans or to perform any of
its other obligations under this Agreement in accordance with the terms hereof.

                    (vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Servicer has
obtained the same.

                    (vii) The Servicer has fully furnished and will fully
furnish (for the period it serviced the Mortgage Loans), in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company on a
monthly basis.

          SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which
     are not "Qualified Mortgages".

          Upon discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the party discovering such fact shall promptly
(and in any event within 5 Business Days of discovery) give written notice
thereof to the other parties. In connection therewith, the Depositor shall, at
the Depositor's option, either (i) substitute, if the conditions in Section
2.03(c) with respect to substitutions are satisfied, a


                                      -62-

<PAGE>

Replacement Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the
affected Mortgage Loan within 90 days of such discovery in the same manner as it
would a Mortgage Loan for a breach of representation or warranty contained in
Section 2.03. The Trustee, upon the written direction of the Depositor, shall
reconvey to the Depositor the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty contained in Section
2.03.

          SECTION 2.06. Authentication and Delivery of Certificates.

          The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, the Trustee has
caused to be authenticated and delivered to or upon the order of the Depositor,
in exchange for the Mortgage Loans, Certificates duly authenticated by the
Trustee in authorized denominations evidencing ownership of the entire Trust
Fund. The Trustee agrees to hold the Trust Fund and exercise the rights referred
to above for the benefit of all present and future Holders of the Certificates
and to perform its duties set forth in this Agreement in accordance with the
provisions hereof.

          SECTION 2.07. REMIC Elections.

          (a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of the Upper Tier REMIC, the Lower Tier
REMIC and the SWAP REMIC as a REMIC. The Trustee shall sign the returns
providing for such elections and such other tax or information returns which are
required to be signed by the Trustee under applicable law. This Agreement shall
be construed so as to carry out the intention of the parties that each of the
Upper Tier REMIC, the Lower Tier REMIC and the SWAP REMIC be treated as a REMIC
at all times prior to the date on which the Trust Fund is terminated.

          (b) The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. Each REMIC's fiscal year shall be the calendar year.

          The SWAP REMIC shall consist of all of the assets of the Trust Fund
other than (i) the interests issued by the SWAP REMIC and the interests issued
by the Lower Tier REMIC, (ii) the rights to receive amounts distributable to the
Class P Certificates pursuant to Section 4.04(b), (iii) the Cap Contract and the
Cap Contract Account, (iv) the grantor trusts described in Section 2.07 hereof
and (v) the Swap Agreement and the Supplemental Interest Trust. The SWAP REMIC
shall issue the SWAP REMIC Regular Interests which shall be designated as
regular interests of such REMIC and shall issue the Class SWR Interest that
shall be designated as the sole class of residual interest in the SWAP REMIC.
Each of the SWAP REMIC Regular Interests shall have the characteristics set
forth in the Preliminary Statement and this Section 2.07.

          The Lower Tier REMIC shall consist of the SWAP REMIC Regular
Interests. The Lower Tier REMIC shall issue the Lower Tier REMIC Regular
Interests which shall be designated as regular interests of such REMIC and shall
issue the Class LTR Interest that shall be designated as the sole class of
residual interest in the Lower Tier REMIC. Each of the Lower Tier REMIC Regular
Interests shall have the characteristics set forth in its definition and the
Preliminary Statement.

          The assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The REMIC Regular Interests shall be designated as the
regular interests in the Upper Tier REMIC and the Residual Interest shall be
designated as the sole class of residual interest in the Upper Tier REMIC.


                                      -63-

<PAGE>

For federal income tax purposes, the pass-through rate on each REMIC Regular
Interest (other than the Uncertificated Class C Interest and the Class UT-IO
Interest) and on the sole class of residual interest in the Upper Tier REMIC
shall be subject to a cap equal to the Upper Tier REMIC Net WAC Cap.

          The beneficial ownership of the Class SWR Interest, the Class LTR
Interest and the Residual Interest shall be represented by the Class R
Certificate. The Class SWR Interest and Class LTR Interest shall not have a
principal balance or bear interest.

          (c) The "tax matters person" with respect to each REMIC for purposes
of the REMIC Provisions shall be the beneficial owner of the Class R
Certificate; provided, however, that the Holder of a Class R Certificate, by its
acceptance thereof, irrevocably appoints the Trustee as its agent and
attorney-in-fact to act as "tax matters person" with respect to each REMIC for
purposes of the REMIC Provisions. If there is more than one beneficial owner of
the Class R Certificate, the "tax matters person" shall be the Person with the
greatest percentage interest in the Class R Certificate and, if there is more
than one such Person, shall be determined under Treasury regulation Section
1.860F-4(d) and Treasury regulation Section 301.6231(a)(7)-1.

          (d) (i) It is intended that the rights of each Class of the Class A,
Class M and Class B Certificates to receive payments in respect of Excess
Interest shall be treated as a right in interest rate cap contracts written by
the Class C Certificateholders in favor of the holders of each Class of the
Class A, Class M and Class B Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper Tier
REMIC held by the holders of the Class A (other than the Class R Certificate),
Class M and Class B Certificates and the residual interest in the Upper Tier
REMIC held by the holder of the Class R Certificate. For information reporting
requirements, the rights of the Class A, Class M and Class B Certificates to
receive payments in respect of Excess Interest shall be assumed to have zero
value or a de minimis value. This provision is intended to satisfy the
requirements of Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights coupled with REMIC interests to be separately respected and
shall be interpreted consistently with such regulation. On each Distribution
Date, to the extent that any of the Class A, Class M and Class B Certificates
receive payments in respect of Excess Interest, such amounts, to the extent not
derived from payments on the Cap Contract or the Swap Agreement, will be treated
as distributed by the Upper Tier REMIC to the Class C Certificates pro rata in
payment of the amounts specified in Section 4.04(g) and then paid to the
relevant Class of Certificates pursuant to the related interest rate cap
agreement.

               (ii) It is intended that the beneficial owners of the
Certificates (other than the Class P, Class C and Class R Certificates) shall be
treated as having entered into a notional principal contract with respect to the
beneficial owners of the Class C Certificates. Pursuant to each such notional
principal contract, all beneficial owners of each Class of Certificates (other
than the Class P, Class C and Class R Certificates) shall be treated as having
agreed to pay, on each Distribution Date, to the beneficial owners of the Class
C Certificates an aggregate amount equal to the excess, if any, of (i) the
amount payable on such Distribution Date on the Corresponding REMIC Regular
Interest of such Class of Certificates over (ii) the amount payable on such
Class of Certificates on such Distribution Date (such excess, a "Class Payment
Shortfall"). A Class Payment Shortfall shall be allocated to each Class of
Certificates to the extent that interest accrued on such Class for the related
Accrual Period at the Pass-Through Rate for a Class, computed by substituting
"Upper Tier REMIC Net WAC Cap" for the Available Funds Cap set forth in the
definition thereof, exceeds the amount of interest accrued on such Certificate
at the Pass-Through Rate (without such substitution) for the related Accrual
Period, and a Class Payment Shortfall payable from principal collections shall
be allocated to the most subordinate Class of Certificates with an outstanding
principal balance to the extent of such balance.


                                      -64-

<PAGE>

          (e) The parties intend that the portion of the Trust Fund consisting
of the Uncertificated Class C Interest, the uncertificated Class UT-IO Interest,
the rights to receive payments deemed made by the Class A, Class M and Class B
Certificates in respect of notional principal contracts described in Section
2.07(d)(ii), the Cap Contract, the Cap Contract Account and the obligation of
the holders of the Class C Certificates to pay amounts in respect of Excess
Interest to the holders of the Class A, Class M and Class B Certificates and the
Supplemental Interest Trust, which holds the Swap Agreement shall be treated as
a "grantor trust" under the Code, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the Trustee
shall (i) furnish or cause to be furnished to the holders of the Class C
Certificates information regarding their allocable share, if any, of the income
with respect to such grantor trust, (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) and
such other forms as may be applicable and (iii) comply with such information
reporting obligations with respect to payments from such grantor trust to the
holders of Class A, Class M, Class B and Class C Certificates as may be
applicable under the Code.

          (f) The parties intend that the portion of the Trust Fund consisting
of the right to receive payments distributable to the Class P Certificates
pursuant to Section 4.04(b) hereof shall be treated as a "grantor trust" under
the Code, and the provisions hereof shall be interpreted consistently with this
intention. In furtherance of such intention, the Trustee shall (i) furnish or
cause to be furnished to the holders of the Class P Certificates information
regarding their allocable share of the income with respect to such grantor trust
and (ii) file or cause to be filed with the Internal Revenue Service Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.

          (g) The parties intend that amounts paid to the Swap Counterparty
under the Swap Agreement shall be deemed for federal income tax purposes to be
paid by the Class C Certificates first, out of funds deemed received in respect
of the Class UT-IO Interest, second, out of funds deemed received in respect of
the Uncertificated Class C Interest and third, out of funds deemed received in
respect of notional principal contracts described in Section 2.07(d)(ii), and
the provisions hereof shall be interpreted consistently with this intention. On
each Distribution Date, to the extent that amounts paid to the Swap Counterparty
are deemed paid out of funds received in respect of the Uncertificated Class C
Interest, such amounts will be treated as distributed by the Upper Tier REMIC to
the Class C Certificates pro rata in payment of the amounts specified in Section
4.04(g) and then paid to the Swap Counterparty pursuant to the Swap Agreement.

          The Supplemental Interest Trust shall be an "outside reserve fund" for
federal income tax purposes and not an asset of any REMIC. Furthermore, the
Holders of the Class C Certificates shall be the beneficial owners of the
Supplemental Interest Trust for all federal income tax purposes, and shall be
taxable on all income earned thereon.

          (h) All payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans (other than amounts distributable to the Class P
Certificates pursuant to Section 4.04(b) hereof) received from the Mortgage
Loans shall be paid to the SWAP REMIC Regular Interests until the principal
balance of all such interests have been reduced to zero and any losses allocated
to such interests have been reimbursed. Any available funds remaining in the
SWAP REMIC on a Distribution Date after distributions to the SWAP REMIC Regular
Interests shall be distributed to the Class R Certificates on account of the
Class SWR Interest. On each Distribution Date, the Trustee shall distribute the
aggregate Interest Funds (net of expenses and payments to the Class P
Certificates) with respect to each of the SWAP REMIC Regular Interests based on
the interest rates for each such SWAP REMIC Regular Interest. On each
Distribution Date, the Trustee shall distribute the aggregate Principal Funds
first to the Class SW-Z Interest until its principal balance is reduced to zero
and then sequentially to each of the other SWAP REMIC Regular Interests in
ascending order of their numerical class designation, in equal


                                      -65-

<PAGE>

amounts to each such class in such numerical designation, until the principal
balance of each such class is reduced to zero. All losses with respect to the
Mortgage Loans shall be allocated among the SWAP REMIC Regular Interests in the
same manner that principal distributions are allocated. Subsequent Recoveries
with respect to the Mortgage Loans shall be allocated in the reverse fashion
from the manner in which losses are allocated.

          All payments received by the Lower Tier REMIC with respect to the SWAP
REMIC Regular Interests shall be paid to the Lower Tier REMIC Regular Interests
until the principal balance of all such interests have been reduced to zero and
any losses allocated to such interests have been reimbursed. Any excess amounts
shall be distributed to the Class LTR Interest. On each Distribution Date, an
amount equal to 50% of the increase in the Overcollateralization Amount shall be
payable as a reduction of the principal amounts of the Lower Tier REMIC Marker
Classes (with such amount allocated among the Lower Tier REMIC Marker Classes so
that each Lower Tier REMIC Marker Class will have its principal reduced by an
amount equal to 50% of any increase in the Overcollateralization Amount that
results in a reduction in the principal balance of its Related Certificates) and
will be accrued and added to the principal balance of the Class LTX Interest.
All payments of scheduled principal and prepayments of principal on the Mortgage
Loans shall be allocated 50% to the Class LTX Interest and 50% to the Lower Tier
REMIC Marker Classes (with principal payments allocated to each of the Lower
Tier REMIC Marker Classes in an amount equal to 50% of the principal amounts
distributed to the Related Certificates in reduction of their principal
amounts). Notwithstanding the preceding sentence, an amount equal to the
principal payments that result in a reduction in the Overcollateralization
Amount shall be treated as payable entirely to the Class LTX Interest. Realized
Losses that are allocated to the Certificates shall be applied to the Lower Tier
REMIC Marker Classes and the Class LTX Interest so that after all distributions
have been made on each Distribution Date (i) the principal balance of each of
the Lower Tier REMIC Marker Classes is equal to 50% of the principal balance of
the Related Certificates and (ii) the principal balance of the Class LTX
Interest is equal to the sum of (x) 50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50% of the Overcollateralization Amount.
Each Lower Tier REMIC Marker Class shall be entitled to receive an amount equal
to 50% of all amounts distributed to the Related Certificates in respect of
unreimbursed amounts of Realized Losses. The Class LTX Interest shall be
entitled to receive all other amounts distributed to the Certificates in respect
of unreimbursed amounts of Realized Losses.

          If on any Distribution Date the Certificate Principal Balance of any
Class of Certificates is increased pursuant to the last sentence of the
definition of "Certificate Principal Balance", then there shall be an equivalent
increase in the principal amounts of the Lower Tier REMIC Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the Lower Tier REMIC Regular Interests on such
Distribution Date) among the Lower Tier REMIC Regular Interests so that (i) each
of the Lower Tier Marker Classes has a principal balance equal to 50% of the
principal balance of the Related Certificates, (ii) the Class LTX Interest has a
principal balance equal to the sum of (x) 50% of the aggregate Stated Principal
Balance of the Mortgage Loans and (y) 50% of the Overcollateralization Amount.

          (i) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution 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 and
the Trust Fund against any and all Losses resulting from such negligence;
provided, however, that the Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of a Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R Certificate
on which the Servicer has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Class R Certificate now
or


                                      -66-

<PAGE>

hereafter existing at law or in equity. Notwithstanding the foregoing, however,
in no event shall the Servicer have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than those arising out of a negligent performance by the Servicer of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).

          (j) In the event that any REMIC provided for herein fails to qualify
as a REMIC, loses its status as a REMIC, or incurs federal, state or local taxes
as a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Trustee of its duties
and obligations set forth herein, the Trustee shall indemnify the Trust Fund
against any and all Losses resulting from such negligence; provided, however,
that the Trustee shall not be liable for any such Losses attributable to the
action or inaction of the Servicer, the Depositor or the Holder of a Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R Certificate on which the
Trustee has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Class R Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Trustee have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than those arising out of a negligent performance by the Trustee of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).

          SECTION 2.08. [RESERVED]

          SECTION 2.09. Covenants of the Servicer.

          The Servicer hereby covenants to each of the other parties to this
Agreement as follows:

          (a) the Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer
under each Required Insurance Policy;

          (b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor or the
Trustee, any affiliate of the Depositor or the Trustee and prepared by the
Servicer pursuant to this Agreement will be inaccurate in any material respect,
provided, however, that the Servicer shall not be responsible for inaccurate
information provided to it by third parties.

          SECTION 2.10. [RESERVED]

          SECTION 2.11. Permitted Activities of the Trust.

          The Trust is created for the object and purpose of engaging in the
Permitted Activities. In furtherance of the foregoing, the Trustee is hereby
authorized and directed to execute and deliver on behalf of the Trust, and to
perform the duties and obligations of the Trustee under, the Cap Contract and
any other agreement or instrument related thereto, in each case in such form as
the Depositor shall direct or shall approve, the execution and delivery of any
such agreement by the Depositor to be conclusive evidence of its approval
thereof

          SECTION 2.12. Qualifying Special Purpose Entity.


                                      -67-

<PAGE>

          For purposes of SFAS 140, the parties hereto intend that the Trust
Fund shall be treated as a "qualifying special purpose entity" as such term is
used in SFAS 140 and any successor rule thereto and its power and authority as
stated in Section 2.11 of this Agreement shall be limited in accordance with
paragraph 35 or SFAS 140.

                                  ARTICLE III
                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

          SECTION 3.01. Servicer to Service Mortgage Loans.

          For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that, subject to Section 6.03, the
Servicer shall not take any action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan
serviced by it under this Agreement or the rights and interests of the other
parties to this Agreement except as otherwise required by this Agreement or by
law. Notwithstanding anything in this Agreement to the contrary, the Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan that would cause any of the REMICs provided for herein to fail
to qualify as a REMIC or result in the imposition of any tax under Section
860G(a) or 860G(d) of the Code. The Servicer shall represent and protect the
interest of the Trust Fund in the same manner as it currently protects its own
interest in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan, but in any case not in any manner that is
a lesser standard than that provided in the first sentence of this Section 3.01.
Without limiting the generality of the foregoing, the Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, subordinations and all other comparable instruments, with respect to
the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans, to the extent that the Servicer is
not permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to the Servicer. For purposes of this
Section 3.01, the Trustee hereby grants to the Servicer a limited power of
attorney to execute and file any and all documents necessary to fulfill the
obligations of the Servicer under this Section 3.01.

          The Servicer shall not be required to make any Servicing Advance with
respect to a Mortgage Loan that is 150 days or more delinquent.


                                      -68-

<PAGE>

          The Servicer shall deliver a list of Servicing Officers to the Trustee
by the Closing Date.

          The Servicer shall deliver to the MI Insurer all reports required by
the MI Insurer that are reasonably available to the Servicer.

          The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Fannie Mae Guide Announcement 97-02 and that for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.

          The Servicer further is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the name
of the Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. Any reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS System,
shall be subject to withdrawal by the Servicer from the Collection Account.

          With respect to any second lien Mortgage Loan, the Servicer may
consent to the refinancing of the prior senior lien relating to such Mortgage
Loan, provided that the following requirements are met:

          (a) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing;
and

          (b) the interest rate for the loan evidencing the refinanced senior
lien is no more than 2.0% higher than the interest rate on the loan evidencing
the existing senior lien immediately prior to the date of such refinancing; and

          (c) the loan evidencing the refinanced senior lien is not subject to
negative amortization.

          SECTION 3.02. Servicing and Subservicing; Enforcement of the
     Obligations of Servicer.

          (a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a subservicer, which may be an affiliate (each, a "subservicer") pursuant to
a subservicing agreement (each, a "Subservicing Agreement") including, at the
Servicer's option, if requested to do so by the Holder of the Class C
Certificate; provided, however, that (i) such subservicing arrangement and the
terms of the related subservicing agreement must provide for the servicing of
such Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder and (ii) that such agreement would not result in a
withdrawal or downgrading by any Rating Agency of the ratings of any
Certificates evidenced by a letter to that effect delivered by each Rating
Agency to the Depositor. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a subservicer or reference to actions
taken through a subservicer or otherwise, the Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with


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<PAGE>

the provisions of this Agreement without diminution of such obligation or
liability by virtue of such subservicing agreements or arrangements or by virtue
of indemnification from the subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. Every subservicing agreement entered into by
the Servicer shall contain a provision giving any successor servicer the option
to terminate such agreement in the event a successor servicer is appointed. All
actions of the each subservicer performed pursuant to the related subservicing
agreement shall be performed as an agent of the Servicer with the same force and
effect as if performed directly by the Servicer. The Servicer shall deliver to
the Trustee copies of all subservicing agreements. The Trustee shall have no
obligations, duties or liabilities with respect to a subservicer, including
without limitation, any obligation, duty or liability to monitor such
subservicer or to pay a subservicer's fees and expenses.

          (b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Servicer.

          SECTION 3.03. Rights of the Depositor and the Trustee in Respect of
     the Servicer.

          Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and neither of them
is obligated to supervise the performance of the Servicer hereunder or
otherwise.

          SECTION 3.04. Trustee to Act as Servicer.

          Subject to Sections 6.04 and 7.02, in the event that the Servicer
shall for any reason no longer be the Servicer hereunder (including by reason of
an Event of Default), the Trustee or its designee shall, within a period of time
not to exceed ninety (90) days from the date of notice of termination or
resignation, thereupon assume all of the rights and obligations of the Servicer
hereunder arising thereafter (except that the Trustee shall not be (i) liable
for losses of the Servicer pursuant to Section 3.10 hereof or any acts or
omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances or Servicing Advances if it is prohibited from doing so by applicable
law, (iii) obligated to effectuate repurchases or substitutions of Mortgage
Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof, (iv)
responsible for any expenses of the Servicer pursuant to Section 2.03 or (v)
deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee (subject to clause (ii) above) or its
designee, in its capacity as the successor servicer, shall immediately assume
the terminated or resigning Servicer's obligation to make Advances and Servicing
Advances). No such termination or resignation shall affect any obligation of the
Servicer to pay amounts owed under this Agreement and to perform its duties
under this Agreement until its successor assumes all of its rights and
obligations hereunder. If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the Trustee (or any
other successor servicer) may, at its option, succeed to any rights and
obligations of the Servicer under any subservicing agreement in accordance with
the terms thereof; provided, however, that the Trustee (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any costs or expenses, including
without limitation Servicing Transfer Costs incurred by the Trustee in
connection with this Section 3.04, are not paid by the Servicer pursuant to this
Agreement within 30 days of the date of the Trustee's invoice thereof, such
amounts shall be payable out of the Certificate Account; provided that if the
Servicer has been terminated by reason of


                                      -70-

<PAGE>

an Event of Default, the terminated Servicer shall reimburse the Trust Fund for
any such expense incurred by the Trust Fund upon receipt of a reasonably
detailed invoice evidencing such expenses. If the Trustee is unwilling or unable
to act as servicer, the Trustee shall seek to appoint a successor servicer that
is eligible in accordance with the criteria specified this Agreement.

          The Servicer shall, upon request of the Trustee, but at the expense of
the Servicer if the Servicer has been terminated by reason of an Event of
Default, deliver to the assuming party all documents and records relating to
each subservicing agreement and the Mortgage Loans then being serviced and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

          SECTION 3.05. Collection of Mortgage Loan Payments; Collection
     Account; Certificate Account.

          (a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any default
interest charge, or (ii) subject to Section 3.01, extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, subject to Section 4.01, the Servicer
shall make any Advances on the related Mortgage Loan during the scheduled period
in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that in determining which course of action
permitted by this sentence it shall pursue, the Servicer shall adhere to the
standards of Section 3.01. The Servicer's analysis supporting any forbearance
and the conclusion that any forbearance meets the standards of Section 3.01
shall be reflected in writing in the Mortgage File.

          (b) The Servicer will not waive any Prepayment Charge or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership or other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the Servicer has not
been provided with information sufficient to enable it to collect the Prepayment
Charge, or (iv) in the Servicer's reasonable judgment as described in Section
3.01 hereof, (x) such waiver relates to a default or a reasonably foreseeable
default and (y) such waiver would maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and related Mortgage Loan, or
(v) the collection of such Prepayment Charge or portion thereof, or of a similar
type of Prepayment Charge, would be considered "predatory" or "illegal" pursuant
to written guidance published by any applicable federal, state or local
regulatory authority having jurisdiction over such matters or has been
challenged by any such authority, or (vi) (provided that the Depositor has
notified the Servicer that


                                      -71-

<PAGE>

there are no NIM Notes outstanding) there is a certificated class action in
which a similar type of prepayment charge is being challenged. Except as
provided in the preceding sentence, in no event will the Servicer waive a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default. If the Servicer
waives or does not collect all or a portion of a Prepayment Charge relating to a
Principal Prepayment in full or in part due to any action or omission of the
Servicer, other than as provided above, the Servicer shall deposit the amount of
such Prepayment Charge (or such portion thereof as had been waived for deposit)
into the Collection Account for distribution in accordance with the terms of
this Agreement.

          (c) The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.

          (d) The Servicer shall establish and initially maintain, on behalf of
the Certificateholders, the Collection Account. The Servicer shall deposit into
the Collection Account daily, within two Business Days of receipt thereof, in
immediately available funds, the following payments and collections received or
made by it on and after the Cut-Off Date with respect to the Mortgage Loans:

               (i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans, other than principal due on the Mortgage
Loans on or prior to the Cut-off Date;

               (ii) all payments on account of interest on the Mortgage Loans
net of the related Servicing Fee permitted under Section 3.15, other than (x)
interest due on the Mortgage Loans on or prior to the Cut-off Date and (y)
Prepayment Interest Excess;

               (iii) all Liquidation Proceeds, other than proceeds to be applied
to the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicer's normal servicing procedures;

               (iv) all Subsequent Recoveries;

               (v) all Compensating Interest;

               (vi) any amount required to be deposited by the Servicer pursuant
to Section 3.05(g) in connection with any losses on Permitted Investments;

               (vii) any amounts required to be deposited by the Servicer
pursuant to Section 3.10 hereof;

               (viii) all Advances made by the Servicer pursuant to Section
4.01;

               (ix) all Prepayment Charges; and

               (x) any other amounts required to be deposited hereunder.

          The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property and


                                      -72-

<PAGE>

other similar ancillary fees (other than Prepayment Charges)) if collected, and
any Prepayment Interest Excess need not be remitted by the Servicer. Rather,
such fees and charges may be retained by the Servicer as additional servicing
compensation. In the event that the Servicer shall remit any amount not required
to be remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw or direct the Trustee, or such other
institution maintaining the Collection Account, to withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding. The
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Collection Account shall be
held in trust for the Certificateholders until withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals from
the Collection Account at the direction of the Servicer.

          The Servicer shall give notice to the Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. Not later than twenty days after each Distribution Date, the Servicer
shall forward to the Trustee and the Depositor the most current available bank
statement for the Collection Account. Copies of such statement shall be provided
by the Trustee to any Certificateholder and to any Person identified to the
Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Servicer to the Trustee.

          (e) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall, promptly upon
receipt, deposit or cause to be deposited in the Certificate Account and retain
therein the following:

               (i) the aggregate amount withdrawn by the Servicer from the
Collection Account and required to be deposited in the Certificate Account;

               (ii) the Purchase Price and any Substitution Adjustment Amount;

               (iii) any amount required to be deposited by the Trustee pursuant
to Section 3.05(g) in connection with any losses on Permitted Investments; and

               (iv) the Optional Termination Amount paid by the winning bidder
at the Auction or by the Servicer pursuant to Section 9.01.

          Any amounts received by the Trustee prior to 1:00 p.m. New York City
time (or such earlier deadline for investment in the Permitted Investments
designated by the Trustee) that are required to be deposited in the Certificate
Account by the Servicer shall be invested in Permitted Investments on the
Business Day on which they were received. The foregoing requirements for
remittance by the Servicer and deposit by the Trustee into the Certificate
Account shall be exclusive. If the Servicer fails to remit any funds due by the
time designated herein, the Servicer shall pay to the Trustee, for its own
account, interest accrued on such funds at the then current prime rate (as
published by Wells Fargo Bank, N.A.) from and including the applicable due date,
to but excluding the day such funds are paid to the Trustee. In the event that
the Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time cause the Trustee to withdraw such amount from the Certificate Account, any
provision herein to the contrary notwithstanding. All funds deposited in the
Certificate Account shall be held by the Trustee in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Certificate Account at the direction of the
Servicer. The Trustee shall give notice to the Servicer of the location of the
Certificate Account maintained by it when established and prior to any change
thereof.


                                      -73-

<PAGE>

          (f) Each institution that maintains the Collection Account or the
Certificate Account shall invest the funds in each such account as directed by
the Servicer or the Trustee, as applicable, in writing, in Permitted
Investments, which shall mature not later than (i) in the case of the Collection
Account the Business Day preceding the related Servicer Remittance Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such Collection Account or is otherwise immediately available, then
such Permitted Investment shall mature not later than the Servicer Remittance
Date) and (ii) in the case of the Certificate Account, the Business Day
immediately preceding the first Distribution Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than such
Distribution Date) and, in each case, shall not be sold or disposed of prior to
its maturity. All such Permitted Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders. All income and gain net of
any losses realized from amounts on deposit in the Collection Account shall be
for the benefit of the Servicer as servicing compensation and shall be remitted
to it monthly as provided herein. The amount of any losses incurred in the
Collection Account in respect of any such investments shall be deposited by the
Servicer in the Collection Account out of the Servicer's own funds immediately
as realized. All income and gain net of any losses realized from amounts on
deposit in the Certificate Account shall be for the benefit of the Trustee and
shall be remitted to or withdrawn by it monthly as provided herein. The amount
of any losses incurred in the Certificate Account in respect of any such
investments shall be deposited by the Trustee in the Certificate Account out of
the Trustee's own funds immediately as realized.

          SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
     Escrow Accounts.

          To the extent required by the related Mortgage Note, the Servicer
shall establish and maintain one or more accounts (each, an "Escrow Account")
and deposit and retain therein all collections from the Mortgagors (or advances
by the Servicer) for the payment of taxes, assessments, hazard insurance
premiums or comparable items for the account of the Mortgagors. Nothing herein
shall require the Servicer to compel a Mortgagor to establish an Escrow Account
in violation of applicable law.

          Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.

          SECTION 3.07. Access to Certain Documentation and Information
     Regarding the Mortgage Loans.

          Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access.


                                      -74-

<PAGE>

          The Servicer may from time to time provide the Depositor, and any
Person designated by the Depositor, with reports and information regarding the
Mortgage Loans, including without limitation information requested by the
Depositor or an originator of the Mortgage Loans for required institutional risk
control.

          In addition, with respect to each MI Mortgage Loan that is subject to
a modification, the Servicer shall provide the MI Insurer with written notice of
such modification, which shall include the nature of such modification.

          SECTION 3.08. Permitted Withdrawals from the Collection Account and
     Certificate Account.

          (a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes:

               (i) to pay to the Servicer (to the extent not previously paid to
or withheld by the Servicer), as servicing compensation in accordance with
Section 3.15, that portion of any payment of interest that equals the Servicing
Fee for the period with respect to which such interest payment was made, and, as
additional servicing compensation, those other amounts set forth in Section
3.15;

               (ii) to reimburse the Servicer for Advances made by it (or to
reimburse the Advance Financing Person for Advances made by it) with respect to
the Mortgage Loans, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds) that represent late recoveries of payments
of principal and/or interest on such particular Mortgage Loan(s) in respect of
which any such Advance was made;

               (iii) to reimburse the Servicer for any Non-Recoverable Advance
previously made and any Non-Recoverable Servicing Advances previously made to
the extent that, in the case of Non-Recoverable Servicing Advances,
reimbursement therefor constitutes "unanticipated expenses" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii);

               (iv) to pay to the Servicer earnings on or investment income with
respect to funds in or credited to the Collection Account;

               (v) to reimburse the Servicer from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;

               (vi) to pay any obligations under the MI Policy;

               (vii) to pay to the Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances (to the extent that
reimbursement for Servicing Advances would constitute an "unanticipated expense"
within the meaning of Treasury Regulation Section 1.860-1(b)(3)(ii)), the
Servicer's right to reimbursement of Servicing Advances pursuant to this
subclause (vi) with respect to any Mortgage Loan being limited to amounts
received on particular Mortgage Loan(s)(including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late recoveries of
the payments for which such advances were made pursuant to Section 3.01 or
Section 3.06;

               (viii) to pay to the Servicer any unpaid Servicing Fees for any
Mortgage Loan upon such Mortgage Loan being charged off and upon termination of
the obligations of the Servicer.


                                      -75-

<PAGE>

               (ix) to pay to the Depositor or the Servicer, as applicable, with
respect to each Mortgage Loan or property acquired in respect thereof that has
been purchased pursuant to Section 2.02, 2.03 or 3.12, all amounts received
thereon and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;

               (x) to reimburse the Servicer or the Depositor for expenses
incurred by either of them in connection with the Mortgage Loans or Certificates
and reimbursable pursuant to Section 3.04, Section 3.25 or Section 6.03 hereof
provided that reimbursement therefor would constitute "unanticipated" expenses
within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii);

               (xi) to reimburse the Trustee for enforcement expenses reasonably
incurred in respect of a breach or defect giving rise to the purchase obligation
in Section 2.03 that were incurred in the purchase price of the Mortgage Loans
including any expenses arising out of the enforcement of the purchase
obligation; provided that any such expenses will be reimbursable under this
subclause (xi) only to the that such expenses would constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)
if paid by one of the REMICs provided for herein;

               (xii) [RESERVED]

               (xiii) to withdraw pursuant to Section 3.05 any amount deposited
in the Collection Account and not required to be deposited therein; and

               (xiv) to clear and terminate the Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.

          In addition, no later than 2:00 p.m. Eastern Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds, to the extent on deposit,
and such amount shall be deposited in the Certificate Account; provided,
however, if the Trustee does not receive such Interest Funds and Principal Funds
by 2:00 p.m. Eastern Time, such Interest Funds and Principal Funds shall be
deposited in the Certificate Account on the next Business Day. In the event such
funds are not deposited by 2:00 p.m. Eastern Time on the Servicer Remittance
Date, the Servicer shall pay, out of its own funds, interest on such amount at a
rate equal to the then current "prime rate" (as published by Wells Fargo Bank,
N.A.) for each date or part thereof until such amount is paid in full.

          The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account.

          The Servicer shall provide written notification to the Trustee on or
prior to the next succeeding Servicer Remittance Date upon making any
withdrawals from the Collection Account pursuant to subclauses (iii) and (vii)
above.

          Unless otherwise specified, any amounts reimbursable to the Servicer
or the Trustee from amounts on deposit in the Collection Account or the
Certificate Accounts shall be deemed to come from first, Interest Funds, and
thereafter, Principal Funds for the related Distribution Date.

          (b) The Trustee shall withdraw funds from the Certificate Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and shall withhold from the amounts so withdrawn, the amount of any taxes that
it is authorized to retain pursuant to this Agreement). In addition, prior to
making such distributions to the Certificateholders the Trustee may from time to
time make withdrawals from the Certificate Account for the following purposes:


                                      -76-

<PAGE>

               (i) to withdraw pursuant to Section 3.05 any amount deposited in
the Certificate Account and not required to be deposited therein;

               (ii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof (after paying all
amounts necessary to the Trustee or the Servicer in connection with any such
termination);

               (iii) to reimburse the Trustee for any fees, expenses and
indemnification reimbursable pursuant to this Agreement, including without
limitation Sections 3.04, 6.03, 8.05 and 8.06 hereof;

               (iv) to pay to the Trustee earnings on or investment income with
respect to funds in or credited to the Certificate Account; and

               (v) to pay to the MI Insurer, the MI Insurer Fee.

          SECTION 3.09. [RESERVED]

          SECTION 3.10. Maintenance of Hazard Insurance.

          The Servicer shall cause to be maintained, for each Mortgage Loan
secured by a first lien, fire and hazard insurance with extended coverage in an
amount, to the extent permitted by applicable law, that is at least equal to the
lesser of (i) the replacement value of the improvements that are part of such
Mortgaged Property and (ii) the greater of (a) the outstanding principal balance
of the Mortgage Loan and (b) an amount such that the proceeds of such policy
shall be sufficient to prevent the related Mortgagor and/or mortgagee from
becoming a co-insurer. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard mortgagee
clause. The Servicer shall also cause flood insurance to be maintained on
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan, to the extent described below. Pursuant to Section 3.05 hereof,
any amounts collected by the Servicer under any such policies (other than the
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Servicer's normal servicing procedures) shall be deposited
in the Collection Account. Any cost incurred by the Servicer in maintaining any
such insurance shall not, for the purpose of calculating monthly distributions
to the Certificateholders or remittances to the Trustee for their benefit, be
added to the principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
Servicer as a Servicing Advance to the extent provided in Section 3.08(a)(vii)
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property with respect to a Mortgage Loan
secured by a first lien is located at the time of origination of the Mortgage
Loan in a federally designated special flood hazard area and such area is
participating in the national flood insurance program, the Servicer shall cause
flood insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
Flood Disaster Protection Act of 1973, as amended.

          In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.10, it being understood and agreed that such


                                      -77-

<PAGE>

policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee for the benefit of the Certificateholders, claims
under any such blanket policy

          SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
     Agreements.

          When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause which would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which the expense shall constitute a Servicing
Advance) delivered to the Trustee and the Depositor shall conclusively establish
the reasonableness of the Servicer's belief that any "due-on-sale" clause is not
enforceable under applicable law, but which shall not be required. In such
event, the Servicer shall make reasonable efforts to enter into an assumption
and modification agreement with the Person to whom such property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable law or the Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted under
applicable law, the Servicer is authorized to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Note. In addition to the foregoing, the Servicer shall
not be required to enforce any "due-on-sale" clause if in the reasonable
judgment of the Servicer, entering into an assumption and modification agreement
with a Person to whom such property shall be conveyed and releasing the original
Mortgagor from liability would be in the best interests of the
Certificateholders. The Mortgage Loan, as assumed, shall conform in all respects
to the requirements, representations and warranties of this Agreement. The
Servicer shall notify the Trustee that any such assumption or substitution
agreement has been completed by forwarding to the Trustee the original copy of
such assumption or substitution agreement (indicating the Mortgage File to which
it relates) which copy shall be added by the Trustee to the related Mortgage
File and which shall, for all purposes, be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. The Servicer shall be responsible for recording any such
assumption or substitution agreements. In connection with any such assumption or
substitution agreement, the Monthly Payment on the related Mortgage Loan shall
not be changed but shall remain as in effect immediately prior to the assumption
or substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any fee collected by the Servicer
for consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Servicer as
additional servicing compensation.

          Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.


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          SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination
     of Excess Proceeds; Special Loss Mitigation.

          (a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with the restoration of any property that shall have suffered damage
due to an uninsured cause unless it shall determine (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, as contemplated in Section 3.08 hereof. Any
Mortgage Loan that is charged off may be sold to the majority Certificateholder
of the Class C Certificates, at its option, at its fair market value after the
time period specified in (e) below. If the Servicer has knowledge that a
Mortgaged Property that the Servicer is contemplating acquiring in foreclosure
or by deed-in-lieu of foreclosure is located within a one-mile radius of any
site with environmental or hazardous waste risks known to the Servicer, the
Servicer will, prior to acquiring the Mortgaged Property, consider such risks
and only take action in accordance with Accepted Servicing Practices.

          With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee or its nominee. Pursuant to its
efforts to sell such REO Property, the Servicer shall either itself or through
an agent selected by the Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Servicer or an affiliate may receive usual and customary real estate referral
fees for real estate brokers in connection with the listing and disposition of
REO Property. The Servicer shall prepare a statement with respect to each REO
Property that has been rented showing the aggregate rental income received and
all expenses incurred in connection with the management and maintenance of such
REO Property at such times as is necessary to enable the Servicer to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Collection
Account no later than the close of business on each Determination Date. The
Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as specified
by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax
and information returns, as may be required.

          In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by the
Trust Fund or, at the expense of the Trust Fund, obtain, in accordance with
applicable procedures for obtaining an automatic extension of the grace period,
more than 60 days prior to the day on which such three-year period would
otherwise expire, an extension of the three-year grace period, in which case
such property must be disposed of prior to the end of such extension, unless the
Trustee shall have been supplied with an Opinion of Counsel (such Opinion of
Counsel not to be an expense of the


                                      -79-

<PAGE>

Trustee), to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period or extension will not result in
the imposition of taxes on "prohibited transactions" of the Trust Fund or any of
the REMICs provided for herein as defined in section 860F of the Code or cause
any of the REMICs provided for herein to fail to qualify as a REMIC at any time
that any Certificates are outstanding, in which case the Trust Fund may continue
to hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be held, rented (or allowed
to continue to be rented) or otherwise used for the production of income by or
on behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of section 860G(a)(8) of the Code or (ii) subject the Trust
Fund or any REMIC provided for herein to the imposition of any federal, state or
local income taxes on the income earned from such Mortgaged under section
860G(c) of the Code or otherwise, unless the Servicer or the Depositor has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.

          The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.

          The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.

          The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds will be applied as between the
parties in the following order of priority: first, to reimburse the Servicer for
any related Servicing Advances and unpaid Servicing Fees, pursuant to Section
3.08(a)(vi) or this Section 3.12; second, to reimburse the Servicer for any
unreimbursed Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12;
third, to accrued and unpaid interest (to the extent no Advance has been made
for such amount) on the Mortgage Loan, at the Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed;
fourth, as a recovery of principal of the Mortgage Loan; and fifth, to any
Prepayment Charges.

          The proceeds of any net income from an REO Property, will be applied
as between the parties in the following order of priority: first, to reimburse
the Servicer for any related unreimbursed Servicing Advances and Servicing Fees,
pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse the
Servicer for any unreimbursed Advances, pursuant to Section 3.08(a)(ii) or this
Section 3.12; third, as a recovery of principal; and fourth, to accrued and
unpaid interest (to the extent no Advance has been made for such amount) on the
related REO Property, at the applicable Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed.


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<PAGE>

          (b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.

          (c) The Servicer, in its sole discretion, shall have the right to
elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage Loan that is 91 days or more Delinquent at a
price equal to the Purchase Price. The Purchase Price for any Mortgage Loan
purchased hereunder shall be delivered to the Trustee for deposit to the
Certificate Account and the Trustee (or its custodian), upon receipt of such
confirmation of deposit and a Request for Release from the Servicer in the form
of Exhibit I hereto, shall release or cause to be released to the Servicer the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment prepared by the Servicer, in each case without recourse, as shall
be necessary to vest in the Servicer any Mortgage Loan released pursuant hereto
and the Servicer shall succeed to all the Trustee's right, title and interest in
and to such Mortgage Loan and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The Servicer
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Certificateholders with respect thereto.

          (d) With respect to such of the Mortgage Loans as come into and
continue in default, the Servicer will decide, in its reasonable business
judgment, whether to (i) foreclose upon the Mortgaged Properties securing those
Mortgage Loans pursuant to Section 3.12(a), (ii) write off the unpaid principal
balance of the Mortgage Loans as bad debt (provided that the Servicer has
determined that no net recovery is possible through foreclosure proceedings or
other liquidation of the related Mortgaged Property), (iii) take a deed in lieu
of foreclosure, (iv) accept a short sale or short refinance; (v) arrange for a
repayment plan, or (vi) agree to a modification of such Mortgage Loan. As to any
Mortgage Loan that becomes 120 days delinquent, the Servicer will be required to
have obtained or to obtain a broker's price opinion, the cost of which will be
reimbursable as a Servicing Advance. After obtaining the broker's price opinion,
the Servicer will determine, in its reasonable business judgment, whether a net
recovery is possible through foreclosure proceedings or other liquidation of the
related Mortgage Property. If the Servicer determines that no such recovery is
possible, it must charge off the related Mortgage Loan at the time it becomes
180 days delinquent. Once a Mortgage Loan has been charged off, the Servicer
will discontinue making Advances, the Servicer will not be entitled to future
Servicing Fees with respect to such Mortgage Loan, and the Mortgage Loan will be
treated as a Liquidated Mortgage Loan. If the Servicer determines that such net
recovery is possible through foreclosure proceedings or other liquidation of the
related Mortgaged Property on a Mortgage Loan that becomes 180 days delinquent,
the Servicer need not charge off the Mortgage Loan and may continue making
Advances, the Servicer will continue to be entitled to Servicing Fees and the
Servicer will be required to notify the Trustee of such decision.

          SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.

          Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of a copy of such request, the Trustee or its designee
shall promptly release the related Mortgage File to the Servicer, and the
Servicer is authorized to cause the removal from the registration on the MERS
System of any such Mortgage if applicable, and the Servicer, on behalf of the
Trustee shall execute and deliver the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage together with the Mortgage Note with written evidence
of cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Mortgagor to the
extent permitted by law, and otherwise to the Trust Fund to the extent such
expenses constitute "unanticipated expenses" within the meaning of Treasury
Regulations Section 1.860G-(1)(b)(3)(ii). From time to time and as shall


                                      -81-

<PAGE>

be appropriate for the servicing or foreclosure of any Mortgage Loan, including
for such purpose, collection under any policy of flood insurance, any fidelity
bond or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or its designee shall, upon
delivery to the Trustee or its designee of a Request for Release in the form of
Exhibit I signed by a Servicing Officer, release the Mortgage File to the
Servicer. Subject to the further limitations set forth below, the Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
or its designee when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account.

          Each Request for Release may be delivered to the Trustee or its
designee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Servicer and the Trustee or its designee shall mutually agree. The Trustee
or its designee shall promptly release the related Mortgage File(s) within four
(4) Business Days of receipt of a properly completed Request for Release
pursuant to clauses (i), (ii) or (iii) above. Receipt of a properly completed
Request for Release shall be authorization to the Trustee or its designee to
release such Mortgage Files, provided the Trustee or its designee has determined
that such Request for Release has been executed, with respect to clauses (i) or
(ii) above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, shall be liable for such penalties or damages respectively caused by
it.

          On each day that the Servicer remits to the Trustee or its designee
Requests for Releases pursuant to clauses (ii) or (iii) above, the Servicer
shall also submit to the Trustee or its designee a summary of the total number
of such Requests for Releases requested on such day by the same method as
described in such clauses (ii) and (iii).

          If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property as authorized by this Agreement, the
Servicer may deliver or cause to be delivered to the Trustee or its designee,
for signature, as appropriate or on behalf of the Trustee, execute any court
pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Notwithstanding the foregoing, the Servicer shall cause possession of any
Mortgage File or of the documents therein that shall have been released by the
Trustee or its designee to be returned to the Trustee promptly after possession
thereof shall have been released by the Trustee or its designee unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account, and the Servicer
shall have delivered to the Trustee or its designee a Request for Release in the
form of Exhibit I or (ii) the Mortgage File or document shall have been
delivered to an attorney or to a public trustee or other public official as
required by law for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property and the Servicer shall
have delivered to the Trustee or its designee an Officer's Certificate of a
Servicing Officer certifying as to the name and address of the Person to which
the Mortgage File or the documents therein were delivered and the purpose or
purposes of such delivery.


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<PAGE>

          SECTION 3.14. Documents, Records and Funds in Possession of Servicer
     to be Held for the Trustee.

          All Mortgage Files and funds collected or held by, or under the
control of, the Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Collection Account,
shall be held by the Servicer for and on behalf of the Trustee and shall be and
remain the sole and exclusive property of the Trust Fund, subject to the
applicable provisions of this Agreement. The Servicer also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are deposited
in the Collection Account, the Certificate Account or in any Escrow Account, or
any funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of set off against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that the Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to the Servicer under this
Agreement.

          SECTION 3.15. Servicing Compensation.

          As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Mortgage Loan as of the immediately preceding Distribution Date.

          Additional servicing compensation in the form of any Excess Proceeds,
late payment fees, assumption fees (i.e. fees related to the assumption of a
Mortgage Loan upon the purchase of the related Mortgaged Property) and similar
fees payable by the Mortgagor, Prepayment Interest Excess, and all income and
gain net of any losses realized from Permitted Investments in the Collection
Account shall be retained by the Servicer to the extent not required to be
deposited in the Collection Account pursuant to Sections 3.05, or 3.12(a)
hereof. 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 in this Agreement. In no
event shall the Trustee be liable for any Servicing Fee or for any differential
between the Servicing Fee and the amount necessary to induce a successor
servicer to act as successor servicer under this Agreement.

          SECTION 3.16. Access to Certain Documentation.

          The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it provided, that
the Servicer shall be entitled to be reimbursed by each such Certificateholder
for actual expenses incurred by the Servicer in providing such reports and
access. Nothing in this Section shall limit the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.


                                      -83-

<PAGE>

          SECTION 3.17. Annual Statement as to Compliance.

          Pursuant to this Agreement, the Servicer shall deliver to the
Depositor and the Trustee on or before March 15 of each year beginning in 2006,
(or such other date as to which the Depositor gives the Servicer at least 30
days prior notice) in order to remain in compliance with the Section 302
Requirements, an Officer's Certificate stating, as to each signatory thereof,
that (i) a review of the activities of the Servicer during the preceding
calendar year and of performance under this Agreement or a similar agreement has
been made under such officer's supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officers and the nature and status thereof. The Trustee shall
forward a copy of each such statement received by it to each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder upon written request at the Certificateholder's expense,
provided such statement has been delivered by the Servicer to the Trustee.

          SECTION 3.18. Annual Independent Public Accountants' Servicing
     Statement; Financial Statements.

          On or before March 15 of each year, beginning in 2006 or such other
date in order to remain in compliance with the Section 302 Requirements, the
Servicer at its expense shall cause a nationally recognized firm of independent
public accountants (who may also render other services to the Servicer or any
Affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a USAP Report to the Trustee and the Depositor.
Copies of the USAP Report shall be provided by the Trustee to any
Certificateholder upon request at the Certificateholder's expense, provided such
report has been delivered by the Servicer to the Trustee.

          SECTION 3.19. [RESERVED]

          SECTION 3.20. Periodic Filings.

          (a) As part of the Form 10-K required to be filed pursuant to the
terms of this Agreement, the Trustee shall include such accountants report as
well as the Officer's Certificate delivered by the Servicer pursuant to Section
3.17 relating to the Servicer's performance of its obligations under this
Agreement and any significant deficiencies relating to the Servicer's compliance
set forth in the report of the Servicer's certified independent accountants
described above.

          (b) The Depositor shall prepare and file the initial report on Form
8-K. The Trustee shall prepare for filing, and execute (other than the Form
10-Ks and the Certification), on behalf of the Trust Fund, and file with the
Securities and Exchange Commission, (i) within 15 days after each Distribution
Date in each month, each Monthly Statement on Form 8-K under the Exchange Act
executed by the Trustee, (ii) on or before March 31 of each year beginning in
2006 or such other date in order to remain in compliance with the Section 302
Requirements, a Form 10-K under the Exchange Act executed by the Depositor,
including any certification (the "Certification") required by the Section 302
Requirements, and (iii) any and all reports, statements and information
respecting the Trust Fund and/or the Certificates required to be filed on behalf
of the Trust Fund under the Exchange Act executed by the Trustee. The
Certification shall be executed by a senior officer of the Depositor. Upon such
filing with the Securities and Exchange Commission, the Trustee shall promptly
deliver to the Depositor a copy of any such executed report, statement or
information. Prior to making any such filings and certifications, the Trustee
shall comply with the provisions set forth in this Section. If permitted by
applicable law and unless the Depositor otherwise directs, the Trustee shall
file a Form 15 under the Exchange Act as soon as it is able to do so. The
Depositor hereby grants to the Trustee a limited power of attorney to execute


                                      -84-

<PAGE>

(other than the Form 10-Ks and the Certification) and file each such document on
behalf of the Depositor. Such power of attorney shall continue until either the
earlier of (i) receipt by the Trustee from the Depositor of written termination
of such power of attorney and (ii) the termination of the Trust Fund. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports, and financial statements within its
control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with the
Commission. The Trustee shall have no responsibility to file any items other
than those specified in this Section.

          (c) The obligations set forth in paragraphs (a) and (b) of this
Section shall only apply with respect to periods for which the Trustee is
obligated to file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this Section.
In the event a Form 15 is properly filed pursuant to paragraph (b) of this
Section, there shall be no further obligations under paragraphs (a) and (b) of
this Section commencing with the fiscal year in which the Form 15 is filed
(other than the obligations in paragraphs (a) and (b) of this Section to be
performed in such fiscal year that related back to the prior fiscal year).

          SECTION 3.21. Annual Certificate by Trustee.

          (a) On or before March 15 of each year (commencing in 2006), an
officer of the Trustee shall execute and deliver an Officer's Certificate,
signed by a Responsible Officer of the Trustee or any officer to whom that
officer reports, to the Depositor for the benefit of the Depositor and its
officers, directors and affiliates, certifying as to the matters described in
the Officer's Certificate attached hereto as Exhibit K.

          (b) The Trustee shall indemnify and hold harmless the Depositor 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 Trustee or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.21, any material misstatement or omission in
the Officer's Certificate required under this Section or the negligence, bad
faith or willful misconduct of the Trustee in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Trustee agrees that it shall contribute to the
amount paid or payable by the Depositor as a result of the losses, claims,
damages or liabilities of the Depositor in such proportion as is appropriate to
reflect the relative fault of the Trustee on the one hand and of the Depositor
on the other in connection with a breach of the Trustee's obligations under this
Section 3.21, any material misstatement or omission in the Officer's Certificate
required under this Section or the Trustee's negligence, bad faith or willful
misconduct in connection therewith.

          SECTION 3.22. Annual Certificate by Servicer.

          (a) Within 15 days prior to the date on which a Form 10-K is required
to be filed with a Certification by the Depositor, the Servicer shall execute
and deliver an Officer's Certificate in the form of Exhibit L attached hereto,
signed by the senior officer in charge of servicing of the Servicer or any
officer to whom that officer reports, to the Trustee and Depositor for the
benefit of the Trustee and Depositor and their respective officers, directors
and affiliates.

          (b) The Servicer shall indemnify and hold harmless the Trustee and the
Depositor and their respective 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 Section 3.17, Section 3.18 and this Section
3.22, any material


                                      -85-

<PAGE>

misstatement or omission in the Officer's Certificate required under this
Section 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 Depositor, then the Servicer agrees that it
shall contribute to the amount paid or payable by the Trustee and the Depositor
as a result of the losses, claims, damages or liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Servicer on the other in connection with a breach of the
Servicer's obligations under this Section 3.22, any material misstatement or
omission in the Officer's Certificate required under this Section or the
Servicer's negligence, bad faith or willful misconduct in connection therewith.

          SECTION 3.23. Prepayment Charge Reporting Requirements.

          Promptly after each Distribution Date, the Servicer shall provide to
the Depositor and the Trustee the following information with regard to each
Mortgage Loan that has prepaid during the related Prepayment Period:

          (i) loan number;

          (ii) current Mortgage Rate;

          (iii) current principal balance;

          (iv) original principal balance;

          (v) Prepayment Charge amount due; and

          (vi) Prepayment Charge amount collected.

          SECTION 3.24. Information to the Trustee.

     Two Business Days after the 15th day of each month, but not later than the
18th day of each month, the Servicer shall furnish to the Trustee a monthly
remittance advice in the form set forth in Exhibit M-2 (or such other form or
forms as the Trustee and the Servicer may from time to time agree) for the
period ending on the last Business Day of the preceding month; provided,
however, that in the event the 18th day is not a Business Day, the
aforementioned reports shall be furnished by the Servicer to the Trustee on the
next Business Day; and provided, further, that in the event there are three
non-Business Days preceding the 18th day, the Servicer will (a) furnish to the
Trustee, on or before the 18th day of the month, the aforementioned reports,
which will not include information arising from the related Prepayment Period,
and (b) furnish to the Trustee, by 3:00 P.M., Eastern Time, on the next
succeeding Business Day after the 18th day, a cumulative version of the
aforementioned reports which includes such information arising from the related
Prepayment Period.

          SECTION 3.25. Indemnification.

          The Servicer shall indemnify the Sellers, the Trust Fund, the Trustee,
the Depositor and their officers, directors, employees and agents and hold each
of them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain in
any way related to the negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties or by reason of reckless disregard of
its obligations and duties hereunder. The Servicer promptly shall notify the
Sellers, the Trustee and the Depositor or any other relevant party if a claim is
made by a third party


                                      -86-

<PAGE>

with respect to such party and this Agreement or the Mortgage Loans and, if
subject to this indemnification obligation, assume (with the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld or delayed) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any of such
parties in respect of such claim. The Servicer shall provide the Depositor and
the Trustee with a written report of all expenses and advances incurred by the
Servicer pursuant to this Section 3.25, and the Servicer shall promptly
reimburse itself from the assets of the Trust Fund in the Collection Account for
all amounts advanced by it pursuant to the preceding sentence except when and to
the extent a determination has been made that the claim in any way relates to
the gross negligence, bad faith or willful misconduct of the Servicer. The
provisions of this paragraph shall survive the termination of this Agreement and
the payment of the outstanding Certificates.

          SECTION 3.26. Nonsolicitation.

          For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer which are directed to the general public at large, or certain segments
thereof, shall not constitute solicitation as that term is used in this Section
3.26.

          SECTION 3.27. High Cost Mortgage Loans.

          In the event that the Servicer reasonably determines that a Mortgage
Loan may be a "high cost mortgage loan", "high cost home", "covered", "high
cost", "high risk home", "predatory" or similarly classified loan under any
applicable state, federal or local law, the Servicer may notify the Depositor
and Trustee thereof; the Servicer may terminate its servicing thereof; and such
determination shall be deemed to materially and adversely affect the interests
of the Certificateholders in such Mortgage Loan and the related Transferor, or
the applicable Seller will repurchase the Mortgage Loan within a 30 day period
from the date of the notice in the manner described in Section 2.05.

          SECTION 3.28. MI Policies, Claims Under the MI Policies.

          (a) Notwithstanding anything to the contrary elsewhere in this
Agreement, the Servicer shall not agree to any modification or assumption of a
MI Mortgage Loan or take any other action with respect to an MI Mortgage Loan
that could result in denial of coverage under the MI Policy. The Servicer shall
notify the MI Insurer that the Trustee, on behalf of the Certificateholders, is
the "Insured," as that term is defined in the related MI Policy, of each MI
Mortgage Loan insured by the MI Insurer; provided, that such designation is made
solely for the purpose of entitling the Trust Fund to receive payments for
claims under the MI Policy and the Trustee shall not, except as provided herein,
be deemed to assume the obligations of the "Insured" thereunder. The Servicer
shall, on behalf of the Trustee, prepare and file on a timely basis with the MI
Insurer, with a copy to the Trustee, all claims that may be made under the MI
Policy with respect to the MI Mortgage Loans. Consistent with all rights and
obligations hereunder, the Servicer shall take all actions required under the MI
Policy as a condition to the payment of any such claim. Any amount received from
the MI Insurer with respect to any MI Mortgage Loan shall be deposited by the
Servicer, no later than two Business Days following receipt thereof, into the
Collection Account.


                                      -87-

<PAGE>

                                   ARTICLE IV
                                  DISTRIBUTIONS

          SECTION 4.01. Advances.

          (a) Subject to the conditions of this Article IV, the Servicer, as
required below, shall make an Advance and deposit such Advance in the Collection
Account. Each such Advance shall be remitted to the Collection Account no later
than 4:00 p.m. Eastern Time on the Servicer Advance Date in immediately
available funds. The Servicer shall be obligated to make any such Advance only
to the extent that such advance would not be a Non-Recoverable Advance. If the
Servicer shall have determined that it has made a Non-Recoverable Advance or
that a proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders, funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, each Rating Agency and
the Trustee an Officer's Certificate setting forth the basis for such
determination. The Servicer may, in its sole discretion, make an Advance with
respect to the principal portion of the final Scheduled Payment on a Balloon
Loan, but the Servicer is under no obligation to do so; provided, however, that
nothing in this sentence shall affect the Servicer's obligation under this
Section 4.01 to Advance the interest portion of the final Scheduled Payment with
respect to a Balloon Loan as if such Balloon Loan were a fully amortizing
Mortgage Loan. If a Mortgagor does not pay its final Scheduled Payment on a
Balloon Loan when due, the Servicer shall Advance (unless it determines in its
good faith judgment that such amounts would constitute a Non-Recoverable
Advance) a full month of interest (net of the Servicing Fee) on the Stated
Principal Balance thereof each month until its Stated Principal Balance is
reduced to zero.

          In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Collection Account that any amount held for future distribution
has been used by the Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Collection Account to the
Certificate Account. In addition, the Servicer shall have the right to reimburse
itself for any such Advance from amounts held from time to time in the
Collection Account to the extent such amounts are not then required to be
distributed. Any funds so applied and transferred pursuant to the previous two
sentences shall be replaced by the Servicer by deposit in the Collection Account
no later than the close of business on the Servicer Advance Date on which such
funds are required to be distributed pursuant to this Agreement. The Servicer
shall be entitled to be reimbursed from the Collection Account for all Advances
of its own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until the earlier of (i) such Mortgage Loan is paid in full, (ii) the related
Mortgaged Property or related REO Property has been liquidated or until the
purchase or repurchase thereof (or substitution therefor) from the Trust Fund
pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 4.01, (iii) the Servicer determines in its good faith
judgment that such amounts would constitute a Non-Recoverable Advance as
provided in the preceding paragraph or (iv) the date on which such Mortgage Loan
becomes 150 days delinquent as set forth below.

          (b) Notwithstanding anything in this Agreement to the contrary
(including, but not limited to, Sections 3.01 and 4.01(a) hereof), no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance or Servicing Advance would, if made, constitute a Non-Recoverable
Advance or a Non-Recoverable Servicing Advance. The determination by the
Servicer that it has made a Non-Recoverable Advance or a Non-Recoverable
Servicing Advance or that any proposed Advance or Servicing Advance, if made,
would constitute a Non-Recoverable Advance or a Non-Recoverable Servicing
Advance, respectively, shall be evidenced by an Officer's Certificate of the


                                      -88-

<PAGE>

Servicer delivered to the Depositor and the Trustee. In addition, the Servicer
shall not be required to advance any Relief Act Shortfalls.

          (c) Notwithstanding the foregoing, the Servicer shall not be required
to make any Advances for any Mortgage Loan after such Mortgage Loan becomes 150
days delinquent. The Servicer shall identify such delinquent Mortgage Loans in
the Servicer Statement referenced in Section 3.24. In addition, the Servicer
shall provide the Trustee with an Officer's Certificate listing such delinquent
Mortgage Loans and certifying that such loans are 150 days or more delinquent.

          SECTION 4.02. Reduction of Servicing Compensation in Connection with
     Prepayment Interest Shortfalls.

          In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Servicer shall, from amounts in respect of the Servicing
Fee for such Distribution Date, deposit into the Collection Account, as a
reduction of the Servicing Fee for such Distribution Date, no later than the
Servicer Advance Date immediately preceding such Distribution Date, an amount up
to the Prepayment Interest Shortfall; provided that the amount so deposited with
respect to any Distribution Date shall be limited to the product of (x) one
twelfth of 0.25% per annum and (y) the aggregate Stated Principal Balance of the
Mortgage Loans. In case of such deposit, the Servicer shall not be entitled to
any recovery or reimbursement from the Depositor, the Trustee, the Trust Fund or
the Certificateholders. With respect to any Distribution Date, to the extent
that the Prepayment Interest Shortfall exceeds Compensating Interest (such
excess, a "Non-Supported Interest Shortfall"), such Non-Supported Interest
Shortfall shall reduce the Current Interest with respect to each Class of
Certificates, pro rata based upon the amount of interest each such Class would
otherwise be entitled to receive on such Distribution Date. Notwithstanding the
foregoing, there shall be no reduction of the Servicing Fee in connection with
Prepayment Interest Shortfalls related to the Relief Act and the Servicer shall
not be obligated to pay Compensating Interest with respect to Prepayment
Interest Shortfalls related to the Relief Act.

          SECTION 4.03. Distributions on the REMIC Interests.

          On each Distribution Date, amounts on deposit in the Certificate
Account shall be treated for federal income tax purposes as applied to
distributions on the interests in the SWAP REMIC and the Lower Tier REMIC in an
amount sufficient to make the distributions on the respective Certificates on
such Distribution Date in accordance with the provisions of Section 4.04.

          SECTION 4.04. Distributions.

          (a) On each Distribution Date, prior to any distributions to the
Certificateholders, the Trustee shall pay to the MI Insurer, the MI Insurer Fee
for such Distribution Date from Interest Funds then on deposit in the
Certificate Account.

          (b) On each Distribution Date, the Trustee shall make the following
distributions from the Certificate Account of an amount equal to the Interest
Funds remaining after the distributions made pursuant to Section 4.04(a) above
in the following order of priority:

               (i) to the Supplemental Interest Trust, any Net Swap Payments
owed to the Swap Counterparty;

               (ii) to the Supplemental Interest Trust, any Swap Termination
Payment owed by the Trust Fund to the Swap Counterparty (other than any
Defaulted Swap Termination Payment);


                                      -89-

<PAGE>

               (iii) to the Class P Certificates, an amount equal to any
Prepayment Charges collected on the Mortgage Loans during the related Prepayment
Period and all amounts paid by the Servicer, the Sellers or the Transferors in
respect of Prepayment Charges pursuant to this Agreement, the Sale Agreements or
the Transfer Agreements, as applicable, and all amounts received in respect of
any indemnification paid as a result of a Prepayment Charge being unenforceable
in breach of the representations and warranties set forth in a Sale Agreement or
the related Transfer for the related Prepayment Period;

               (iv) to each class of the Class A Certificates, the Current
Interest and any Interest Carry Forward Amount with respect to such Class;
provided, however, if such amount is not sufficient to make a full distribution
of the Current Interest and any Interest Carry Forward Amount with respect to
the Class A Certificates, such amount will be distributed pro rata among each
Class of the Class A Certificates based on the ratio of (x) the Current Interest
and Interest Carry Forward Amount for each class of the Class A Certificates to
(y) the total amount of Current Interest and any Interest Carry Forward Amount
for the Class A Certificates;

               (v) to the Class M-1 Certificates, the Class M-1 Current Interest
and any Class M-1 Interest Carry Forward Amount;

               (vi) to the Class M-2 Certificates, the Class M-2 Current
Interest and any Class M-2 Interest Carry Forward Amount;

               (vii) to the Class M-3 Certificates, the Class M-3 Current
Interest and any Class M-3 Interest Carry Forward Amount;

               (viii) to the Class M-4 Certificates, the Class M-4 Current
Interest and any Class M-4 Interest Carry Forward Amount;

               (ix) to the Class M-5 Certificates, the Class M-5 Current
Interest and any Class M-5 Interest Carry Forward Amount;

               (x) to the Class M-6 Certificates, the Class M-6 Current Interest
and any Class M-6 Interest Carry Forward Amount;

               (xi) to the Class B-1 Certificates, the Class B-1 Current
Interest and any Class B-1 Interest Carry Forward Amount;

               (xii) to the Class B-2 Certificates, the Class B-2 Current
Interest and any Class B-2 Interest Carry Forward Amount;

               (xiii) to the Class B-3 Certificates, the Class B-3 Current
Interest and any Class B-3 Interest Carry Forward Amount; and

               (xiv) any remainder pursuant to Section 4.04(f) hereof.

          On each Distribution Date, subject to the proviso in (iv) above,
Interest Funds received on the Group One Mortgage Loans will be deemed to be
distributed to the Class R, Class A-1A and Class A-1B Certificates and Interest
Funds received on the Group Two Mortgage Loans will be deemed to be distributed
to the Class A-2A, Class A-2B and Class A-2C Certificates, in each case, until
the related Current Interest and Interest Carry Forward Amount of each such
class of Certificates for such Distribution Date has been paid in full.
Thereafter, Interest Funds not required for such distributions are


                                      -90-

<PAGE>

available to be applied if necessary, to the class or classes of Certificates
that are not related to such group of Mortgage Loans.

          (c) [RESERVED]

          (d) On each Distribution Date, the Trustee shall, to the extent of
funds then available, make the following distributions from the Certificate
Account of an amount equal to the Principal Distribution Amount in the following
order of priority, and each such distribution shall be made only after all
distributions pursuant to Section 4.04(b) above shall have been made until such
amount shall have been fully distributed for such Distribution Date:

               (i) to the Class A Certificates, the Class A Principal
Distribution Amount will be distributed as follows:

               (A) the Group One Principal Distribution Amount will be
          distributed as follows: (1) if no Class A-1 Trigger Event has
          occurred, and the aggregate Certificate Principal Balance of the Class
          M, Class B and Class C Certificates has not been reduced to zero, the
          Group One Principal Distribution Amount will be distributed as
          follows: first, to the Class R Certificate until its Certificate
          Principal Balance has been reduced to zero, and second, pro rata to
          the Class A-1A and Class A-1B Certificates, based on their relative
          Certificate Principal Balances, until the Certificate Principal
          Balance of each such class has been reduced to zero and (2) if a Class
          A-1 Trigger Event has occurred, or the aggregate Certificate Principal
          Balance of the Class M, Class B and Class C Certificates has been
          reduced to zero, the Group One Principal Distribution Amount will be
          distributed sequentially to the Class R, Class A-1A and Class A-1B
          Certificates, until the Certificate Principal Balance of each such
          class has been reduced to zero; and

               (B) the Group Two Principal Distribution Amount will be
          distributed sequentially to the Class A-2A, Class A-2B and Class A-2C
          Certificates until the Certificate Principal Balance of each such
          class has been reduced to zero; provided, however, that on and after
          the Distribution Date on which the aggregate Certificate Principal
          Balance of the Class M, Class B and Class C Certificates has been
          reduced to zero, any principal distributions allocated to the Class
          A-2A, Class A-2B, and Class A-2C Certificates are required to be
          allocated pro rata among such classes of Certificates, based on their
          respective Certificate Principal Balances, until their Certificate
          Principal Balances have been reduced to zero;

               (ii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;

               (iii) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;

               (iv) to the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount;

               (v) to the Class M-4 Certificates, the Class M-4 Principal
Distribution Amount;

               (vi) to the Class M-5 Certificates, the Class M-5 Principal
Distribution Amount;


                                      -91-

<PAGE>

               (vii) to the Class M-6 Certificates, the Class M-6 Principal
Distribution Amount;

               (viii) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount;

               (ix) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount;

               (x) to the Class B-3 Certificates, the Class B-3 Principal
Distribution Amount; and

               (xi) any remainder pursuant to Section 4.04(f) hereof.

          (e) [RESERVED]

          (f) On each Distribution Date, the Trustee shall, to the extent of
funds then available, make the following distributions up to the following
amounts from the Certificate Account of the remainders pursuant to Section
4.04(b)(xiv) and (d)(xi) hereof and each such distribution shall be made only
after all distributions pursuant to Sections 4.04(b) and (d) above shall have
been made until such remainders shall have been fully distributed for such
Distribution Date:

               (i) for distribution as part of the Principal Distribution
Amount, the Extra Principal Distribution Amount;

               (ii) to the Class M-1 Certificates, the Class M-1 Unpaid Realized
Loss Amount;

               (iii) to the Class M-2 Certificates, the Class M-2 Unpaid
Realized Loss Amount;

               (iv) to the Class M-3 Certificates, the Class M-3 Unpaid Realized
Loss Amount;

               (v) to the Class M-4 Certificates, the Class M-4 Unpaid Realized
Loss Amount

               (vi) to the Class M-5 Certificates, the Class M-5 Unpaid Realized
Loss Amount;

               (vii) to the Class M-6 Certificates, the Class M-6 Unpaid
Realized Loss Amount;

               (viii) to the Class B-1 Certificates, the Class B-1 Unpaid
Realized Loss Amount;

               (ix) to the Class B-2 Certificates, the Class B-2 Unpaid Realized
Loss Amount;

               (x) to the Class B-3 Certificates, the Class B-3 Unpaid Realized
Loss Amount;


                                      -92-

<PAGE>

               (xi) to the Class A, Class M and Class B Certificates, on a pro
rata basis, based upon outstanding Floating Rate Certificate Carryover for each
such Class, the Floating Rate Certificate Carryover for each Class; and

               (xii) the remainder pursuant to Section 4.04(g) hereof.

          (g) on each Distribution Date, the Trustee shall allocate the
remainders pursuant to Section 4.04(f)(xii) as follows:

               (i) to the Supplemental Interest Trust any Defaulted Swap
Termination Payment;

               (ii) to the Class C Certificates in the following order of
priority, (A) the Class C Current Interest, (B) the Class C Interest Carry
Forward Amount, (C) as principal on the Class C Certificate until the
Certificate Principal Balance of the Class C Certificates has been reduced to
zero and (D) the Class C Unpaid Realized Loss Amount; and

               (iii) the remainder pursuant to Section 4.04(h) hereof.

          (h) On each Distribution Date, the Trustee shall allocate the
remainder pursuant to Section 4.04(g)(iii) hereof (i) to the Trustee to
reimburse amounts or pay indemnification amounts owing to the Trustee from the
Trust Fund pursuant to Section 8.06 and (ii) to the Class R Certificate and such
distributions shall be made only after all preceding distributions shall have
been made until such remainder shall have been fully distributed.

          (i) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Trustee shall allocate the Applied Realized Loss
Amount for the Certificates to reduce the Certificate Principal Balances of the
Class C Certificates and the Subordinated Certificates in the following order of
priority:

               (i) to the Class C Certificates, until the Class C Certificate
Principal Balance is reduced to zero;

               (ii) to the Class B-3 Certificates until the Class B-3
Certificate Principal Balance is reduced to zero;

               (iii) to the Class B-2 Certificates until the Class B-2
Certificate Principal Balance is reduced to zero;

               (iv) to the Class B-1 Certificates until the Class B-1
Certificate Principal Balance is reduced to zero;

               (v) to the Class M-6 Certificates until the Class M-6 Certificate
Principal Balance is reduced to zero;

               (vi) to the Class M-5 Certificates until the Class M-5
Certificate Principal Balance is reduced to zero;

               (vii) to the Class M-4 Certificates until the Class M-4
Certificate Principal Balance is reduced to zero;


                                      -93-

<PAGE>

               (viii) to the Class M-3 Certificates until the Class M-3
Certificate Principal Balance is reduced to zero;

               (ix) to the Class M-2 Certificates until the Class M-2
Certificate Principal Balance is reduced to zero; and

               (x) to the Class M-1 Certificates until the Class M-1 Certificate
Principal Balance is reduced to zero.

          (j) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if such Holder has so notified
the Trustee at least five (5) Business Days prior to the related Record Date or,
if not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.

          In accordance with this Agreement, the Servicer shall prepare and
deliver a report (the "Remittance Report") to the Trustee in the form of a
computer readable magnetic tape (or by such other electronic means as the
Servicer and the Trustee may agree from time to time) containing such data and
information as to permit the Trustee to prepare the Monthly Statement to
Certificateholders and make the required distributions for the related
Distribution Date. The Trustee will prepare the Monthly Report based solely upon
the information received from the Servicer.

          (k) The Trustee is hereby directed by the Depositor to execute the Cap
Contract on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents, adequacy or
sufficiency of the Cap Contract, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Trustee under the Cap Contract at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in the Cap
Contract, the Trustee shall not be required to make any payments to the
counterparty under the Cap Contract. Any payments received under the terms of
the Cap Contract will be available to pay the holders of the Offered
Certificates (other than holders of the Class B-2 Certificates and Class B-3
Certificates) up to the amount of any Floating Rate Certificate Carryover
remaining after the application of Section 4.04(f)(xi) on such Distribution
Date; provided, however, that payments received on the Cap Contract will not be
used to pay any Floating Rate Certificate Carryover that results from a failure
to allocate Applied Realized Loss Amounts to the Class A Certificates. Any
amounts in the Cap Contract Account on any Distribution Date in excess of
amounts required, subject to the restrictions set forth in the preceding
sentence, to pay outstanding Floating Rate Certificate Carryovers (other than
with respect to the Class B-2 and Class B-3 Certificates) on such Distribution
Date will be distributed to the holders of the Class C Certificates. Payments
from the Cap Contract Account in respect of the Floating Rate Certificate
Carryovers shall, subject to the limitations set forth in the second preceding
sentence of this Section 4.04(k), be paid to the Class A, Class M and Class B
Certificates (other than the Class B-2 and Class B-3 Certificates) in accordance
with the provisions of Section 4.04(f)(xi) hereof.

          For any Distribution Date on which there is a payment under the Cap
Contract based on a notional balance in excess of the aggregate Certificate
Principal Balance of the Offered Certificates, the amount representing such
excess payment, to the extent not otherwise used to pay Floating Rate
Certificate Carryovers, shall not be an asset of the Trust Fund and, instead,
shall be paid into and


                                      -94-

<PAGE>

distributed out of a separate trust created by this Agreement for the benefit of
the Class C Certificates and shall be distributed to the Class C Certificates.

               (i) On or prior to the Cap Contract Termination Date, amounts, if
any, received by the Trustee for the benefit of the Trust Fund in respect of the
Cap Contract shall be deposited by the Trustee into the Cap Contract Account.
With respect to any Distribution Date on or prior to the Cap Contract
Termination Date, the amount, if any, payable by the Cap Contract Counterparty
under the Cap Contract will equal the product of (i) the excess of (x) One-Month
LIBOR (as determined by the Cap Contract Counterparty and subject to a cap equal
to the rate with respect to such Distribution Date as shown under the heading
"Upper Collar" in the Cap Tables), over (y) the rate with respect to such
Distribution Date as shown under the heading "Lower Collar" in the Cap Tables,
(ii) an amount equal to the Cap Contract Notional Balance and (iii) the number
of days in such Accrual Period, divided by 360.

               (ii) Amounts on deposit in the Cap Contract Account will remain
uninvested pending distribution to Certificateholders.

               (iii) The Cap Contract is scheduled to remain in effect until the
Cap Contract Termination Date and will be subject to early termination only in
limited circumstances. Such circumstances include certain insolvency or
bankruptcy events in relation to the Cap Contract Counterparty (after a grace
period of three Local Business Days, as defined in the Cap Contract, after
notice of such failure is received by the Cap Contract Counterparty) to make a
payment due under the Cap Contract, the failure by the Cap Contract Counterparty
or the Trustee (after a cure period of 20 days after notice of such failure is
received) to perform any other agreement made by it under the Cap Contract, the
termination of the Trust Fund and the Cap Contract becoming illegal or subject
to certain kinds of taxation.

          (l) On the Closing Date, the Supplemental Interest Trust shall be
established and maintained pursuant to this Agreement, as a separate trust, the
corpus of which shall be held by the Trustee for the benefit of the holders of
the Certificates as a segregated subtrust of the Trust Fund. The Supplemental
Interest Trust shall be an Eligible Account, and funds deposited therein shall
be held separate and apart from, and shall not be commingled with, any other
moneys, including, without limitation, other moneys of the Trustee held pursuant
to this Agreement. In no event shall any funds deposited in the Supplemental
Interest Trust be credited to or made available to any other account of the
Trust Fund. The records of the Trustee shall at all times reflect that the
Supplemental Interest Trust is a subtrust of the Trust Fund, the assets of which
are segregated from other assets of the Trust Fund.

          The Trustee shall enforce all of the rights of the Trust Fund and
exercise any remedies under the Swap Agreement and, in the event the Swap
Agreement is terminated as a result of the designation by either party thereto
of an Early Termination Date (as defined therein), find a replacement
counterparty to enter into a replacement swap agreement utilizing the amounts of
the net Swap Termination Payments received.

          Any Swap Termination Payment received by the Trustee shall be
deposited in the Supplemental Interest Trust and shall be used to make any
upfront payment required under a replacement swap agreement and any upfront
payment received from the counterparty to a replacement swap agreement shall be
used to pay any Swap Termination Payment owed to the Swap Counterparty.

          Notwithstanding anything contained herein, in the event that a
replacement swap agreement cannot be obtained within 30 days after receipt by
the Trustee of the Swap Termination Payment paid by the terminated Swap
Counterparty, the Trustee shall deposit such Swap Termination Payment into a
separate, segregated non-interest bearing subtrust established by the Trustee
and the


                                      -95-

<PAGE>

Trustee shall, on each Distribution Date following receipt of such Swap
Termination Payment, withdraw from such subtrust, an amount equal to the Net
Swap Payment, if any, that would have been paid to the Trust Fund by the
original Swap Counterparty (computed in accordance with the original Swap
Agreement, a form of which is attached hereto as Exhibit Q) and distribute such
amount in accordance with Section 4.04 of this Agreement. Any such subtrust
shall not be an asset of any REMIC. Any amounts remaining in such subtrust shall
be distributed to the holders of the Class C Certificates on the Distribution
Date following the earlier of (i) the termination of the Trust Fund pursuant to
Section 9.01 and (ii) November 25, 2010.

          On any Distribution Date, any Swap Termination Payments or Net Swap
Payments owed to the Swap Counterparty will be paid out of, or any Net Swap
Payments or Swap Termination Payments received from the Swap Counterparty will
be deposited into, the Supplemental Interest Trust. The Supplemental Interest
Trust will not be an asset of any REMIC. Funds in the Supplemental Interest
Trust shall be distributed in the following order of priority by the Trustee:

               (i) to the Swap Counterparty, all Net Swap Payments, if any, owed
to the Swap Counterparty for such Distribution Date;

               (ii) to the Swap Counterparty, any Swap Termination Payment,
other than a Defaulted Swap Termination Payment, if any, owed to the Swap
Counterparty;

               (iii) to each class of the Class A Certificates, on a pro rata
basis, any Current Interest and any Interest Carry Forward Amount with respect
to such class to the extent unpaid;

               (iv) sequentially, to the Class M-1 Certificates on a pro rata
basis, the Class M-2 Certificates on a pro rata basis, the Class M-3
Certificates on a pro rata basis, the Class M-4 Certificates on a pro rata
basis, the Class M-5 Certificates on a pro rata basis, the Class M-6
Certificates on a pro rata basis, the Class B-1 Certificates on a pro rata
basis, the Class B-2 Certificates on a pro rata basis and the Class B-3
Certificates on a pro rata basis, in that order, any Current Interest for such
class to the extent unpaid;

               (v) to the Class A, Class R, Class M and Class B Certificates, to
pay principal as described and in the same manner and order of priority as set
forth in Sections 4.04(d)(i) through 4.04(d)(x) in order to restore any
previously attained levels of the Overcollateralization Amount, and after giving
effect to distributions from Principal Distribution Amount for each such Class;

               (vi) sequentially, to the Class M-1 Certificates on a pro rata
basis, the Class M-2 Certificates on a pro rata basis, the Class M-3
Certificates on a pro rata basis, the Class M-4 Certificates on a pro rata
basis, the Class M-5 Certificates on a pro rata basis, the Class M-6
Certificates on a pro rata basis, the Class B-1 Certificates on a pro rata
basis, the Class B-2 Certificates on a pro rata basis and the Class B-3
Certificates on a pro rata basis, in that order, any Interest Carry Forward with
respect to such class to the extent unpaid;

               (vii) sequentially, to the Class M-1 Certificates on a pro rata
basis, the Class M-2 Certificates on a pro rata basis, the Class M-3
Certificates on a pro rata basis, the Class M-4 Certificates on a pro rata
basis, the Class M-5 Certificates on a pro rata basis, the Class M-6
Certificates on a pro rata basis, the Class B-1 Certificates on a pro rata
basis, the Class B-2 Certificates on a pro rata basis and the Class B-3
Certificates on a pro rata basis, in that order, any Unpaid Realized Loss Amount
for such class to the extent unpaid;


                                      -96-

<PAGE>

               (viii) to the Class A, Class R, Class M and Class B Certificates,
on a pro rata basis, any Floating Rate Certificate Carryover to the extent not
paid based on the amount of such unpaid Floating Rate Certificate Carryover;

               (ix) to the Swap Counterparty, any Defaulted Swap Termination
Payment owed to the Swap Counterparty to the extent not already paid; and

               (x) to the Class C Certificates any remaining amount.

          Upon termination of the Trust Fund, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities set
forth in this Section 4.04(l).

          (m) With respect to the failure of the Swap Counterparty to perform
any of its obligations under the Swap Agreement, the breach by the Swap
Counterparty of any of its representations and warranties made pursuant to the
Swap Agreement, or the termination of the Swap Agreement, the Trustee shall send
any notices and make any demands required hereunder.

          SECTION 4.05. Monthly Statements to Certificateholders.

          (a) Not later than each Distribution Date based solely on information
provided by the Servicer, the Trustee shall prepare and make available on its
website located at www.ctslink.com to each Holder of a Class of Certificates of
the Trust Fund, the Servicer, the Rating Agencies and the Depositor a statement
setting forth for the Certificates:

               (i) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all scheduled
payments of principal included therein, (C) the Extra Principal Distribution
Amount, if any, and (D) the aggregate amount of Prepayment Charges, if any;

               (ii) the amount of such distribution to Holders of each Class
allocable to interest, together with any Non-Supported Interest Shortfalls
allocated to each Class;

               (iii) any Interest Carryforward Amount for each Class of the
Offered Certificates;

               (iv) the Class Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss Amounts
for such Distribution Date;

               (v) the Pool Stated Principal Balance for such Distribution Date;

               (vi) the amount of the Servicing Fee paid to or retained by the
Servicer, and any amounts constituting reimbursement or indemnification of the
Servicer;

               (vii) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;

               (viii) the amount of Advances included in the distribution on
such Distribution Date;


                                      -97-

<PAGE>

               (ix) the cumulative amount of (A) Realized Losses and (B) Applied
Realized Loss Amounts to date, in the aggregate and with respect to Group One
Mortgage Loans and Group Two Mortgage Loans;

               (x) the amount of (A) Realized Losses and (B) Applied Realized
Loss Amounts with respect to such Distribution Date, in the aggregate and with
respect to Group One Mortgage Loans and Group Two Mortgage Loans;

               (xi) the number and aggregate principal amounts of Mortgage Loans
(A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to 60 days,
(2) 61 to 90 days, (3) 91 to 120 days, (4) 121 to 150 days, (5) 151 to 180 days
and (6) 181 or more days, and (B) in foreclosure and Delinquent (1) 31 to 60
days, (2) 61 to 90 days, (3) 91 to 120 days, (4) 121 to 150 days, (5) 151 to 180
days and (6) 181 or more days, in each case as of the close of business on the
last day of the calendar month preceding such Distribution Date, in the
aggregate and with respect to Group One Mortgage Loans and Group Two Mortgage
Loans;

               (xii) the total number and principal balance of any REO
Properties as of the close of business on the last day of the calendar month
preceding such Distribution Date, in the aggregate and with respect to Group One
Mortgage Loans and Group Two Mortgage Loans;

               (xiii) the aggregate Stated Principal Balance of all Liquidated
Loans as of the preceding Distribution Date, in the aggregate and with respect
to Group One Mortgage Loans and Group Two Mortgage Loans;

               (xiv) whether a Stepdown Trigger Event or Class A-1 Trigger Event
has occurred and is in effect;

               (xv) with respect to each Class of Certificates, any Interest
Carry Forward Amount with respect to such Distribution Date for each such Class,
any Interest Carry Forward Amount paid for each such Class and any remaining
Interest Carry Forward Amount for each such Class;

               (xvi) with respect to each Class of Certificates, any Floating
Rate Certificate Carryover with respect to such Distribution Date for each such
Class, any Floating Rate Certificate Carryover paid for each such Class and any
remaining Floating Rate Certificate Carryover for each such Class;

               (xvii) the number and Stated Principal Balance (as of the
preceding Distribution Date) of any Mortgage Loans which were purchased or
repurchased during the preceding Due Period and since the Cut-off Date;

               (xviii) the number of Mortgage Loans for which Prepayment Charges
were received during the related Prepayment Period and, for each such Mortgage
Loan, the amount of Prepayment Charges received during the related Prepayment
Period and in the aggregate of such amounts for all such Mortgage Loans since
the Cut-off Date;

               (xix) as of each Distribution Date, the amount, if any, to be
deposited in the Certificate Account pursuant to the Cap Contract as described
in Section 4.04(k) and the amount thereof to be paid to the Class A, Class M and
Class B Certificates described in Section 4.04(k) hereof;

               (xx) the amount and purpose of any withdrawal from the Collection
Account pursuant to Section 3.08(a)(v);


                                      -98-

<PAGE>

               (xxi) the amount of any payments to each Class of Certificates
that are treated as payments received in respect of a REMIC Regular Interest or
REMIC "residual interest" and the amount of any payments to each Class of
Certificates that are not treated as payments received in respect of a REMIC
Regular Interest or REMIC "residual interest";

               (xxii) as of each Distribution Date, the amount, if any, to be
deposited in the Supplemental Interest Trust pursuant to the Swap Agreement as
described in Section 4.04(l) and the amount thereof to be paid to the
Certificates; and

               (xxiii) the amount of the MI Insurer Fee paid to the MI Insurer;

               (xxiv) the number and aggregate Stated Principal Balance of
Mortgage Loans covered by the MI Policy as of the end of the related Due Period;
and

               (xxv) (A) the amount of any claims paid by the MI Insurer
pursuant to the MI Policy with respect to principal, (B) the amount of any
claims paid by the MI Insurer pursuant to the MI Policy with respect to
interest, and (C) solely to the extent provided by the Servicer, the amount of
any claims made under the MI Policy and the amount of any claims rejected under
the MI Policy, each as of such Distribution Date.

          (b) The Trustee will make the Monthly Statement (and, at its option,
any additional files containing the same information in an alternative format)
available each month to Certificateholders, other parties to this Agreement and
any other interested parties via the Trustee's Internet website. The Trustee's
Internet website shall initially be located at "www.ctslink.com". Assistance in
using the website can be obtained by calling the Trustee's customer service desk
at (301) 815-6600. Parties that are unable to use the website are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way the monthly statements to Certificateholders are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trustee shall provide timely and adequate notification to all
above parties regarding any such changes.

          The Trustee shall also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement and may affix thereto
any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party hereto).

          As a condition to access the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement.

          (c) Reserved;

          (d) If so requested in writing within a reasonable period of time
after the end of each calendar year, the Trustee shall make available on its
website or cause to be furnished to each Person who at any time during the
calendar year was a Certificateholder of record, a statement containing the
information set forth in clauses (a)(i) and (a)(ii) of this Section 4.05
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as are from time to time in effect.


                                      -99-

<PAGE>

          (e) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificate the Form 1066 and each Form
1066Q and shall respond promptly to written requests made not more frequently
than quarterly by any Holder of Class R Certificate with respect to the
following matters: The original projected principal and interest cash flows on
the Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;

               (i) The projected remaining principal and interest cash flows as
of the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;

               (ii) The Prepayment Assumption and any interest rate assumptions
used in determining the projected principal and interest cash flows described
above;

               (iii) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized through the end
of such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;

               (iv) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the REMICs with respect
to such regular interests or bad debt deductions claimed with respect to the
Mortgage Loans;

               (v) The amount and timing of any non-interest expenses of the
REMICs; and

               (vi) Any taxes (including penalties and interest) imposed on the
REMICs, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or local
income or franchise taxes.

          The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.12.

                                    ARTICLE V
                                THE CERTIFICATES

          SECTION 5.01. The Certificates.

     The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof (except that
one Certificate of each Class may be issued in a different amount which must be
in excess of the applicable minimum dollar denomination) and aggregate dollar
denominations as set forth in the following table:

<TABLE>
<CAPTION>
           Minimum     Integral Multiples in   Original Certificate
Class   Denomination     Excess of Minimum       Principal Balance
-----   ------------   ---------------------   --------------------
<S>     <C>            <C>                     <C>
A-1A     $25,000.00            $1.00               $236,060,000
A-1B     $25,000.00            $1.00               $ 59,015,000
A-2A     $25,000.00            $1.00               $182,537,000
A-2B     $25,000.00            $1.00               $ 83,008,000
</TABLE>


                                     -100-

<PAGE>

<TABLE>
<CAPTION>
           Minimum     Integral Multiples in   Original Certificate
Class   Denomination     Excess of Minimum       Principal Balance
-----   ------------   ---------------------   --------------------
<S>     <C>            <C>                     <C>
A-2C     $25,000.00            $1.00               $ 21,065,000
M-1      $25,000.00            $1.00               $ 65,912,000
M-2      $25,000.00            $1.00               $ 24,131,000
M-3      $25,000.00            $1.00               $  7,563,000
M-4      $25,000.00            $1.00               $ 11,885,000
M-5      $25,000.00            $1.00               $  7,203,000
M-6      $25,000.00            $1.00               $  4,682,000
B-1      $25,000.00            $1.00               $  6,483,000
B-2      $25,000.00            $1.00               $  3,601,000
B-3      $25,000.00            $1.00               $  3,601,000
C                (1)              (1)                       100%
R        $   100.00              N/A               $        100
P                (2)              (2)                        (2)
</TABLE>

----------
(1)  The Class C Certificates shall not have minimum dollar denominations or
     certificate notional amounts and shall be issued in a minimum percentage
     interest of 25%. The initial Overcollateralization Amount is $3,606,902.66.

(2)  The Class P Certificates shall not have minimum dollar denominations or
     Certificate Principal Balances and shall be issued in a minimum percentage
     interest of 25%.

          The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trust Fund, notwithstanding that such individuals or any of them have ceased
to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any Affiliate thereof.

          SECTION 5.02. Certificate Register; Registration of Transfer and
     Exchange of Certificates.

          (a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.

          At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate


                                     -101-

<PAGE>

presented or surrendered for registration of Transfer or exchange shall be
accompanied by a written instrument of Transfer in form satisfactory to the
Trustee duly executed by the holder thereof or his attorney duly authorized in
writing.

          No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Trustee in accordance with such
Trustee's customary procedures.

          No Transfer of a Class C or Class P Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall (except with
respect to the initial transfer of a Class C or Class P Certificate by Merrill
Lynch & Co. or, in connection with any transfers of a Class C or Class P
Certificate to the indenture trustee under an Indenture pursuant to which NIM
Notes are issued) each certify to the Trustee in writing the facts surrounding
the Transfer in substantially the form set forth in Exhibit F (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit G (the "Investment Letter") or Exhibit H (the "Rule 144A Letter") or
(ii) there shall be delivered to the Trustee an Opinion of Counsel that such
Transfer may be made pursuant to an exemption from the Securities Act, which
Opinion of Counsel shall not be an expense of the Depositor or the Trustee. The
Depositor shall provide to any Holder of a Class C or Class P Certificate and
any prospective transferee designated by any such Holder, information regarding
the related Certificates and the Mortgage Loans and such other information as
shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for Transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information in the possession of the Trustee regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Class C or Class P Certificate desiring to
effect such Transfer shall, and does hereby agree to, indemnify the Depositor
and the Trustee against any liability that may result if the Transfer is not so
exempt or is not made in accordance with such federal and state laws.

          By acceptance of a Regulation S Global Security, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will only transfer such a Certificate as provided herein. In
addition, each Holder of a Regulation S Global Security shall be deemed to have
represented and warranted to the Depositor, the Trustee and any of their
respective successors that: (i) such Person is not a "U.S. person" within the
meaning of Regulation S and was, at the time the buy order was originated,
outside the United States and (ii) such Person understands that such
Certificates have not been registered under the Securities Act and that (x)
until the expiration of the 40-day distribution compliance period (within the
meaning of Regulation S), no offer, sale, pledge or other transfer of such
Certificates or any interest therein shall be made in the United States or to or
for the account or benefit of a U.S. person (each as defined in Regulation S),
(y) if in the future it decides to offer, resell, pledge or otherwise transfer
such Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) to a person which the seller reasonably believes
is a "qualified institutional buyer" (a "QIB") as defined in Rule 144A under the
Securities Act, that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in


                                     -102-

<PAGE>

reliance on Rule 144A or (B) in an offshore transaction (as defined in
Regulation S) in compliance with the provisions of Regulation S, in each case in
compliance with the requirements of this Agreement; and it will notify such
transferee of the transfer restrictions specified in this Section.

          No transfer of a Certificate that is neither an ERISA Restricted
Certificate nor a Class R Certificate shall be registered unless the transferee
provides the Trustee with a representation that either (i) such transferee is
not, and is not acting for, on behalf of or with any assets of, an employee
benefit plan or other arrangement subject to Title I of ERISA or plan subject to
Section 4975 of the Code, or (ii) until the termination of the Swap Agreement,
the acquisition and holding of the Certificate are eligible for exemptive relief
under Prohibited Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE
91-38, PTCE 95-60 or PTCE 96-23.

          No transfer of an ERISA Restricted Certificate or a Class R
Certificate will be registered unless the Trustee has received (I) a
representation that the transferee is not an employee benefit plan subject to
Title I of ERISA, a plan subject to Section 4975 of the Code or a plan subject
to any state, local, federal, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law"), or any Person
directly or indirectly acquiring such Certificate for, on behalf of, or with any
assets of any such plan (collectively, "Plan"), or (II) solely in the case of an
ERISA Restricted Certificate, (A) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation that such transferee is an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account," as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60 and
the acquisition and holding of the Certificate is covered and exempt under
Sections I and III of PTCE 95-60 (in the case of any ERISA Restricted
Certificate other than Class C Certificates or Class P Certificates, after the
termination of the Swap Agreement), or (B) solely in the case of any such
Certificate that is a Definitive Certificate, an Opinion of Counsel satisfactory
to the Trustee, and upon which the Trustee shall be entitled to rely, to the
effect that the acquisition and holding of such Certificate will not constitute
or result in a nonexempt prohibited transaction under Title I of ERISA or
Section 4975 of the Code, or a violation of Similar Law, and will not subject
the Trustee, the Servicer or the Depositor to any obligation in addition to
those expressly undertaken in this Agreement, which Opinion of Counsel shall not
be an expense of the Trustee, the Servicer or the Depositor.

          Except in the case of a Definitive Certificate, the representations as
set forth in the two immediately preceding paragraphs of this Subsection
5.02(a), other than clause (II)(B) in the immediately preceding paragraph, shall
be deemed to have been made to the Trustee by the transferee's acceptance of the
Certificate (or the acceptance by a Certificate Owner of the beneficial interest
in any Certificate).

          Notwithstanding any other provision herein to the contrary, any
purported transfer of Certificate to or on behalf of a Plan without the delivery
to the Trustee of a representation or an Opinion of Counsel satisfactory to the
Trustee as described above shall be void and of no effect. The Trustee shall not
be under any liability to any Person for any registration or transfer of any
Certificate that is in fact not permitted by this Section 5.02(a), nor shall the
Trustee be under any liability for making any payments due on such Certificate
to the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the transfer was registered by
the Trustee in accordance with the foregoing requirements. The Trustee shall be
entitled, but not obligated, to recover from any Holder of any Certificate that
held such Certificate in violation of this Section 5.02(a) all payments made on
such Certificate at and after the time it commenced such holding. Any such
payments so recovered shall be paid and delivered to the last preceding Holder
of such Certificate that is not a Plan.


                                     -103-

<PAGE>

          (b) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:

               (i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.

               (ii) No Ownership Interest in a Class R Certificate may be
purchased, transferred or sold, directly or indirectly, except in accordance
with the provisions hereof. No Ownership Interest in a Class R Certificate may
be registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class R Certificate unless, in addition
to the certificates required to be delivered to the Trustee under subparagraph
(a) above, the Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form attached
hereto as Exhibit E-1 and an affidavit of the proposed transferor in the form
attached hereto as Exhibit E-2. In the absence of a contrary instruction from
the transferor of a Class R Certificate, declaration (11) in Appendix A of the
Transfer Affidavit may be left blank. If the transferor requests by written
notice to the Trustee prior to the date of the proposed transfer that one of the
two other forms of declaration (11) in Appendix A of the Transfer Affidavit be
used, then the requirements of this Section 5.02(b)(ii) shall not have been
satisfied unless the Transfer Affidavit includes such other form of declaration.

               (iii) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest in
a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person for
whom such Person is acting as nominee, trustee or agent in connection with any
Transfer of a Class R Certificate and (C) not to Transfer its Ownership Interest
in a Class R Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee. Further, no transfer, sale or other
disposition of any Ownership Interest in a Class R Certificate may be made to a
person who is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI (or any successor
thereto) and the Trustee consents to such transfer, sale or other disposition in
writing.

               (iv) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of this Section
5.02(b) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of a
Class R Certificate in violation of the provisions of this Section 5.02(b), then
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such Class
R Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact not permitted
by Section 5.02(a) and this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the Transfer
was registered after receipt of the related Transfer Affidavit. The Trustee
shall be entitled but not obligated to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time it became a
Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R Certificate at and after either
such time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of such
Certificate.


                                     -104-

<PAGE>

               (v) At the option of the Holder of the Class R Certificate, the
Class LTR Interest and the residual interest in the Upper Tier REMIC may be
severed and represented by separate certificates (with the separate certificate
that represents the Residual Interest also representing all rights of the Class
R Certificate to distributions attributable to a Pass-Through Rate on the Class
R Certificate in excess of the REMIC Pass-Through Rate); provided, however, that
such separate certification may not occur until the Trustee receive an Opinion
of Counsel to the effect that separate certification in the form and manner
proposed would not result in the imposition of federal tax upon the Trust Fund
or any of the REMICs provided for herein or cause any of the REMICs provided for
herein to fail to qualify as a REMIC; and provided further, that the provisions
of Sections 5.02(a) and (b) will apply to each such separate certificate as if
the separate certificate were a Class R Certificate. If, as evidenced by an
Opinion of Counsel, it is necessary to preserve the REMIC status of any of the
REMICs provided for herein, the Class LTR Interest and the Residual Interest in
the Upper Tier REMIC shall be severed and represented by separate certificates
(with the separate certificate that represents the Residual Interest also
representing all rights of the Class R Certificate to distributions attributable
to a Pass-Through Rate on the Class R Certificate in excess of the REMIC
Pass-Through Rate).

          The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(b) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee or the Depositor, to the
effect that the elimination of such restrictions will not cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the Trust
Fund, any REMIC provided for herein, a Certificateholder or another Person. Each
Person holding or acquiring any Ownership Interest in a Class R Certificate
hereby consents to any amendment of this Agreement that, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.

          (c) The transferor of the Class R Certificate shall notify the Trustee
in writing upon the transfer of the Class R Certificate.

          (d) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor or the Trustee.

          SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.

          If (a) any mutilated Certificate is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee and its counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates


                                     -105-

<PAGE>

surrendered to the Trustee under the terms of this Section 5.03 shall be
canceled and destroyed by the Trustee in accordance with its standard procedures
without liability on its part.

          SECTION 5.04. Persons Deemed Owners.

          The Trustee and any agent of the Trustee may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Trustee, nor any agent of the Trustee
shall be affected by any notice to the contrary.

          SECTION 5.05. Access to List of Certificateholders' Names and
     Addresses.

          If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Trustee, then the
Trustee shall, within ten Business Days after the receipt of such request,
provide the Depositor or such Certificateholders at such recipients' expense the
most recent list of the Certificateholders of the Trust Fund held by the
Trustee, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.

          SECTION 5.06. Book-Entry Certificates.

          The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Class C, Class P and Class R Certificates shall be Definitive
Certificates (as defined below). The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of a Book-Entry Certificate will receive a
definitive certificate representing such Certificate Owner's interest in such
Certificates, except as provided in Section 5.08. Unless and until definitive,
fully registered Certificates ("Definitive Certificates") have been issued to
the Certificate Owners of the Book-Entry Certificates pursuant to Section 5.08:

          (a) the provisions of this Section shall be in full force and effect;

          (b) the Depositor and the Trustee may deal with the Depository and the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of the
Book-Entry Certificates;

          (c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;

          (d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;


                                     -106-

<PAGE>

          (e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;

          (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

          (g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.

          For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.

          SECTION 5.07. Notices to Depository.

          Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.

          SECTION 5.08. Definitive Certificates.

          If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depository or the Depositor advises the Trustee that the
Depository is no longer willing, qualified or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor notifies the Trustee and the Depository of its
intent to terminate the book entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Book-Entry Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners of such Class requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall
authenticate and deliver such Definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of such instructions and
each may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of such Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.


                                     -107-

<PAGE>

          SECTION 5.09. Maintenance of Office or Agency.

          The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
offices at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Client Services Manager - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE2 as offices for such purposes. The Trustee will give prompt
written notice to the Certificateholders of any change in such location of any
such office or agency.

          SECTION 5.10. [RESERVED].

                                   ARTICLE VI
                         THE DEPOSITOR AND THE SERVICER

          SECTION 6.01. Respective Liabilities of the Depositor and the
     Servicer.

          The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.

          SECTION 6.02. Merger or Consolidation of the Depositor and the
     Servicer.

          Except as provided in the next paragraph, the Depositor and the
Servicer will each keep in full effect its existence, rights and franchises as a
corporation or banking association under the laws of the United States or under
the laws of one of the States thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.

          Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any Person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding (except for the
execution of an assumption agreement where such succession is not effected by
operation of law); provided, however, that the successor or surviving Person to
the Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, Fannie Mae or Freddie Mac.

          SECTION 6.03. Limitation on Liability of the Depositor, the Servicer
     and Others.

          None of the Depositor, the Servicer nor any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, the Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor or the Servicer and any director, officer,
employee or agent of the Depositor or the Servicer 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. The Depositor, the Servicer and any
director, officer, employee or agent of


                                     -108-

<PAGE>

the Depositor or the Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense, incurred in connection with the
performance of their duties under this agreement or incurred in connection with
any audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than (i) any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder or (ii)
which does not constitute an "unanticipated expense" within the meaning of
Treasury Regulation Section 1.860G-1(b)(3)(ii). Neither the Depositor nor the
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and that
in its opinion may involve it in any expense or liability; provided, however,
that either the Depositor or the Servicer in its discretion may undertake any
such action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and the interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Depositor and the Servicer
shall be entitled to be reimbursed therefor out of the Collection Account as
provided by Section 3.08 hereof.

          SECTION 6.04. Limitation on Resignation of Servicer.

          The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer reasonably acceptable to the Trustee
is appointed and has assumed the Servicer's responsibilities, duties,
liabilities and obligations hereunder. Any such resignation shall not relieve
the Servicer of any of the obligations specified in Section 7.01 and 7.02 as
obligations that survive the resignation or termination of the Servicer.

          SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.

          The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Fannie Mae or Freddie Mac for Persons
performing servicing for mortgage loans purchased by Fannie Mae or Freddie Mac.
The Servicer shall provide the Trustee, upon request, with copies of such
policies and fidelity bond or a certification from the insurance provider
evidencing such policies and fidelity bond. In the event that any such policy or
bond ceases to be in effect, the Servicer shall use its reasonable commercial
efforts to obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement.

                                   ARTICLE VII
                        DEFAULT; TERMINATION OF SERVICER

          SECTION 7.01. Events of Default.

          "Event of Default," wherever used herein, means any one of the
following events:

               (i) any failure by the Servicer to deposit in the Collection
Account or the Certificate Account or remit to the Trustee (a) any payment
(excluding Advances) required to be made


                                     -109-

<PAGE>

under the terms of this Agreement, which failure shall continue unremedied for
three Business Days or (b) Advances required to be made under Section 4.01
hereof, which failure shall continue unremedied as of 3:00 p.m. New York City
Time on the Business Day immediately prior to the related Distribution Date, or

               (ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer contained in this Agreement or any representation or warranty shall
prove to be untrue, which failure or breach shall continue unremedied for a
period of 60 days after the date on which written notice of such failure shall
have been given to the Servicer by the Trustee or the Depositor; or

               (iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or

               (iv) consent by the Servicer to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or all or
substantially all of the property of the Servicer; or

               (v) admission by a Servicer in writing of its inability to pay
its debts generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or

               (vi) any failure by the Servicer to duly perform, within the
required time period, its obligations under Sections 3.17, 3.18 and 3.22 of this
Agreement, which failure continues unremedied for a period of ten (10) 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.

          If an Event of Default shall occur with respect to the Servicer
pursuant to subsection (i) of this Section 7.01, the Trustee shall by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. If an Event of Default shall occur with respect to
the Servicer pursuant to subsection (ii) - (vi) of this Section 7.01, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, the Trustee may, by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On or after the receipt by the Servicer of any such
written notice, all authority and power of the Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee. To the extent the Event of Default resulted from the failure of the
Servicer to make a required Advance, the Trustee shall thereupon make any
Advance described in Section 4.01 hereof subject to Section 3.04 hereof. The
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the


                                      -110-

<PAGE>

Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans. The Servicer and the Trustee shall promptly notify the
Rating Agencies of the occurrence of an Event of Default or an event that, with
notice, passage of time, other action or any combination of the foregoing would
be an Event of Default, such notice to be provided in any event within two
Business Days of such occurrence.

          Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Section 3.08(a), and any other amounts payable to
the Servicer hereunder the entitlement to which arose prior to the termination
of its activities hereunder. Notwithstanding anything herein to the contrary,
upon termination of the Servicer hereunder, any liabilities of the Servicer
which accrued prior to such termination shall survive such termination.

          SECTION 7.02. Trustee to Act; Appointment of Successor.

          On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, compensation and reimbursement for costs
and expenses that the Servicer would have been entitled to hereunder if the
Servicer had continued to act hereunder. Notwithstanding the foregoing, if the
Trustee has become the successor to the Servicer in accordance with Section 7.01
hereof, the Trustee may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making Advances pursuant to Section 4.01
hereof or if it is otherwise unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which does not adversely affect the then current
rating of the Certificates by each Rating Agency as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder. Any successor Servicer shall be
an institution that is a Fannie Mae and Freddie Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, and that is willing
to service the Mortgage Loans and executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 hereof incurred prior to termination of the Servicer
under Section 7.01), with like effect as if originally named as a party to this
Agreement; and provided further that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced as a result of such assignment and
delegation. No appointment of a successor to the Servicer hereunder shall be
effective until the Trustee shall have consented thereto and written notice of
such proposed appointment shall have been provided by the Trustee to each
Certificateholder. The Trustee shall not resign as servicer until a successor
servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Servicer hereunder, the Trustee, unless the
Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such


                                      -111-

<PAGE>

succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.

          Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.

          SECTION 7.03. Notification to Certificateholders.

          (a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Depositor and to each Rating Agency.

          (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.

                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

          SECTION 8.01. Duties of the Trustee.

          The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. In case an Event of Default or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee
shall, at the written direction of the majority of the Certificateholders, or
may, proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.

          The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement. If any such
instrument is found not to conform on its face to the requirements of this
Agreement in a material manner, the Trustee shall notify the person providing
such Agreement of such non-conformance, and if the instrument is not corrected
to the Trustee's satisfaction, the Trustee will provide notice thereof to the
Certificateholders and take such further action as directed by the
Certificateholders.


                                      -112-

<PAGE>

          No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability that would be imposed by
reason of its willful misfeasance or bad faith; provided, however, that:

               (i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable, individually or as Trustee,
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee, and the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;

               (ii) the Trustee shall not, individually or as Trustee, be liable
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee unless the Trustee was negligent or acted in
bad faith or with willful misfeasance; and

               (iii) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the Holders in accordance with
this Agreement relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement.

          SECTION 8.02. Certain Matters Affecting the Trustee.

          (a) Except as otherwise provided in Section 8.01:

               (i) the Trustee may request and conclusively rely upon and shall
be fully protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;

               (ii) the Trustee may consult with counsel of its choice and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of Counsel;

               (iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;

               (iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by the Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class;


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<PAGE>

               (v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
custodians, accountants, attorneys or independent contractors and the Trustee
will not be responsible for any misconduct or negligence on the part of any
agent, custodian, accountant, attorney or independent contractor appointed with
due care by it hereunder;

               (vi) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such liability is not assured to it;

               (vii) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this Agreement
(other than as issuer of the investment security);

               (viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have received
written notice thereof;

               (ix) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to make any investigation
of matters arising hereunder or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless the
Certificateholders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred therein or thereby;

               (x) if requested by the Servicer, the Trustee may appoint the
Servicer as the Trustee's attorney-in-fact in order to carry out and perform
certain activities that are necessary or appropriate for the servicing and
administration of the Mortgage Loans pursuant to this Agreement. Such
appointment shall be evidenced by a power of attorney in such form as may be
agreed to by the Trustee and the Servicer. The Trustee shall have no liability
for any action or inaction of the Servicer in connection with such power of
attorney and the Trustee shall be indemnified by the Servicer for all
liabilities, costs and expenses incurred by the Trustee in connection with the
Servicer's use or misuse of such powers of attorney; and

               (xi) the Trustee may rely on the sole judgment of the Depositor
in determining whether "Eligible Collateral" (as defined in the Cap Contract)
has been delivered in an amount equal to the "Exposure" (as defined in the Cap
Contract) as contemplated by Section 4(10) of the Cap Contract. The Trustee
shall not be liable, individually or as Trustee, for any action relating to the
determination of whether collateral delivered pursuant to the sentence above
constitutes "Eligible Collateral."

          (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement. The Trustee shall have no duty (A) to record, file or deposit
this Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to undertake any
rerecording, refiling or redepositing, as applicable, thereof, (B) to establish
or maintain any insurance or (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund.


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<PAGE>

          (c) The Trustee is hereby directed to execute and deliver on behalf of
the Trust Fund any letter agreements relating to the MI Policy.

          SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.

          The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of this Agreement, of any Mortgage Loan, or of any
related document other than with respect to the execution and authentication of
the Certificates, if the Trustee executed or authorized the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor or
the Servicer of any funds paid to the Depositor or the Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Collection Account or
the Certificate Account by the Depositor or the Servicer.

          SECTION 8.04. Trustee May Own Certificates.

          The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it was
not the Trustee.

          SECTION 8.05. Trustee's Fees and Expenses.

          The Trustee shall be entitled to compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the trusts
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee.

          SECTION 8.06. Indemnification and Expenses of Trustee.

          (a) The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Trust Fund for any loss,
liability or expense incurred in connection with (i) any audit, controversy or
judicial proceeding relating to a governmental authority or any legal proceeding
incurred without negligence or willful misconduct on their part, arising out of,
or in connection with the acceptance or administration of the trusts created
hereunder and (ii) the performance of their respective duties hereunder,
including any applicable fees and expenses payable hereunder, and the costs and
expenses of defending themselves against any claim in connection with the
exercise or performance of any of their powers or duties hereunder, provided
that:

               (i) with respect to any such claim, the Trustee shall have given
the Depositor written notice thereof promptly after the Trustee shall have
knowledge thereof; provided that failure to so notify shall not relieve the
Trust Fund of the obligation to indemnify the Trustee; however, any reasonable
delay by the Trustee to provide written notice to the Depositor and the Holders
promptly after the Trustee shall have obtained knowledge of a claim shall not
relieve the Trust Fund of the obligation to indemnify the Trustee under this
Section 8.06;

               (ii) while maintaining control over its own defense, the Trustee
shall reasonably cooperate and consult with the Depositor in preparing such
defense;

               (iii) notwithstanding anything to the contrary in this Section
8.06, the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld or delayed; and


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<PAGE>

               (iv) indemnification therefor would constitute "unanticipated
expenses" within the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii).

          The provisions of this Section 8.06 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense under
any environmental law.

          (b) The Trustee shall be entitled to all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
this Agreement (including fees and expenses of its counsel and all persons not
regularly in its employment), except any such expenses, disbursements and
advances that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).

          (c) The Trustee's right to indemnification and reimbursement shall be
subject to a cap of $300,000 in the aggregate in any calendar year, excluding
(i) any Servicing Transfer Costs and (ii) any costs, damages or expenses
incurred by the Trustee in connection with any "high cost" home loans or any
predatory or abusive lending laws, which amounts shall in no case be subject to
any such limitation; provided, however, that such cap shall apply only if NIM
Notes have been issued and shall cease to apply after the date on which any NIM
Notes are paid in full; provided further, however, that amounts incurred by the
Trustee in excess of such annual limit in any calendar year shall be payable to
the Trustee in succeeding calendar years, subject to such annual limit for each
applicable calendar year. Any amounts reimbursable hereunder not in excess of
this cap may be withdrawn by the Trustee from the Certificate Account at any
time.

          SECTION 8.07. Eligibility Requirements for Trustee.

          The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust powers
having a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.07 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor and its respective Affiliates; provided,
however, that such corporation cannot be an Affiliate of the Servicer other than
the Trustee in its role as successor to the Servicer.

          SECTION 8.08. Resignation and Removal of Trustee.

          The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor by
mailing notice of resignation by first class mail, postage prepaid, to the
Certificateholders at their addresses appearing on the Certificate Register and
each Rating Agency, not less than 60 days before the date specified in such
notice when, subject to Section 8.09, such resignation is to take effect, and
(2) acceptance of appointment by a successor trustee


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<PAGE>

in accordance with Section 8.09 and meeting the qualifications set forth in
Section 8.07. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.

          If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.07 hereof and shall fail to resign
after written request thereto by the Depositor or (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and shall promptly appoint a successor trustee
by written instrument, in triplicate, one copy of which instrument shall be
delivered to the Trustee, one copy of which shall be delivered to the Servicer
and one copy of which shall be delivered to the successor trustee.

          The Holders evidencing at least 51% of the Voting Rights of all
Classes of Certificates, upon failure of the Trustee to perform its obligations
hereunder, may at any time remove the Trustee and the Depositor shall appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered by the successor trustee to the Trustee so
removed and one complete set to the successor so appointed. Notice of any
removal of the Trustee shall be given to each Rating Agency by the successor
trustee.

          Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.09 hereof.

          SECTION 8.09. Successor Trustee.

          Any successor trustee appointed as provided in Section 8.08 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.

          No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.

          Upon acceptance of appointment by a successor trustee as provided in
this Section 8.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.


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<PAGE>

          SECTION 8.10. Merger or Consolidation of Trustee.

          Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).

          SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.

          Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.11, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be compensated by the Trust Fund and
subject to the written approval of the Servicer. The Trustee shall not be liable
for the actions of any co-trustee appointed with due care; provided that the
appointment of a co-trustee shall not relieve the Trustee of its obligations
hereunder. If the Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request to do so, or in the case an Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.07 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 8.09.

          Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:

               (i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;

               (ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and

               (iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.


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<PAGE>

          Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.

          Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

          SECTION 8.12. Tax Matters.

          (a) It is intended that each of the REMICs provided for herein REMIC
shall constitute, and that the affairs of the Trust Fund shall be conducted so
as to allow each such REMIC to qualify as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf of
each of the REMICs provided for herein and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, in a timely manner, a U.S.
Real Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file or
cause to be prepared and filed with the Internal Revenue Service and applicable
state or local tax authorities income tax or information returns for each
taxable year with respect to each of the REMICs provided for herein, containing
such information and at the times and in the manner as may be required by the
Code or state or local tax laws, regulations, or rules, and furnish or cause to
be furnished to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby; (b) within thirty days
of the Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code for each of
the REMICs provided for herein; (c) make or cause to be made elections, on
behalf of each of the REMICs provided for herein to be treated as a REMIC on the
federal tax return of such REMICs for their first taxable years (and, if
necessary, under applicable state law); (d) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Person that is not a Permitted Transferee, or a
pass through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of each of the REMICs
provided for herein at all times that any Certificates are outstanding so as to
maintain the status of each of the REMICs provided for herein as a REMIC under
the REMIC Provisions; (g) not knowingly or


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<PAGE>

intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of tax upon any such REMIC; (h) pay, from the sources
specified in the last paragraph of this Section 8.12, the amount of any federal,
state and local taxes, including prohibited transaction taxes as described
below, imposed on each of the REMICs provided for herein prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
or local income tax or information returns; (j) maintain records relating to
each of the REMICs provided for herein, including but not limited to the income,
expenses, assets and liabilities of each of the REMICs provided for herein, and
the fair market value and adjusted basis of the Trust Fund property determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent each of the REMICs provided for herein in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.

          In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby agrees to indemnify the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.

          In the event that any tax is imposed on "prohibited transactions" of
any of the REMICs provided for herein as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of the any of such REMICs as
defined in Section 860G(c) of the Code, on any contribution to the Trust Fund
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed, if not paid as otherwise provided for herein, such tax shall be paid
by (i) the Trustee, if any such other tax arises out of or results from a breach
by the Trustee of any of its obligations under this Agreement or as a result of
the location of the Trustee, (ii) any party hereto (other than the Trustee) to
the extent any such other tax arises out of or results from a breach by such
other party of any of its obligations under this Agreement or as a result of the
location of such other party or (iii) in all other cases, or in the event that
any liable party here fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid first with amounts (other than amounts
received by the Trust Fund as a payment on the Cap Contract or amounts received
by the Supplemental Interest Trust as a payment on the Swap Agreement) otherwise
to be distributed to the Class R Certificateholders (pro rata) pursuant to
Section 4.04, and second with amounts otherwise to be distributed to all other
Certificateholders in the following order of priority (other than amounts
received by the Supplemental Interest Trust as a payment on the Swap Agreement):
first, to the Class C Certificates (pro rata), second to the Class B-3
Certificates (pro rata), third to the Class B-2 Certificates (pro rata), fourth,
to the Class B-1 Certificates (pro rata), fifth, to the Class M-6 Certificates
(pro rata), sixth to the Class M-5 Certificates (pro rata), seventh to the Class
M-4 Certificates (pro rata), eighth to the Class M-3 Certificates (pro rata),
ninth to the Class M-2


                                      -120-

<PAGE>

Certificates (pro rata), tenth to the Class M-1 Certificates (pro rata), and
eleventh to the Class A Certificates (pro rata). Notwithstanding anything to the
contrary contained herein, to the extent that such tax is payable by the Class R
Certificate, the Trustee is hereby authorized pursuant to such instruction to
retain on any Distribution Date, from the Holders of the Class R Certificate
(and, if necessary, from the Holders of all other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Trustee agrees to promptly
notify in writing the party liable for any such tax of the amount thereof and
the due date for the payment thereof.

          (b) Each of the Depositor and the Trustee agrees not to knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.

                                   ARTICLE IX
                                   TERMINATION

          SECTION 9.01. Termination upon Liquidation or Repurchase of all
     Mortgage Loans.

          (a) Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) an Optional Termination and
(b) the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Joseph P. Kennedy, the late Ambassador of the United States
to the Court of St. James's, living on the date hereof and (ii) the Latest
Possible Maturity Date.

          (b) On or before the Determination Date following the Initial Optional
Termination Date, the Trustee shall attempt to terminate the Trust Fund by
conducting an auction of all of the Mortgage Loans and REO Properties via a
solicitation of bids from at least three (3) bidders, each of which shall be a
nationally recognized participant in mortgage finance (the "Auction"). In
addition, the Trustee will also solicit a bid from each Holder of a Class C
Certificate. The Depositor and the Trustee agree to work in good faith to
develop bid procedures in advance of the Initial Optional Termination Date to
govern the operation of the Auction. The Trustee shall be entitled to retain an
investment banking firm and/or other agents in connection with the Auction, the
cost of which shall be included in the Optional Termination Price (unless an
Optional Termination does not occur in which case such costs shall be an expense
of the Trust Fund). The Trustee shall accept the highest bid received at the
Auction; provided that the amount of such bid equals or exceeds the Optional
Termination Price. The Trustee shall determine the Optional Termination Price
based upon information provided by (i) the Servicer with respect to the amounts
described in clauses (A) and (B) of the definition of "Optional Termination
Price" (other than Trustee expenses), (ii) the Depositor with respect to the
information described in clause (C) of the definition of "Optional Termination
Price." The Trustee may conclusively rely upon the information provided to it in
accordance with the immediately preceding sentence and shall not have any
liability for the failure of any party to provide such information.

          If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the Servicer may, on any
Distribution Date following such Auction, at its


                                      -121-

<PAGE>

option, terminate the Trust Fund by purchasing all of the Mortgage Loans and REO
Properties at a price equal to the Optional Termination Price. In the event that
the Auction fails to achieve the Optional Termination Price, the Servicer may,
on the first Distribution Date following such Auction, at its option, terminate
the Trust Fund by purchasing all of the Mortgage Loans and REO Properties at a
price equal to the Optional Termination Price. In connection with such
termination, the Optional Termination Price shall be delivered to the Trustee no
later than the Business Day immediately preceding the related Distribution Date.
Notwithstanding anything to the contrary herein, the Optional Termination Amount
paid to the Trustee by the winning bidder at the Auction or by the Servicer
shall be deposited by the Trustee directly into the Certificate Account
immediately upon receipt. Upon any termination as a result of an Auction, the
Trustee shall, out of the Optional Termination Amount deposited into the
Certificate Account, (x) reimburse the Trustee for its costs and expenses
necessary to conduct the Auction and any other unreimbursed amounts owing to it
and (y) pay to the Servicer, the aggregate amount of any unreimbursed
out-of-pocket costs and expenses owed to the Servicer and any unpaid or
unreimbursed Servicing Fees, Advances and Servicing Advances.

          (c) Notwithstanding anything to the contrary in clause (b) above, in
the event that the Trustee receives the written opinion of a nationally
recognized participant in mortgage finance acceptable to the Sellers that the
Mortgage Loans and REO Properties to be included in the Auction will not be
saleable at a price sufficient to achieve the Optional Termination Price, the
Trustee need not conduct the Auction. In such event, the Servicer shall have the
option to purchase the Mortgage Loans and REO Properties at the Optional
Termination Price as of the Initial Optional Termination Date.

          SECTION 9.02. Final Distribution on the Certificates.

          If on any Determination Date, (i) the Trustee determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder or (ii) the Trustee
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the Certificateholders
within seven (7) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the Certificates at the office of the Trustee
specified in such notice.

          Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed no later than the last
calendar day of the month immediately preceding the month of such final
distribution (or with respect to an Auction, mailed no later than one Business
Day following completion of such Auction). Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the location of the office or agency at which such presentation
and surrender must be made, and (c) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Trustee will give such notice to each Rating Agency at the time such notice
is given to Certificateholders.

          In the event such notice is given, the Servicer shall cause all funds
in the Collection Account to be deposited in the Certificate Account on the
Business Day prior to the applicable Distribution Date in an amount equal to the
final distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund, certification to the Trustee that such required
amount has


                                      -122-

<PAGE>

been deposited in the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee (or its custodian) shall promptly release the
Mortgage Files for the Mortgage Loans.

          Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

          In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholders of such
funds and assets, the Trustee shall have no further duties or obligations with
respect thereto.

          SECTION 9.03. Additional Termination Requirements.

          (a) In the event the Trustee or the Servicer completes an Optional
Termination as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of the Trustee or the
Servicer, as applicable to the effect that the failure of the Trust Fund to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on "prohibited transactions" of any of the REMICs provided
for herein as defined in Section 860F of the Code, or (ii) cause any of the
REMICs provided for herein to fail to qualify as a REMIC at any time that any
Certificates are outstanding:

               (i) The Depositor shall establish a 90-day liquidation period and
notify the Trustee thereof, and the Trustee shall in turn specify the first day
of such period in a statement attached to the final tax returns of each of the
REMICs provided for herein pursuant to Treasury Regulation Section 1.860F-1. The
Depositor shall satisfy all the requirements of a qualified liquidation under
Section 860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Servicer;

               (ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Depositor as agent
of the Trustee shall sell all of the assets of the Trust Fund for cash; and

               (iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class R Certificateholders all cash on hand (other than cash
retained to meet outstanding claims), and the Trust Fund shall terminate at that
time, whereupon the Trustee shall have no further duties or obligations with
respect to sums distributed or credited to the Class R Certificateholders.


                                      -123-

<PAGE>

          (b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Depositor to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.

          (c) The Trustee as agent for each REMIC hereby agrees, upon the
written request of the Depositor, to adopt and sign such a plan of complete
liquidation prepared and delivered to it by Depositor and the receipt of the
Opinion of Counsel referred to in Section 9.03(a) and to take such other action
in connection therewith as may be reasonably requested by the Depositor.

          (d) Notwithstanding any other terms of this Agreement, prior to any
termination of the Trust Fund, the Servicer may prepare a reconciliation of all
Advances and Servicing Advances made by it for which it has not been reimbursed
and a reasonable estimate of all additional Servicing Advances and other costs
for which it would be entitled to be reimbursed if the Trust Fund were not being
terminated, including without limitation, any Servicing Advances and other costs
arising under Section 6.03 (Limitation on Liability of the Depositor, the
Servicer and Others), and the Servicer may recover these Advances, Servicing
Advances and estimated Servicing Advances and other costs from the Collection
Account (to the extent that such recovery of Servicing Advances, estimated
Servicing Advances and other costs constitutes "unanticipated expenses" within
the meaning of Treasury Regulation Section 1.860G-1(b)(3)(ii)).

          (e) Notwithstanding any other terms of this Agreement, unless the
Servicer previously has notified the Trustee that it has entered into a
servicing agreement for the servicing after the termination date of the Trust
Fund assets, at least 20 days prior to any termination of the Trust Fund, the
Trustee or the Depositor shall notify the Servicer in writing to transfer the
assets of the Trust Fund as of the termination date to the person specified in
the notice, or if such person is not then known, to continue servicing the
assets until the date that is 20 days after the termination date and on the
termination date, the Trustee or the Depositor shall notify the Servicer of the
person to whom the assets should be transferred on that date. In the latter
event the Servicer shall be entitled to recover its servicing fee and any
advances made for the interim servicing period from the collections on the
assets which have been purchased from the Trust and the new owner of the assets,
and the agreements for the new owner to obtain ownership of the assets of the
Trust Fund shall so provide.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

          SECTION 10.01. Amendment.

          This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee and without the consent of any of the
Certificateholders to,

               (i) to cure any ambiguity or correct any mistake,

               (ii) to correct, modify or supplement any provision therein which
may be inconsistent with any other provision herein,

               (iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or

               (iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement, provided, however, that, in the case
of clauses (iii) and (iv), such


                                      -124-

<PAGE>

amendment will not, as evidenced by an Opinion of Counsel to such effect,
adversely affect in any material respect the interests of any Holder; provided,
further, however, that such amendment will be deemed to not adversely affect in
any material respect the interest of any Holder if the Person requesting such
amendment obtains a letter from each Rating Agency stating that such amendment
will not result in a reduction or withdrawal of its rating of any Class of the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating.

          Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicer and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for herein pursuant to the Code that would be
a claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee shall have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.

          This Agreement may also be amended from time to time by the Depositor,
the Servicer, the Trustee and the Holders of the Certificates affected thereby
evidencing not less than 66 2/3% of the Voting Rights, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66
2/3% or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.

          Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.

          Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee or upon the written
request of the Trustee to the Servicer, the Servicer shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.

          It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

          Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is


                                     -125-

<PAGE>

not prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.

          The Trustee may, but shall not be obligated to, enter into any
supplement, modification or waiver which affects its rights, duties or
obligations hereunder.

          SECTION 10.02. Counterparts.

          This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.

          SECTION 10.03. Governing Law.

          THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

          SECTION 10.04. Intention of Parties.

          It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.

          The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

          SECTION 10.05. Notices.

          (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:


                                     -126-

<PAGE>

               (i) Any material change or amendment to this Agreement;

               (ii) The occurrence of any Event of Default that has not been
cured;

               (iii) The resignation or termination of the Trustee or the
Servicer and the appointment of any successor;

               (iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03 and 3.12;

               (v) The final payment to Certificateholders; and

               (vi) Any change in the location of the Certificate Account.

          (b) The Trustee shall promptly furnish or make available to each
Rating Agency copies of the following:

               (i) Each report to Certificateholders described in Section 4.05;

               (ii) Each annual statement as to compliance described in Section
3.17; and

               (iii) Each annual independent public accountants' servicing
report described in Section 3.18.

          All directions, demands and notices hereunder shall be in writing and
     shall be deemed to have been duly given when delivered to (a) in the case
     of the Depositor, Merrill Lynch Mortgage Investors, Inc. 250 Vesey Street,
     4 World Financial Center, 10th Floor, New York, New York 10080, Attention:
     Asset-Backed Finance; (b) in the case of the Rating Agencies, (i) Standard
     & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.,
     55 Water Street, New York, New York 10041; and (ii) Fitch, Inc., One State
     Street Plaza, New York, New York 10041; (c) in the case of the Servicer,
     Wilshire Credit Corporation, 14523 S.W. Millikan Way, Suite 200, Beaverton,
     Oregon 97005, Attention: V.P. Client Relations; (d) in the case of the
     Trustee, Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia,
     Maryland 21045, Attention: Client Services Manager - Merrill Lynch Mortgage
     Investors Trust, Series 2005-HE2; (e) in the case of the MI Insurer, PMI
     Mortgage Insurance Co., 3003 Oak Road, Walnut Creek, California 94597,
     Attention: Secondary Market Operations; (f) in the case of the Cap Contract
     Counterparty, The Bank of New York, 32 Old Slip, 15th Floor, New York, New
     York 10286, Attention: Stephen Lawler/Andrew Schwartz; (g) in the case of
     the Swap Counterparty, The Bank of New York, 32 Old Slip, 15th Floor, New
     York, New York 10286, Attention: Stephen Lawler/Andrew Schwartz; and in the
     case of any of the foregoing persons, such other addresses as may hereafter
     be furnished by any such persons to the other parties to this Agreement.
     Notices to Certificateholders shall be deemed given when mailed, first
     class postage prepaid, to their respective addresses appearing in the
     Certificate Register.

          SECTION 10.06. Severability of Provisions.

          If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.


                                     -127-

<PAGE>

          SECTION 10.07. Assignment.

          Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of Trustee and the Depositor;
provided, however, the Servicer is hereby authorized to enter into an Advance
Facility under which (l) the Servicer sells, assigns or pledges to an Advancing
Person the Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. No consent of the Trustee, Certificateholders or any
other party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility.

          Reimbursement amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s).

          The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan by loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.

          An Advancing Person who purchases or receives an assignment or pledge
of the rights to be reimbursed for Advances and/or Servicing Advances, and/or
whose obligations hereunder are limited to the funding of Advances and/or
Servicing Advances shall not be required to meet the criteria for qualification
of a Subservicer set forth in this Agreement.

          The documentation establishing any Advance Facility shall require that
such reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan by loan information with
respect to each such reimbursement amount distributed to such Advancing Person
or Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each such
reimbursement amount with respect to each Mortgage Loan. The Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
trustee for all Advances and Servicing Advances funded by the Servicer to the
extent the related rights to be reimbursed therefor have not been sold, assigned
or pledged to an Advancing Person.

          Any amendment to this Section 10.07 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 10.07, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee and the Servicer, without the consent of any Certificateholder
notwithstanding anything to the contrary in this Agreement, upon receipt by the
Trustee of an Opinion of Counsel that such amendment has no material adverse
effect on the Certificateholders or written confirmation from the Rating
Agencies that such amendment will not adversely affect the ratings on the
Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to the


                                     -128-

<PAGE>

Servicer on a non recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Trustee and the Trust Fund are not otherwise obligated
or liable to repay any Advances financed by the lender; (b) the Servicer will be
responsible for remitting to the lender the applicable amounts collected by it
as reimbursement for Advances funded by the lender, subject to the restrictions
and priorities created in this Agreement; and (c) the Trustee shall not have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.

          SECTION 10.08. Limitation on Rights of Certificateholders.

          The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

          No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

          No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such indemnity satisfactory to
it as it may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

          SECTION 10.09. Inspection and Audit Rights.

          The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision the Servicer hereby authorizes such accountants to discuss with such
representative such


                                     -129-

<PAGE>

affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense incident to the exercise
by the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection (except in the case of the Trustee
in which case such expenses shall be borne by the requesting
Certificateholder(s)); all other such expenses shall be borne by the Servicer.

          SECTION 10.10. Certificates Nonassessable and Fully Paid.

          It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

          SECTION 10.11. Third Party Rights.

          The MI Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.


                                     -130-

<PAGE>

          IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.

                                        MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                        as Depositor


                                        By:
                                            ------------------------------------
                                        Name: Matthew Whalen
                                        Title: President


                                        WELLS FARGO BANK, N.A.,
                                        as Trustee


                                        By:
                                            ------------------------------------
                                        Name: Sandra Whalen
                                        Title: Vice President


                                        WILSHIRE CREDIT CORPORATION,
                                        as Servicer


                                        By:
                                            ------------------------------------
                                        Name: Heidi Peterson
                                        Title: Vice President

<PAGE>

                                    EXHIBIT A

                              FORMS OF CERTIFICATES

                             [INTENTIONALLY OMITTED]


                                       A-1

<PAGE>

                                   EXHIBIT B-1

                     MORTGAGE LOAN SCHEDULE - MORTGAGE POOL

                             [INTENTIONALLY OMITTED]


                                      B-1-1

<PAGE>

                                   EXHIBIT B-2

                MORTGAGE LOAN SCHEDULE - GROUP ONE MORTGAGE LOANS

                             [INTENTIONALLY OMITTED]


                                      B-2-1

<PAGE>

                                   EXHIBIT B-3

                MORTGAGE LOAN SCHEDULE - GROUP TWO MORTGAGE LOANS

                             [INTENTIONALLY OMITTED]


                                      B-3-1

<PAGE>

                                    EXHIBIT C

                                   [RESERVED]


                                       C-1

<PAGE>

                                    EXHIBIT D

                         FORM OF CUSTODIAN CERTIFICATION

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wilshire Credit Corporation
14523 S.W. Millikan Way,
Suite 200
Beaverton, Oregon 97005

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045

Re: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

Ladies and Gentlemen:

          In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of November 1, 2005 among Merrill Lynch Mortgage Investors, Inc., as
depositor, Wells Fargo Bank, N.A., as trustee and Wilshire Credit Corporation,
as servicer (the "Pooling and Servicing Agreement"), the undersigned, as
custodian, hereby certifies that [, except as set forth in Schedule A hereto,]
as to each Mortgage Loan listed in the Mortgage Loan Schedule attached hereto
(other than any Mortgage Loan paid in full or listed on the attachment hereto)
it has reviewed the Mortgage File and the Mortgage Loan Schedule and has
determined that:

          (i) All documents in the Mortgage File required to be delivered to the
Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are in
its possession;

          (ii) In connection with each Mortgage Loan or Assignment thereof as to
which documentary evidence of recording was not received on the Closing Date, it
has received evidence of such recording; and

          (iii) Such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan.

          The custodian has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number, the name of the Mortgagor, the street address (excluding zip code), the
mortgage interest rate at origination, the gross margin (if applicable), the
lifetime rate cap (if applicable), the periodic rate cap (if applicable), the
original principal balance, the first payment due date and the original maturity
date in each Mortgage File conform to the respective Mortgage Loan number and
name listed on the Mortgage Loan Schedule and (ii) the existence in each
Mortgage File of each of the documents listed in subparagraphs (i)(A) through
(G), inclusive, of


                                       D-1

<PAGE>

Section 2.01 in the Agreement. The custodian makes no representations or
warranties as to the validity, legality, recordability, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
Loan or the collectability, insurability, effectiveness or suitability of any
such Mortgage Loan.

          Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Pooling and Servicing
Agreement.

                                        WELLS FARGO BANK, N.A.,
                                        as Custodian


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      D-2

<PAGE>

                                   EXHIBIT E-1

                    FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
Series 2005-HE2

Ladies and Gentlemen:

          We propose to purchase Merrill Lynch Mortgage Investors Trust,
Mortgage Loan Asset-Backed Certificates, Series 2005-HE2, Class R, described in
the Prospectus Supplement, dated August 29, 2005, and Prospectus, dated August
26, 2005.

          1. We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.

          2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, and (d) we intend
to pay any taxes associated with holding the Class R Certificate as they become
due and (e) we will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.

          3. We acknowledge that we will be the beneficial owner of the Class R
Certificate and:(1)

          ____ The Class R Certificate will be registered in our name.

          ____ The Class R Certificate will be held in the name of our nominee,
               _________________, which is not a disqualified organization.

----------
(1)  Check appropriate box and if necessary fill in the name of the Transferee's
     nominee.


                                     E-1-1

<PAGE>

          4. We certify that we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Code or a plan subject to
federal, state, local, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code (each, a "Plan"), and are not directly
or indirectly acquiring the Class R Certificate on behalf of or with any assets
of a Plan.

          5. We certify that (i) we are a U.S. person or (ii) we will hold the
Class R Certificate in connection with the conduct of a trade or business within
the United States and have furnished the transferor and the Trustee with a duly
completed and effective Internal Revenue Service Form W-8ECI or successor form
at the time and in the manner required by the Code; for this purpose the term
"U.S. person" means a citizen or resident of the United States, a corporation,
or partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to United States federal income tax regardless
of the source of its income, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more such U.S. persons have the authority to control all substantial
decisions of the trust (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons. We agree that any breach by us of this
certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.

          6. We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificate, we will transfer such interest
in the Class R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us and the Trustee with a
duly completed and effective Internal Revenue Service Form W-8ECI or successor
form at the time and in the manner required by the Code and (iii) has delivered
to the Trustee a letter in the form of this letter (including the affidavit
appended hereto) and, we will provide the Trustee a written statement
substantially in the form of Exhibit E-2 to the Pooling and Servicing Agreement.

          7. We hereby designate _______________________ as our fiduciary to act
as the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement.

                                        Very truly yours,

                                        [PURCHASER]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


Accepted as of __________ __, 200__

MERRILL LYNCH MORTGAGE INVESTORS,
INC.


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


                                     E-1-2

<PAGE>

                                   APPENDIX A

                    Affidavit pursuant to (i) Section 860E(e)(4) of the Internal
          Revenue Code of 1986, as amended, and (ii) certain provisions of the
          Pooling and Servicing Agreement

Under penalties of perjury, the undersigned declares that the following is true:

          1.   He or she is an officer of _________________________ (the
               "Transferee"),

          2.   the Transferee's Employer Identification number is __________,

          3.   the Transferee is not a "disqualified organization" (as defined
               below), has no plan or intention of becoming a disqualified
               organization, and is not acquiring any of its interest in the
               Merrill Lynch Mortgage Investors Trust, Mortgage Loan
               Asset-Backed Certificates, Series 2005-HE2, Class R Certificate
               on behalf of a disqualified organization or any other entity,

          4.   unless Merrill Lynch Mortgage Investors, Inc.("MLMI") has
               consented to the transfer to the Transferee by executing the form
               of Consent affixed as Appendix B to the Transferee's Letter to
               which this Certificate is affixed as Appendix A, the Transferee
               is a "U.S. person" (as defined below),

          5.   that no purpose of the transfer is to avoid or impede the
               assessment or collection of tax,

          6.   the Transferee has historically paid its debts as they became
               due,

          7.   the Transferee intends, and believes that it will be able, to
               continue to pay its debts as they become due in the future,

          8.   the Transferee understands that, as beneficial owner of the Class
               R Certificate, it may incur tax liabilities in excess of any cash
               flows generated by the Class R Certificate,

          9.   the Transferee intends to pay any taxes associated with holding
               the Class R Certificate as they become due,

          10.  the Transferee consents to any amendment of the Pooling and
               Servicing Agreement that shall be deemed necessary by MLMI (upon
               advice of counsel) to constitute a reasonable arrangement to
               ensure that the Class R Certificate will not be owned directly or
               indirectly by a disqualified organization, and

          11.  IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
               transfer is not a direct or indirect transfer of the Class R
               Certificate to a foreign permanent establishment or fixed base
               (within the meaning of an applicable income tax treaty) of the
               Transferee, and as to each of the residual interests represented
               by the Class R Certificate, the present value of the anticipated
               tax liabilities associated with holding such residual interest
               does not exceed the sum of:


                                      E-1-3

<PAGE>

          12.  the present value of any consideration given to the Transferee to
               acquire such residual interest;

          13.  the present value of the expected future distributions on such
               residual interest; and

          14.  the present value of the anticipated tax savings associated with
               holding such residual interest as the related REMIC generates
               losses.

          For purposes of this declaration, (i) the Transferee is assumed to pay
          tax at a rate equal to the highest rate of tax specified in Section
          11(b)(1) of the Code, but the tax rate specified in Section
          55(b)(1)(B) of the Code may be used in lieu of the highest rate
          specified in Section 11(b)(1) of the Code if the Transferee has been
          subject to the alternative minimum tax under Section 55 of the Code in
          the preceding two years and will compute its taxable income in the
          current taxable year using the alternative minimum tax rate, and (ii)
          present values are computed using a discount rate equal to the Federal
          short-term rate prescribed by Section 1274(d) of the Code for the
          month of the transfer and the compounding period used by the
          Transferee;]

[(11)(A)  at the time of the transfer, and at the close of each of the
          Transferee's two fiscal years preceding the Transferee's fiscal year
          of transfer, the Transferee's gross assets for financial reporting
          purposes exceed $100 million and its net assets for financial
          reporting purposes exceed $10 million; and

     (B)  the Transferee is an eligible corporation as defined in Treasury
          regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
          any subsequent transfer of the Class R Certificate will be to another
          eligible corporation in a transaction that satisfies Treasury
          regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
          1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be a
          direct or indirect transfer to a foreign permanent establishment
          (within the meaning of an applicable income tax treaty) of a domestic
          corporation.

For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]

(12) The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.


                                      E-1-4

<PAGE>

For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).

_____________________________________


By:
    ---------------------------------

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

Address of Investor for receipt of distribution:

Address of Investor for receipt of tax information:

(Corporate Seal)

Attest:

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

-------------------------------------, Secretary


                                      E-1-5

<PAGE>

Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.

Subscribed and sworn before me this day of _________, 200_.


-------------------------------------
Notary Public

County of ___________________________

State of ____________________________

My commission expires the ________ day of ______________


                                     By:
                                         ---------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                            ------------------------------------

Dated: ____________


                                      E-1-6

<PAGE>

                                   EXHIBIT E-2

                         FORM OF TRANSFEROR'S AFFIDAVIT

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
           Series 2005-HE2

Re: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

          _______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.

                                     Very truly yours,


                                     -------------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                            ------------------------------------


                                      E-2-1

<PAGE>

                                    EXHIBIT F

                         FORM OF TRANSFEROR CERTIFICATE

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
           Series 2005-HE2

RE: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

Ladies and Gentlemen:

          In connection with our disposition of the Class [____] Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of November 1,
2005, among Merrill Lynch Mortgage Investors, Inc., as depositor, Wells Fargo
Bank, N.A., as trustee and Wilshire Credit Corporation, as servicer.

                                     Very truly yours,


                                     -------------------------------------------
                                     Name of Transferor


                                     By:
                                         ---------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title
                                           -------------------------------------


                                       F-1

<PAGE>

                                    EXHIBIT G

                            FORM OF INVESTMENT LETTER
                              (ACCREDITED INVESTOR)

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
           Series 2005-HE2

Re: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

Ladies and Gentlemen:

          ______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-HE2, Class [____] (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement, dated as
of November 1, 2005 (the "Pooling and Servicing Agreement"), among Merrill Lynch
Mortgage Investors, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A.
as trustee (the "Trustee") and Wilshire Credit Corporation, as servicer (the
"Servicer"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.

          For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

          1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.

          2. The Certificates will bear a legend to the following effect:

          THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS
          AMENDED (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS,
          AND MAY NOT, DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED,
          OR OFFERED FOR SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO
          REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
          SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES


                                       G-1

<PAGE>

          WITH THE OTHER PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
          AGREEMENT. NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
          TRUSTEE SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE
          TRUSTEE (A) AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND
          (B) REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND
          SALE OF THE CERTIFICATES.

          3. All Certificates other than ERISA Restricted Certificates and Class
R Certificates will bear a legend to the following effect:

          UNTIL THE TERMINATION OF THE INTEREST RATE SWAP AGREEMENT, EACH
          TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO REPRESENT (OR IN THE
          CASE OF A DEFINITIVE CERTIFICATE, SHALL REPRESENT) TO THE TRUSTEE THAT
          (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING FOR, ON BEHALF OF OR
          WITH ANY ASSETS OF, ANY EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT
          SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
          1974, AS AMENDED ("ERISA"), OR ANY PLAN SUBJECT TO SECTION 4975 OF THE
          INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) THE
          TRANSFEREE'S ACQUISITION AND HOLDING OF THIS CERTIFICATE IS COVERED BY
          AND EXEMPT UNDER ANY OF PROHIBITED TRANSACTION CLASS EXEMPTION
          ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, EACH AS
          AMENDED.

          4. The ERISA Restricted Certificates will bear a legend to the
following effect:

          NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE HAS
          RECEIVED (A) A REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
          BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION
          4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR
          A PLAN SUBJECT TO STATE, LOCAL, FEDERAL, NON-U.S. OR OTHER LAW
          SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
          ("SIMILAR LAW"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
          CERTIFICATE BY, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B)
          IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
          UNDERWRITING, A REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE
          COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
          COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
          TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND
          HOLDING OF THE


                                       G-2

<PAGE>

          CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE
          95-60 (IN THE CASE OF ANY ERISA RESTRICTED CERTIFICATE OTHER THAN
          CLASS C CERTIFICATES OR CLASS P CERTIFICATES, AFTER THE TERMINATION OF
          THE SWAP AGREEMENT), OR (C) SOLELY IN THE CASE OF A DEFINITIVE
          CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE, AND
          UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT
          THE ACQUISITION AND HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE
          TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED
          TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE OR A
          VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE
          SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE
          UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT,
          WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
          SERVICER OR THE DEPOSITOR. IF THE CERTIFICATE IS NOT A DEFINITIVE
          CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION
          IN (A) OR (B) ABOVE.

          5. The Class R Certificate will bear a legend to the following effect:

          UNTIL THE TERMINATION OF THE INTEREST RATE SWAP AGREEMENT, NO TRANSFER
          OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
          TRANSFEREE PROVIDES THE TRUSTEE WITH A REPRESENTATION THAT SUCH
          TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
          EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
          A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE,
          LOCAL, FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE
          FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW"), AND IS NOT
          DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE BY, ON BEHALF OF, OR
          WITH ANY ASSETS OF ANY SUCH PLAN.

          6. The Purchaser is acquiring the Transferred Certificates for its own
account [FOR INVESTMENT ONLY]* and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.

          7. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment

----------
*    Not required of a broker/dealer purchaser.


                                       G-3

<PAGE>

in the Certificates, (b) is able to bear the economic risks of such an
investment and (c) is an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the Securities Act.

          8. The Purchaser will not nor has it authorized nor will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.

          9. Either (i) the Purchaser of a Certificate that is neither an ERISA
Restricted Certificate nor a Class R Certificate is not, and is not acting for,
on behalf of or with any assets of, an employee benefit plan or other
arrangement subject to Title I of ERISA or plan subject to Section 4975 of the
Code, or (ii) until the termination of the Swap Agreement, such Purchaser's
acquisition and holding of such Certificates are eligible for exemptive relief
under Prohibited Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE
91-38, PTCE 95-60 or PTCE 96-23.

          10. The Purchaser of an ERISA Restricted Certificate (A) is not an
employee benefit plan subject to Title I of ERISA, a plan subject to Section
4975 of the Code, a plan subject to any state, local, federal, non-U.S. or other
law substantively similar to the foregoing provisions of ERISA or the Code
("Similar Law") and is not directly or indirectly acquiring such Certificates
by, on behalf of, or with any assets of any such plan, or (B) if the Certificate
has been the subject of an ERISA-Qualifying Underwriting, is an insurance
company that is acquiring the Certificate with assets of an "insurance company
general account," as defined in Section V(e) of Prohibited Transaction Class
Exemption ("PTCE") 95-60, and the acquisition and holding of the Certificate are
covered and exempt under Sections I and III of PTCE 95-60 (in the case of any
ERISA Restricted Certificate other than Class C Certificates or Class P
Certificates, after the termination of the Swap Agreement), or (C) solely in the
event the Certificate is a Definitive Certificate, herewith delivers an Opinion
of Counsel satisfactory to the Trustee, and upon which the Trustee shall be
entitled to rely, to the effect that the acquisition and holding of the
Certificate will not constitute or result in a nonexempt prohibited transaction
under Title I of ERISA or Section 4975 of the Code, or a violation of Similar
Law, and will not subject the Trustee, the Servicer or the Depositor to any
obligation in addition to those expressly undertaken in the Pooling and
Servicing Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the Servicer or the Depositor.

          11. The Purchaser of a Class R Certificate is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code, a
plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law"), or a
Person directly or indirectly acquiring such Certificate by, on behalf of, or
with any assets of any such plan.

          12. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications,


                                       G-4

<PAGE>

representations, warranties and covenants contained in the foregoing paragraphs
and in this letter or a letter substantially in the form of Exhibit H to the
Pooling and Servicing Agreement.

          13. The Purchaser agrees to indemnify the Trustee, the Servicer and
the Depositor against any liability that may result from any misrepresentation
made herein.

                                     Very truly yours,

                                     [PURCHASER]


                                     By:
                                         ---------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                            ------------------------------------


                                       G-5

<PAGE>

                                    EXHIBIT H

                       FORM OF RULE 144A INVESTMENT LETTER
                         (QUALIFIED INSTITUTIONAL BUYER)

                                     [DATE]

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
           Series 2005-HE2

Re: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

Ladies and Gentlemen:

          ______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Merrill Lynch Mortgage Investors Trust, Mortgage
Loan Asset-Backed Certificates, Series 2005-HE2, Class [____] (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement, dated as
of November 1, 2005 (the "Pooling and Servicing Agreement"), among Merrill Lynch
Mortgage Investors, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A.
as trustee (the "Trustee"), Wilshire Credit Corporation, as servicer (the
"Servicer"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.

          For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

In connection with our acquisition of the above Transferred Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) solely with respect to
ERISA Restricted Certificates, (A) we are not an employee benefit plan subject
to Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code"), a plan subject to any state, local, federal, non-U.S.
or other law substantively similar to the foregoing provisions of ERISA or the
Code ("Similar Law"), or Persons directly or indirectly acting on behalf of or
using any assets of any such plan, or (B) if the Certificate has been the
subject of an ERISA-Qualifying Underwriting, we are an insurance company that is
acquiring the Certificate with assets of an "insurance company general account,"
as defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60, and the acquisition and holding of the Certificate are covered and exempt
under Sections I and III of PTCE 95-60 (in the case of any ERISA Restricted
Certificate other than Class C Certificates or Class P Certificates, after the
termination of the Swap Agreement), or (C) solely in the event the Certificate
is a Definitive Certificate,


                                       H-1

<PAGE>

we will herewith deliver an Opinion of Counsel satisfactory to the Trustee, and
upon which the Trustee shall be entitled to rely, to the effect that the
acquisition and holding of the Certificate will not constitute or result in a
nonexempt prohibited transaction under Title I of ERISA or Section 4975 of the
Code, or a violation of Similar Law, and will not subject the Trustee, the
Servicer or the Depositor to any obligation in addition to those expressly
undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Servicer or the Depositor, (e) in
the case of a Certificate other than an ERISA Restricted Certificate or Class R
Certificate, either (i) we are not, and are not acquiring the Certificate for,
on behalf of or with any assets of, any employee benefit plan or other
arrangement subject to Title I of ERISA or any plan subject to Section 4975 of
the Code, or (ii) until the termination of the Swap Agreement, our acquisition
and holding of the Certificate is covered by and exempt under any of Prohibited
Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60,
or PTCE 96-23, (f) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates and (g) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed one of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale of the Transferred Certificates to us is being made in
reliance on Rule 144A. We are acquiring the Transferred Certificates for our own
account or for resale pursuant to Rule 144A and further understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.

          We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.

                                     Very truly yours,

                                     [PURCHASER]


                                     By:
                                         ---------------------------------------
                                     Name:
                                           -------------------------------------
                                     Title:
                                            ------------------------------------


                                       H-2

<PAGE>

                                                                         ANNEX 1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

          2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.

          ____ Corporation, etc. The Buyer is a corporation (other than a bank,
               savings and loan association or similar institution),
               Massachusetts or similar business trust, partnership, or
               charitable organization described in Section 501(c)(3) of the
               Internal Revenue Code of 1986, as amended.

          ____ Bank. The Buyer (a) is a national bank or banking institution
               organized under the laws of any State, territory or the District
               of Columbia, the business of which is substantially confined to
               banking and is supervised by Federal, State or territorial
               banking commission or similar official or is a foreign bank or
               equivalent institution, and (b) has an audited net worth of at
               least $25,000,000 as demonstrated in its latest annual financial
               statements, a copy of which is attached hereto.

          ____ Savings and Loan. The Buyer (a) is a savings and loan
               association, building and loan association, cooperative bank,
               homestead association or similar institution, which is supervised
               and examined by a State or Federal authority having supervision
               over such institution or is a foreign savings and loan
               association or equivalent institution and (b) has an audited net
               worth of at least $25,000,000 as demonstrated in its latest
               annual financial statements, a copy of which is attached hereto.

          ____ Broker-dealer. The Buyer is a dealer registered pursuant to
               Section 15 of the Securities Exchange Act of 1934, as amended.

----------
*    Buyer must own and/or invest on a discretionary basis at least $100,000,000
     in securities unless Buyer is a dealer, and, in that case, Buyer must own
     and/or invest on a discretionary basis at least $10,000,000 in securities.


                                       H-3

<PAGE>

          ____ Insurance Company. The Buyer is an insurance company whose
               primary and predominant business activity is the writing of
               insurance or the reinsuring of risks underwritten by insurance
               companies and which is subject to supervision by the insurance
               commissioner or a similar official or agency of the State,
               territory or the District of Columbia.

          ____ State or Local Plan. The Buyer is a plan established and
               maintained by a State, its political subdivisions, or any agency
               or instrumentality of the State or its political subdivisions,
               for the benefit of its employees.

          ____ ERISA Plan. The Buyer is an employee benefit plan subject to
               Title I of the Employee Retirement Income Security Act of 1974,
               as amended.

          ____ Investment Advisor. The Buyer is an investment advisor registered
               under the Investment Advisors Act of 1940, as amended.

          ____ Small Business Investment Company. Buyer is a small business
               investment company licensed by the U.S. Small Business
               Administration under Section 301(c) or (d) of the Small Business
               Investment Act of 1958, as amended.

          ____ Business Development Company. Buyer is a business development
               company as defined in Section 202(a)(22) of the Investment
               Advisors Act of 1940, as amended.

          3. The term "securities" as used for purposes of the calculation of
the dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.

          4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

          5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.


                                       H-4

<PAGE>

          6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        Date:
                                              ----------------------------------


                                       H-5

<PAGE>

                                                                         ANNEX 2

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

          2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

     ____ The Buyer owned $___________ in securities (other than the excluded
          securities referred to below) as of the end of the Buyer's most recent
          fiscal year (such amount being calculated in accordance with Rule
          144A).

     ____ The Buyer is part of a Family of Investment Companies which owned in
          the aggregate $__________ in securities (other than the excluded
          securities referred to below) as of the end of the Buyer's most recent
          fiscal year (such amount being calculated in accordance with Rule
          144A).

          3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

          4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

          5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to


                                       H-6

<PAGE>

rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.

          6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        IF AN ADVISER:

                                        ----------------------------------------
                                        Print Name of Buyer

                                        Date:
                                              ----------------------------------


                                       H-7

<PAGE>

                                    EXHIBIT I

                           FORM OF REQUEST FOR RELEASE

                                     [DATE]

To: Wells Fargo Bank, N.A.
    1015 10TH Avenue Southeast
    Minneapolis, Minnesota 55414

Re: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

          In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the Pooling and Servicing Agreement dated as of
November 1, 2005 among Merrill Lynch Mortgage Investors, Inc., as depositor,
Wells Fargo Bank, N.A., as trustee and Wilshire Credit Corporation, as servicer
(the "Pooling and Servicing Agreement"), we request the release, and hereby
acknowledge receipt, of the Mortgage File for the Mortgage Loan described below,
for the reason indicated.

Mortgage Loan Number: _______________________________________

Mortgagor Name, Address & Zip Code: _________________________

Reason for Requesting Documents (check one): ________________

_________ 1. Mortgage Paid in Full

_________ 2. Foreclosure

_________ 3. Substitution

_________ 4. Other Liquidation (Repurchases, etc.)

_________ 5. Nonliquidation

_________

Address to which the Custodian should deliver the Mortgage File:


                                        By:
                                            ------------------------------------
                                                     (authorized signer)
                                        Address:
                                                 -------------------------------
                                        Date:
                                              ----------------------------------


                                       I-1

<PAGE>

If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.

If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

Please acknowledge the execution of the above request by your signature and date
below:

WELLS FARGO BANK, N.A.,
as Custodian


By:
    ---------------------------------   ----------------------------------------
    Signature                           Date


Documents returned to Custodian:


By:
    ---------------------------------   ----------------------------------------
    Signature                           Date


                                       I-2

<PAGE>

                                   EXHIBIT J-1

             MLMC LIST OF TRANSFER AGREEMENTS AND BRINGDOWN LETTERS

1.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     September 1, 2004, as amended, between Merrill Lynch Mortgage Capital Inc.,
     as initial purchaser and Acoustic Home Loans, LLC, as seller and interim
     servicer.

2.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     January 1, 2005, between Merrill Lynch Mortgage Capital Inc., as initial
     purchaser and ComUnity Lending, Incorporated, as seller and interim
     servicer.

3.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     August 1, 2004, between Merrill Lynch Mortgage Capital Inc., as initial
     purchaser and Lenders Direct Capital Corporation, as seller and interim
     servicer.

4.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     March 1, 2002, as amended, between Merrill Lynch Mortgage Capital Inc., as
     initial purchaser and New Century Mortgage Corporation, as seller and
     interim servicer.

5.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     January 1, 2004, as amended, between Merrill Lynch Mortgage Capital Inc.,
     as initial purchaser and WMC Mortgage Corp., as seller and interim
     servicer.

6.   Bring Down Letter, dated as of November 30, 2005, by Acoustic Home Loans,
     LLC.

7.   Bring Down Letter, dated as of November 30, 2005, by ComUnity Lending,
     Incorporated.

8.   Bring Down Letter, dated as of November 30, 2005, by Lenders Direct Capital
     Corporation.

9.   Bring Down Letter, dated as of November 30, 2005, by New Century Mortgage
     Corporation.

10.  Bring Down Letter, dated as of November 30, 2005, by WMC Mortgage Corp.


                                      J-1-1

<PAGE>

                                   EXHIBIT J-2

             MLML LIST OF TRANSFER AGREEMENTS AND BRINGDOWN LETTERS

1.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     April 1, 2005, between Merrill Lynch Mortgage Lending, Inc., as initial
     purchaser and Acoustic Home Loans, LLC, as seller and interim servicer.

2.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     June 1, 2005, between Merrill Lynch Mortgage Lending, Inc., as initial
     purchase and The CIT Group, as seller and interim servicer.

3.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     April 1, 2005, between Merrill Lynch Mortgage Lending, Inc., as initial
     purchaser and ComUnity Lending, Incorporated, as seller and interim
     servicer.

4.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     April 1, 2005, between Merrill Lynch Mortgage Lending, Inc., as initial
     purchaser and First Franklin Financial Corporation, as seller and interim
     servicer.

5.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     March 1, 2005, as amended, between Merrill Lynch Mortgage Lending, Inc., as
     initial purchaser and Fremont Investment & Loan, as seller and interim
     servicer.

6.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     May 1, 2005, between Merrill Lynch Mortgage Lending, Inc., as initial
     purchaser and Lenders Direct Capital Corporation, as seller and interim
     servicer.

7.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     June 1, 2005, between Merrill Lynch Mortgage Lending, Inc., as initial
     purchaser and Liberty American Mortgage Corp., as seller and interim
     servicer.

8.   Master Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
     April 1, 2005, between Merrill Lynch Mortgage Lending, Inc., as initial
     purchaser and Lime Financial Services Ltd., as seller and interim servicer.

9.   Bring Down Letter, dated as of November 30, 2005, by Acoustic Home Loans,
     LLC.

10.  Bring Down Letter, dated as of November 30, 2005, by The CIT Group.

11.  Bring Down Letter, dated as of November 30, 2005, by ComUnity Lending,
     Incorporated.

12.  Bring Down Letter, dated as of November 30, 2005, by First Franklin
     Financial Corporation.

13.  Bring Down Letter, dated as of November 30, 2005, by Fremont Investment &
     Loan.

14.  Bring Down Letter, dated as of November 30, 2005, by Lenders Direct Capital
     Corporation.

15.  Bring Down Letter, dated as of November 30, 2005, by Liberty American
     Mortgage Corp.

16.  Bring Down Letter, dated as of November 30, 2005, by Lime Financial
     Services Ltd.


                                      J-2-1

<PAGE>

                                    EXHIBIT K

                    FORM OF OFFICER'S CERTIFICATE OF TRUSTEE

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Re: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

          I, [identify the certifying individual], a [title] of Wells Fargo
Bank, N.A., as Trustee under the Pooling and Servicing Agreement dated as of
November 1, 2005 among Merrill Lynch Mortgage Investors, Inc., as depositor,
Wells Fargo Bank, N.A., as trustee and Wilshire Credit Corporation, as servicer
(the "Agreement"), hereby certify to the Depositor, and its officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:

1.   I have reviewed the Monthly Statements delivered pursuant to the Agreement
     since the last Officer's Certificate executed pursuant to Section 3.21 of
     the Agreement [or in the case of the first certification, since the Cut-off
     Date] (the "Trustee Information").

2.   Based on my knowledge, the information in the Monthly Statement, 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 hereof;

3.   Based on my knowledge, the Monthly Statements required to be prepared by
     the Trustee under the Agreement has been prepared and provided in
     accordance with the Agreement; and

4.   I am responsible for reviewing the activities performed by the Trustee
     under the Agreement and the Trustee has, as of the date hereof fulfilled
     its obligations under the Agreement and there are no significant
     deficiencies relating to the Trustee's compliance with the Agreement.

Date:
      -------------------------------

                                        Wells Fargo Bank, N.A.,
                                        as Trustee


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                       K-1

<PAGE>

                                    EXHIBIT L

                    FORM OF OFFICER'S CERTIFICATE OF SERVICER

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Corporate Trust Services - Merrill Lynch Mortgage Investors Trust,
           Series 2005-HE2

Re: Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
    Certificates, Series 2005-HE2

          I, [identify the certifying individual], an authorized representative
of Wilshire Credit Corporation, as servicer under the Pooling and Servicing
Agreement dated as of November 1, 2005 among Merrill Lynch Mortgage Investors,
Inc., as depositor, Wells Fargo Bank, N.A., as trustee and Wilshire Credit
Corporation, as servicer (the "Agreement"), hereby certify to the Trustee and
the Depositor, and each of their respective officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:

          1. Based on my knowledge, the information in the annual statement of
compliance identified in Section 3.17 of the Agreement, the annual independent
public accountants' report identified in Section 3.18 of the Agreement and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage Loans submitted to the Trustee 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;

          2. The servicing information required to be provided to the Trustee by
the Servicer under the Agreement has been provided to the Trustee;

          3. I am responsible for reviewing the activities performed by the
Servicer under the Agreement and based upon the review required hereunder, and
except as disclosed in the annual statement of compliance identified in Section
3.17 of the Agreement, the annual independent public accountants' report
identified in Section 3.18 of the Agreement and all servicing reports, officer's
certificates and other information relating to the servicing of the Mortgage
Loans submitted to the Trustee, the Servicer has, as of the date of this
certification, fulfilled its obligations under this Agreement; and


                                       L-1

<PAGE>

          4. I have disclosed to the Trustee 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 under
the Agreement.

Date:
      -------------------------------

                                        Wilshire Credit Corporation, as Servicer


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                       L-2

<PAGE>

                                   EXHIBIT M-1

                                   [RESERVED]


                                      M-1-1

<PAGE>

                                   EXHIBIT M-2

                        FORM OF MONTHLY REMITTANCE ADVICE

STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED

<TABLE>
<CAPTION>
COLUMN NAME                               DESCRIPTION                    DECIMAL            FORMAT COMMENT
-----------                               -----------                    -------            --------------
<S>                      <C>                                             <C>       <C>
LOAN_NBR                 Loan Number assigned by investor                          Text up to 10 digits
SERVICER LOAN_NBR        Servicer Loan Number                                      Text up to 10 digits
SCHED_PMT_AMT            P&I constant                                       2      No commas(,) or dollar signs ($)
NOTE_INT_RATE            Gross Interest Rate                                4      Max length of 6
NET_RATE                 Gross Interest Rate less the Service Fee Rate      4      Max length of 6
SERV_FEE_RATE            Service Fee Rate                                   4      Max length of 6
ARM_INDEX_RATE           ARM loan's index Rate used                         4      Max length of 6
ACTL_BEG_BAL             Beginning Actual Balance                           2      No commas(,) or dollar signs ($)
ACTL_END_BAL             Ending Actual Balance                              2      No commas(,) or dollar signs ($)
NEXT_DUE_DATE            Borrower's next due date                                  MM/DD/YYYY
CURT_AMT_1               Curtailment Amount                                 2      No commas(,) or dollar signs ($)
CURT_DATE_1              Due date Curtailment was applied to                       MM/DD/YYYY
CURT_ADJ_AMT_1           Curtailment Interest if applicable                 2      No commas(,) or dollar signs ($)
CURT_AMT_2               Curtailment Amount 2                               2      No commas(,) or dollar signs ($)
CURT_DATE_2              Due date Curtailment was applied to                       MM/DD/YYYY
CURT_ADJ_ AMT2           Curtailment Interest if applicable                 2      No commas(,) or dollar signs ($)
CURT_AMT_3               Curtailment Amount 3                               2      No commas(,) or dollar signs ($)
CURT_DATE_3              Due date Curtailment was applied to                       MM/DD/YYYY
CURT_ADJ_AMT3            Curtailment Interest, if applicable                2      No commas(,) or dollar signs ($)
SCHED_BEG_BAL            Beginning Scheduled Balance                        2      No commas(,) or dollar signs ($)
SCHED_END_BAL            Ending Scheduled Balance                           2      No commas(,) or dollar signs ($)
SCHED_PRIN_AMT           Scheduled Principal portion of P&I                 2      No commas(,) or dollar signs ($)
SCHED_NET_INT            Scheduled Net Interest (less Service Fee)
                         portion of P&I                                     2      No commas(,) or dollar signs ($)
LIQ_AMT                  Liquidation Principal Amt to bring balance to
                         zero                                               2      No commas(,) or dollar signs ($)
PIF_DATE                 Liquidation Date                                          MM/DD/YYYY
ACTION_CODE              Either 60 for liquidation or 65 for
                         Repurchase                                                Max length of 2
</TABLE>


                                      M-2-1

<PAGE>

<TABLE>
<CAPTION>
COLUMN NAME                               DESCRIPTION                    DECIMAL            FORMAT COMMENT
-----------                               -----------                    -------            --------------
<S>                      <C>                                             <C>       <C>
PRIN_ADJ_AMT             Principal Adjustments made to loan, if
                         applicable                                         2      No commas(,) or dollar signs ($)
INT_ADJ_AMT              Interest Adjustment made to loan, if
                         applicable                                         2      No commas(,) or dollar signs ($)
PREPAYMENT PENALTY AMT   Prepayment penalty amount, if applicable           2      No commas(,) or dollar signs ($)
SOILDER_SAILOR ADJ AMT   Soldier and Sailor Adjustment amount, if
                         applicable                                         2      No commas(,) or dollar signs ($)
NON ADV LOAN AMT         Non Recoverable Loan Amount, if applicable         2      No commas(,) or dollar signs ($)
</TABLE>


                                      M-2-2

<PAGE>

                                    EXHIBIT N

                              FORM OF CAP CONTRACT

                                                         Dated: __________, 2005

                              Rate Cap Transaction

                           Re: BNY Reference No. _____

Ladies and Gentlemen:

The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the rate cap Transaction entered into on the Trade Date specified
below (the "Transaction") between The Bank of New York ("BNY"), a trust company
duly organized and existing under the laws of the State of New York and Merrill
Lynch Mortgage Investors Trust 2005-HE2 (the "Counterparty"). This Agreement,
which evidences a complete and binding agreement between you and us to enter
into the Transaction on the terms set forth below, constitutes a "Confirmation"
as referred to in the "ISDA Form Master Agreement" (as defined below), as well
as a "Schedule" as referred to in the ISDA Form Master Agreement.

1. This Agreement is subject to the 2000 ISDA Definitions (the "Definitions"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement, as modified by the Schedule terms in Section 4 of this Confirmation
(the "Master Agreement"), shall be deemed to have been executed by you and us on
the date we entered into the Transaction. Each party hereto agrees that the
Master Agreement deemed to have been executed by the parties hereto shall be the
same Master Agreement referred to in the agreement setting forth the terms of
transaction reference number 36975. In the event of any inconsistency between
the provisions of this Agreement and the Definitions or the ISDA Form Master
Agreement, this Agreement shall prevail for purposes of the Transaction.

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

          Type of Transaction:     Rate Cap

          Notional Amount:         The amount set forth on Schedule I attached
                                   hereto

          Trade Date:              November 22, 2005

          Effective Date:          November 30, 2005

          Termination Date:        July 25, 2006, subject to adjustment in
                                   accordance with the Business Day Convention.

     FIXED AMOUNT (PREMIUM):


                                       N-1

<PAGE>

          Fixed Amount Payer:      Counterparty

          Fixed Amount Payer
          Payment Date:            November 30, 2005

          Fixed Amount:            USD _______

     FLOATING AMOUNTS:

          Floating Rate Payer:     BNY

          Cap Rate:                For each Calculation Period, as set forth for
                                   such period on Schedule I attached hereto

          Floating Rate Payer
          Period End Dates:        The 25th calendar day of each month during
                                   the Term of this Transaction, commencing
                                   December 25, 2005 and ending on the
                                   Termination Date, subject to adjustment in
                                   accordance with the Business Day Convention.

          Floating Rate Payer
          Payment Dates:           Early Payment shall be applicable. The
                                   Floating Rate Payer Payment Date shall be two
                                   (2) Business Days preceding each Floating
                                   Rate Payer Period End Date.

          Floating Rate Option:    USD-LIBOR-BBA, provided, however, if the
                                   Floating Rate Option for a Calculation Period
                                   is greater than ____% then the Floating Rate
                                   Option for such Calculation Period shall be
                                   deemed equal to _____%.

          Floating Amount:         To be determined in accordance with the
                                   following formula: Greater of (i) 10 *
                                   (Floating Rate Option-Cap Rate) * Notional
                                   Amount * Floating Day Count Fraction and (ii)
                                   Zero.

          Floating Rate for
          initial Calculation
          Period:                  To be determined

          Designated Maturity:     One month

          Floating Rate Day
          Count Fraction:          Actual/360

          Reset Dates:             The first day of each Calculation Period


                                       N-2

<PAGE>

          Compounding:             Inapplicable

          Business Days:           New York

          Business Day Convention: Modified Following

          Calculation Agent:       BNY

3.   Additional Provisions:

          Each party hereto is hereby advised and acknowledges that the other
     party has engaged in (or refrained from engaging in) substantial financial
     transactions and has taken (or refrained from taking) other material
     actions in reliance upon the entry by the parties into the Transaction
     being entered into on the terms and conditions set forth herein and in the
     Confirmation relating to such Transaction, as applicable. This paragraph
     shall be deemed repeated on the trade date of each Transaction.

4.   Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
     Agreement:

     1)   The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
          Form Master Agreement will apply to any Transaction.

     2)   Termination Provisions. For purposes of the ISDA Form Master
          Agreement:

          (a)  "Specified Entity" is not applicable to BNY or Counterparty for
               any purpose.

          (b)  "Breach of Agreement" provision of Section 5(a)(ii) will apply to
               BNY and will not apply to Counterparty.

          (c)  "Credit Support Default" provisions of Section 5(a)(iii) will not
               apply to BNY or Counterparty.

          (d)  "Misrepresentation" provisions or Section 5(a)(iv) will apply to
               BNY and will not apply to Counterparty.

          (e)  "Specified Transaction" is not applicable to BNY or Counterparty
               for any purpose, and, accordingly, Section 5(a)(v) shall not
               apply to BNY or Counterparty.

          (f)  The "Cross Default" provisions of Section 5(a)(vi) will not apply
               to BNY or to Counterparty.

          (g)  The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
               will not apply to BNY or Counterparty.


                                       N-3

<PAGE>

          (h)  The "Bankruptcy" provision of Section 5(a)(vii)(2) will not apply
               to Counterparty.

          (i)  The "Automatic Early Termination" provision of Section 6(a) will
               not apply to BNY or to Counterparty.

          (j)  Payments on Early Termination. For the purpose of Section 6(e) of
               this Agreement:

               (i)  Market Quotation will apply.

               (ii) The Second Method will apply.

          (k)  "Termination Currency" means United States Dollars.

3)   Tax Representations.

     Payer Representations. For the purpose of Section 3(e) of this Agreement,
     BNY and Counterparty make the following representations:

     It is not required by any applicable law, as modified by the practice of
     any relevant governmental revenue authority, of any Relevant Jurisdiction
     to make any deduction or withholding for or on account of any Tax from any
     payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
     Agreement) to be made by it to the other party under this Agreement. In
     making this representation, it may rely on:

          (i) the accuracy of any representations made by the other party
          pursuant to Section 3(f) of this Agreement;

          (ii) the satisfaction of the agreement contained in Section 4 (a)(i)
          or 4(a)(iii) of this Agreement and the accuracy and effectiveness of
          any document provided by the other party pursuant to Section 4 (a)(i)
          or 4(a)(iii) of this Agreement; and

          (iii) the satisfaction of the agreement of the other party contained
          in Section 4(d) of this Agreement, provided that it shall not be a
          breach of this representation where reliance is placed on clause (ii)
          and the other party does not deliver a form or document under Section
          4(a)(iii) by reason of material prejudice of its legal or commercial
          position.

     Payee Representations. For the purpose of Section 3(f) of this Agreement,
     BNY and Counterparty make the following representations.

     The following representation will apply to BNY:

          BNY is a trust company duly organized and existing under the laws of
          the State of New York and its U.S. taxpayer identification number is
          135160382.


                                       N-4

<PAGE>

          The following representation will apply to the Counterparty:

               The Counterparty is a "U.S. person" (as that term is used in
               section 1.1441-4(a)(3)(ii) of United States Treasury Regulations)
               for United States federal income tax purposes.

4)   The ISDA Form Master Agreement is hereby amended as follows:

               The word "third" shall be replaced by the word "second" in the
               third line of Section 5(a)(i) of the ISDA Form Master Agreement.

5)   Documents to be Delivered. For the purpose of Section 4(a):

(1)  Tax forms, documents, or certificates to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO          FORM/DOCUMENT/                 DATE BY WHICH TO
DELIVER DOCUMENT             CERTIFICATE                    BE DELIVERED
-----------------   ----------------------------   -----------------------------
<S>                 <C>                            <C>
BNY and             Any document required or       Promptly after the earlier of
the Counterparty    reasonably requested to        (i) reasonable demand by
                    allow the other party to       either party or (ii) learning
                    make payments under this       that such form or document is
                    Agreement without any          required
                    deduction or withholding for
                    or on the account of any Tax
                    or with such deduction or
                    withholding at a reduced
                    rate
</TABLE>

(2)  Other documents to be delivered are:

<TABLE>
<CAPTION>
                                                                         COVERED BY
PARTY REQUIRED TO        FORM/DOCUMENT/           DATE BY WHICH TO      SECTION 3(D)
DELIVER DOCUMENT           CERTIFICATE              BE DELIVERED       REPRESENTATION
-----------------   ------------------------   ---------------------   --------------
<S>                 <C>                        <C>                     <C>
BNY and             Any documents required     Upon the execution            Yes
the Counterparty    by the receiving party     and delivery of this
                    to evidence the            Agreement and such
                    authority of the           Confirmation
                    delivering party or its
                    Credit Support Provider,
                    if any, for it to
                    execute and deliver this
                    Agreement, any
                    Confirmation, and any
                    Credit Support
</TABLE>


                                       N-5

<PAGE>

<TABLE>
<CAPTION>
                                                                         COVERED BY
PARTY REQUIRED TO        FORM/DOCUMENT/           DATE BY WHICH TO      SECTION 3(D)
DELIVER DOCUMENT           CERTIFICATE              BE DELIVERED       REPRESENTATION
-----------------   ------------------------   ---------------------   --------------
<S>                 <C>                        <C>                     <C>
                    Documents to which it is
                    a party, and to evidence
                    the authority of the
                    delivering party or its
                    Credit Support Provider
                    to perform its
                    obligations under this
                    Agreement, such
                    Confirmation and/or
                    Credit Support Document,
                    as the case may be

BNY and             A certificate of an        Upon the execution            Yes
the Counterparty    authorized officer of      and delivery of this
                    the party, as to the       Agreement and such
                    incumbency and authority   Confirmation
                    of the respective
                    officers of the party
                    signing this Agreement,
                    any relevant Credit
                    Support Document, or any
                    Confirmation, as the
                    case may be

BNY                 A copy of the most         Promptly after                Yes
                    recent publicly            request by the other
                    available regulatory       party
                    call report.
</TABLE>

6)   Miscellaneous.

(a)  Address for Notices: For the purposes of Section 12(a) of this Agreement:

     Address for notices or communications to BNY:

               The Bank of New York
               Swaps and Derivative Products Group
               Treasury Division
               32 Old Slip 15th Floor


                                       N-6

<PAGE>

               New York, New York 10286
               Attention: Stephen M. Lawler
               Fax: 212-495-1015
               Phone: 212-804-2137

          (For all purposes)

     Address for notices or communications to the Counterparty:

               Wells Fargo Bank, N.A.
               9062 Old Annapolis Road
               Columbia, Maryland 21045
               Attention: Client Services Manager-MLMI 2005-HE2
               Tele: 410-884-2000
               Fax No.: 410-715-2380

          (For all purposes)

(b)  Process Agent. For the purpose of Section 13(c):

               BNY appoints as its
               Process Agent: Not Applicable

               The Counterparty appoints as its
               Process Agent: Not Applicable

(c)  Offices. The provisions of Section 10(a) will not apply to this Agreement;
     neither BNY nor the Counterparty have any Offices other than as set forth
     in the Notices Section and BNY agrees that, for purposes of Section 6(b) of
     this Agreement, it shall not in future have any Office other than one in
     the United States.

(d)  Multibranch Party. For the purpose of Section 10(c) of this Agreement:

     BNY is not a Multibranch Party.

     The Counterparty is not a Multibranch Party.

(e)  Calculation Agent. The Calculation Agent is BNY.

(f)  Credit Support Document. Not applicable for either BNY or the Counterparty.

(g)  Credit Support Provider.


                                       N-7

<PAGE>

     BNY: Not Applicable

     The Counterparty: Not Applicable

(h)  Governing Law. The parties to this Agreement hereby agree that the law of
     the State of New York shall govern their rights and duties in whole,
     without regard to conflict of law provisions thereof other than New York
     General Obligations Law Sections 5-1401 and 5-1402.

(i)  Severability. If any term, provision, covenant, or condition of this
     Agreement, or the application thereof to any party or circumstance, shall
     be held to be invalid or unenforceable (in whole or in part) for any
     reason, the remaining terms, provisions, covenants, and conditions hereof
     shall continue in full force and effect as if this Agreement had been
     executed with the invalid or unenforceable portion eliminated, so long as
     this Agreement as so modified continues to express, without material
     change, the original intentions of the parties as to the subject matter of
     this Agreement and the deletion of such portion of this Agreement will not
     substantially impair the respective benefits or expectations of the
     parties.

     The parties shall endeavor to engage in good faith negotiations to replace
     any invalid or unenforceable term, provision, covenant or condition with a
     valid or enforceable term, provision, covenant or condition, the economic
     effect of which comes as close as possible to that of the invalid or
     unenforceable term, provision, covenant or condition.

(j)  Consent to Recording. Each party hereto consents to the monitoring or
     recording, at any time and from time to time, by the other party of any and
     all communications between officers or employees of the parties, waives any
     further notice of such monitoring or recording, and agrees to notify its
     officers and employees of such monitoring or recording.

(k)  Waiver of Jury Trial. Each party waives any right it may have to a trial by
     jury in respect of any Proceedings relating to this Agreement or any Credit
     Support Document.

(m)  Transfer, Amendment and Assignment. No transfer, amendment, assignment or
     other modification of this Transaction shall be permitted unless agreed to
     by both parties and unless Standard & Poor's Ratings Service, a division of
     The McGraw-Hill Companies, Inc., has been provided notice of the same and
     confirms in writing (including by facsimile transmission) within five
     Business Days after such notice is given that it will not downgrade,
     qualify, withdraw or otherwise modify its then-current rating of the Notes.

(n)  Proceedings. BNY shall not institute against or cause any other person to
     institute against, or join any other person in instituting against, Merrill
     Lynch Mortgage Investors Trust 2005-HE2, any bankruptcy, reorganization,
     arrangement, insolvency or liquidation proceedings, or other proceedings
     under any federal or state bankruptcy or similar law for a period of one
     year and one day (or, if longer, the applicable preference period)
     following indefeasible payment in full of the Notes.


                                       N-8

<PAGE>

7)   Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
     the end thereof the following subsection (g):

     "(g) Relationship Between Parties.

          Subject to Part 13 of the Agreement, each party represents to the
          other party on each date when it enters into a Transaction that:

          (1) Nonreliance. It is not relying on any statement or representation
          of the other party regarding the Transaction (whether written or
          oral), other than the representations expressly made in this Agreement
          or the Confirmation in respect of that Transaction.

          (2) Evaluation and Understanding.

               (i) It is acting for its own account, has the capacity to
               evaluate (internally or through independent professional advice)
               the Transaction and has made its own decision to enter into the
               Transaction; it is not relying on any communication (written or
               oral) of the other party as investment advice or as a
               recommendation to enter into such transaction; it being
               understood that information and explanations related to the terms
               and conditions of such transaction shall not be considered
               investment advice or a recommendation to enter into such
               transaction. No communication (written or oral) received from the
               other party shall be deemed to be an assurance or guarantee as to
               the expected results of the transaction; and

               (ii) It understands the terms, conditions and risks of the
               Transaction and is willing and able to accept those terms and
               conditions and to assume (and does, in fact assume) those risks,
               financially and otherwise.

          (3) Purpose. It is an "eligible swap participant" as such term is
          defined in Section 35.1(b)(2) of the regulations (17 C.F.R 35)
          promulgated under, an and "eligible contract participant" as defined
          in Section 1(a)(12) of, the Commodity Exchange Act, as amended, and it
          is entering into the Transaction for the purposes of managing its
          borrowings or investments, hedging its underlying assets or
          liabilities or in connection with a line of business.

          (4) Principal. The other party is not acting as a fiduciary or an
          advisor for it in respect of this Transaction."

8)   Set-off. Notwithstanding any provision of this Agreement or any other
     existing or future agreement, each party irrevocably waives any and all
     rights it may have to set off, net, recoup or otherwise withhold or suspend
     or condition payment or performance of any obligation between it and


                                       N-9

<PAGE>

     the other party hereunder against any obligation between it and the other
     party under any other agreements. The last sentence of the first paragraph
     of Section 6(e) of the ISDA Form Master Agreement shall not apply for
     purposes of this Transaction.

9)   Additional Termination Events. Additional Termination Events will apply. If
     a Ratings Event has occurred and BNY has not, within 30 days, complied with
     Section 10 below, then an Additional Termination Event shall have occurred
     with respect to BNY and BNY shall be the sole Affected Party with respect
     to such an Additional Termination Event.

10)  Ratings Event. If a Ratings Event (as defined below) occurs with respect to
     BNY (or any applicable credit support provider), then BNY shall, at its own
     expense, within thirty (30) days of such Ratings Event (i) assign this
     Transaction to a third party that meets or exceeds, or as to which any
     applicable credit support provider meets or exceeds, the Approved Ratings
     Thresholds (as defined below) on terms substantially similar to this
     Confirmation, which party is approved by the Counterparty, which approval
     shall not be unreasonably withheld, (ii) obtain a guaranty of, or a
     contingent agreement of, another person with the Approved Rating Thresholds
     to honor BNY's obligations under this Agreement, provided that such other
     person is approved by the Counterparty, such approval not to be
     unreasonably withheld (iii) post collateral under agreements and other
     instruments satisfactory to Counterparty or (iv) establish any other
     arrangement satisfactory to Counterparty, For purposes of this Transaction,
     a "Ratings Event" shall occur with respect to BNY (or any applicable credit
     support provider) if its short-term unsecured and unsubordinated debt
     ceases to be rated at least "A-1" by S&P or at least "F-1" by Fitch
     (including in connection with a merger, consolidation or other similar
     transaction by BNY or any applicable credit support provider) such ratings
     being referred to herein as the "Approved Ratings Thresholds". All the
     provisions above are subject to the Rating Agency Condition (no downgrade
     letter may be substituted for the Rating Agency Condition). For purposes of
     this provision, "Rating Agency Condition" means, with respect to any
     particular proposed act or omission to act hereunder that the party acting
     or failing to act must consult with S&P and Fitch and receive from S&P a
     prior written confirmation that the proposed action or inaction would not
     cause a downgrade or withdrawal of the then-current rating of the Notes.

11)  Additional Provisions. Notwithstanding the terms of Sections 5 and 6 of the
     ISDA Form Master Agreement, if Counterparty has satisfied its payment
     obligations under Section 2(a)(i) of the ISDA Form Master Agreement, then
     unless BNY is required pursuant to appropriate proceedings to return to
     Counterparty or otherwise returns to Counterparty upon demand of
     Counterparty any portion of such payment, (a) the occurrence of an event
     described in Section 5(a) of the ISDA Form Master Agreement with respect to
     Counterparty shall not constitute an Event of Default or Potential Event of
     Default with respect to Counterparty as the Defaulting Party and (b) BNY
     shall be entitled to designate an Early Termination Event pursuant to
     Section 6 of the Agreement only as a result of a Termination Event set
     forth in either Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form Master
     Agreement with respect to BNY as the Affected Party or Section 5(b)(iii) of
     the ISDA Form Master Agreement with respect to BNY as the Burdened Party.
     For purposes of the Transaction to which this Agreement relates,
     Counterparty's only obligation under


                                      N-10

<PAGE>

     Section 2(a)(i) of the ISDA Form Master Agreement is to pay the Fixed
     Amount on the Fixed Rate Payer Payment Date.

12)  MLML Shall Not Benefit. The parties hereto agree and acknowledge that
     amounts paid hereunder are not intended to benefit the holder of any class
     of the Merrill Lynch Mortgage Investors Trust, MLMI 2005-HE2 Mortgage Loan
     Asset Backed Certificates rated by any rating agency if such holder is
     Merrill Lynch Mortgage Lending Inc. ("MLML") or any of its affiliates. If
     MLML or any of its affiliates receives any such amounts, it will promptly
     remit (or, if such amounts are received by an affiliate of MLML, MLML
     hereby agrees that it will cause such affiliate promptly to remit) such
     amounts to the Trustee, whereupon the Trustee shall promptly remit such
     amounts to BNY." The Trustee shall provide notice to BNY prior to remitting
     any such amounts to BNY.

13)  Limitation of Liability. It is expressly understood and agreed by the
     parties hereto that (a) this Agreement is executed and delivered by Wells
     Fargo Bank, N.A., not individually or personally but solely as Trustee of
     Merrill Lynch Mortgage Investor Trust, Series 2005-HE2, in the exercise of
     the powers and authority conferred upon and vested in it under the Pooling
     and Servicing Agreement dated as of November 1, 2005, by and among Merrill
     Lynch Mortgage Investors, Inc. as depositor and Wells Fargo Bank, National
     Association as trustee (the "Pooling Agreement") and pursuant to
     instruction therein, and that the Trustee shall perform its duties and
     obligations hereunder in accordance with the standard care set forth in the
     Pooling Agreement, (b) each of the representations, undertakings and
     agreements herein made on the part of the Trust is made and intended not as
     a personal representation, undertaking or agreement of the Trustee, but is
     made and intended for the purpose of binding only the Trust, and (c) under
     no circumstances shall the Trustee be liable for the payment of any
     indebtedness or expenses of the Trust or be liable for the breach or
     failure of any obligation, representation, warranty of covenant made or
     undertaken by the Trust herein; provided that nothing in this paragraph
     shall relieve the Trustee from performing its duties and obligations
     hereunder in accordance with the standard of care set forth in the Pooling
     Agreement.

5.   Account Details and
     Settlement Information:   PAYMENTS TO BNY:
                               The Bank of New York
                               Derivative Products Support Department
                               32 Old Slip, 16th Floor
                               New York, New York 10286
                               Attention: Renee Etheart
                               ABA #____________
                               Account #_____________
                               Reference: Interest Rate Caps

                               PAYMENTS TO COUNTERPARTY:

                               Wells Fargo Bank, N.A.


                                      N-11

<PAGE>

                               ABA#: _______________
                               For Credit To: SAS Clearing
                               Account: _____________
                               FFC To: MLMI 2005-HE2 Acct #__________

This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it via facsimile to
Derivative Products Support Dept., Attn: Dax Braga/Kenny Au-Yeung at
212-804-5818/5837. Once we receive this we will send you two original
confirmations for execution.

We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

THE BANK OF NEW YORK


A. BY:
       -----------------------------
Name: Stephen M. Lawler
Title: Managing Director


                                      N-12

<PAGE>

Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.

MERRILL LYNCH MORTGAGE INVESTORS TRUST 2005-HE2

By: Wells Fargo Bank, N.A., not in its individual capacity, but solely in its
capacity as Trustee of the Merrill Lynch Mortgage Investors Trust 2005-HE2


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


Solely with respect to Section 4 (12)
II. MERRILL LYNCH MORTGAGE LENDING INC


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


                                      N-13

<PAGE>

                                   SCHEDULE I

    (all such dates subject to adjustment in accordance with the Business Day
                                   Convention)


                                      N-14

<PAGE>

                                    EXHIBIT O

                            ONE-MONTH LIBOR CAP TABLE

<TABLE>
<CAPTION>
PERIOD   BEGINNING ACCRUAL   ENDING ACCRUAL   NOTIONAL BALANCE($)   LOWER COLLAR (%) (1)   UPPER COLLAR (%)
------   -----------------   --------------   -------------------   --------------------   ----------------
<S>      <C>                 <C>              <C>                   <C>                    <C>
  1          11/30/05           12/25/05          709,544,000               6.836                9.230
  2          12/25/05           01/25/06          698,821,632               5.631                9.230
  3          01/25/06           02/25/06          686,520,545               5.632                9.230
  4          02/25/06           03/25/06          672,684,561               6.265                9.230
  5          03/25/06           04/25/06          657,382,255               5.634                9.230
  6          04/25/06           05/25/06          640,847,691               5.832                9.230
  7          05/25/06           06/25/06          623,184,456               5.637                9.230
  8          06/25/06           07/25/06          605,416,892               5.836                9.230
</TABLE>

(1)  With respect to any Distribution Date, if One-Month LIBOR (as determined by
     the Cap Contract Counterparty and subject to a cap equal to 9.230%) exceeds
     the Lower Collar, the Trust Fund will receive payments pursuant to the Cap
     Contract.


                                      O-1

<PAGE>

                                    EXHIBIT P

                                FORM OF MI POLICY

                             SCHEDULE ENDORSEMENT TO
                      BULK PRIMARY FIRST LIEN MASTER POLICY
                                 (THE "POLICY")

<TABLE>
<S>                                     <C>
POLICY ISSUED TO:                       ATTACHED TO AND FORMING PART OF POLICY
                                        NUMBER:

Wells Fargo Bank, N.A. as trustee for   _____________
the Merrill Lynch Mortgage Investors
Trust Series 2005-HE2
9062 Old Annapolis Road
Columbia, MD 21045

EFFECTIVE DATE OF POLICY:               EFFECTIVE DATE OF SCHEDULE
                                        ENDORSEMENT:

NOVEMBER 1, 2005                        NOVEMBER 1, 2005
</TABLE>

          The Schedule Endorsement hereby extends coverage under the above
Policy of Insurance, from and after the date of this Schedule Endorsement, to
those Loans listed in the Certificate Schedule attached hereto and made a part
to this Schedule Endorsement (herein called "Schedule A").

          The term "Effective Date" for the Loan(s) covered by this Schedule
Endorsement shall mean the date stated above.

          Except for the foregoing amendments, the Policy and all terms,
conditions, provisions, and limitations of the Policy remain in full force and
effect. None of the terms, conditions, provisions and limitations of the Policy
have been varied, waived, altered or extended in any manner except as expressly
set forth in this Schedule Endorsement.

          IN WITNESS WHEREOF, the Company has caused this Endorsement to be
signed by its duly authorized officers as of the Effective Date first above
stated.

                            PM MORTGAGE INSURANCE CO.


BY:                                     BY:
    ---------------------------------       ------------------------------------
    President                               Secretary


                                       P-1

<PAGE>

                                           BULK PRIMARY FIRST LIEN MASTER POLICY
                                                BULK QUALITY PROGRAM ENDORSEMENT

                       BULK QUALITY PROGRAM ENDORSEMENT TO
                      BULK PRIMARY FIRST LIEN MASTER POLICY
                           FORMS UW 2510.00 (09/00) &
                              UW 2511.00 TX (09/00)

          Section VI., C., (Representations and Reliance; Incontestability) is
hereby deleted in its entirety and there is substituted in its place the
following:

     C. REPRESENTATIONS AND RELIANCE; INCONTESTABILITY - The Company is
extending coverage under the Policy to Loans pursuant to the Bulk Quality
Program in reliance upon the truth and accuracy of the information contained in
the Application, including information in the Insured's Loan files and the
statements made in the electronic transmittal of Loan information to PMI. The
Insured agrees that statements made by any First Party in any documents
submitted to the Insured at the time the Loan is originated, are deemed to be
the representations of the Insured. No Claim payable under this Policy with
respect to a Loan, arising from a Default otherwise covered under the Policy,
will be denied, nor will the Certificate for such Loan be rescinded based on any
misrepresentation made by any person other than a First Party in the Application
or in the electronic transmittal of Loan information to PMI.

          All conditions of the Policy not modified by this Endorsement remain
in full force and effect for all Loans insured under the Policy.


                                      P-2

<PAGE>

                                                BULK PRIMARY FIRST MASTER POLICY
                                           BLOCKED PERSONS EXCLUSION ENDORSEMENT

                                 ENDORSEMENT TO
                      BULK PRIMARY FIRST LIEN MASTER POLICY
                        FORMS UW 2510.00 & UW 2511.00 TX

          It is understood and agreed that the Bulk Primary First Lien Master
Policy ("Policy") is amended as follows:

          The following provision is added as a new Section III.,L. ("Blocked
Persons Exclusion"):

     L.   Any Claim arising from or related to a Loan made null and void by any
          of the provisions of the Office of Foreign Asset Control Regulations
          found in Title 31, Chapter V, Parts 500 through 598 of the United
          States Code of Federal Regulations, or any other state or federal
          statute or regulation prohibiting the making of a Loan to a specified
          Person.

          All other terms and conditions of the Policy remained unchanged.


                                      P-3

<PAGE>

3003 OAK ROAD
WALNUT CREEK, CALIFORNIA 94597

          PMI Mortgage Insurance Co. (an Arizona corporation hereinafter called
the "Company") agrees to pay to the insured, in consideration of the premium or
premiums to be paid as hereinafter specified and in reliance upon the Insured's
representations and statements made in any Application for coverage under this
Policy, any loss due to the Default by a Borrower on a Loan, subject to the
terms and conditions contained herein.

          To obtain information about this Policy, to register a complaint or to
obtain information about related mortgage guaranty insurance products and
services offered by the Company, the insured or its servicer may call the
Company toll free at 800-286-1970.

<TABLE>
<CAPTION>
Insured's Name and Mailing Address                                Policy Number
----------------------------------                                -------------
<S>                                                               <C>
Wells Fargo Bank, NA. as trustee for the Merrill Lynch Mortgage   ____________
Investors Trust Series 2005-HE2
9062 Old Annapolis Road
Columbia, MD 21045
</TABLE>

          IN WITNESS WHEREOF, the Company has caused its Corporate Seal to be
affixed hereto and these presents to be signed by its duly authorized officers
in facsimile to become effective as its original seal and signature and binding
on the Company.

                            PM MORTGAGE INSURANCE CO.


-------------------------------------    ---------------------------------------
L. Stephen Smith, President              Victor J. Bacigalupi, Secretary


                                      P-4

<PAGE>

                            Authorized Representative

                              TERMS AND CONDITIONS

I.   Definitions

     A.   ACQUISITION OPTION means the method of determining the amount of the
          Insurance Benefit with respect to a Loan as set forth in Section V.,
          C., 1.

     B.   ADVANCES means the reasonable and necessary sums paid by the Insured
          with respect to Loan after Default, for the following:

          1.   Hazard insurance premiums;

          2.   Real estate property taxes;

          3.   Property protection and preservation expenses;

          4.   Property sales expenses;

          5.   Customary foreclosure costs including Court Expenses and
               reasonable attorney's fees;

          6.   Costs of other customary legal proceedings, as may be necessary
               to obtain Good and Merchantable Tide to or Possession of the
               Property-, and

          7.   Loss mitigation expenses.

     C.   ANTICIPATED LOSS means, in connection with a Claim, an amount equal to
          the Company's cost of paying the full Claim Amount calculated in
          accordance with Section V., B., less the amount the Company reasonably
          anticipates receiving as net proceeds of the sale of the Property,
          subtracting also from such proceeds all anticipated costs of the sale
          and holding costs, but in any event, such amount shall never be
          greater than the Loss calculated under the Percentage Option in
          accordance with Section V., C., 2.

     D.   APPLICATION means the Insured's statements and descriptions, both oral
          and written, relative to the Loan made in connection with the
          application or negotiation for the insurance provided by this Policy,
          including the representations made, and documents executed by the
          Borrower, as evidenced by documents, writings, electronic media
          transfers, telephone data transmissions, and the like.

     E.   APPROPRIATE PROCEEDINGS means any legal or administrative action or
          proceeding by the Insured affecting either the Loan or the title to
          the Property, and include, but are not limited to:


                                      P-5

<PAGE>

          1.   enforcing the terms of the Loan as allowed by the laws where the
               Property is located; or

          2.   establishing a deficiency amount where appropriate and
               permissible and where directed by the Company; or

          3.   acquiring all the Borrower's right and title to the Property in
               the Insured's name, but excluding any voluntary conveyance under
               Section IV., D., (Voluntary Conveyance); or

          4.   asserting the Insured's interest in the Property in a Borrower's
               bankruptcy or similar proceeding.

     F.   BORROWER means any Person required to repay the debt obligation
          created pursuant to the Loan. The Borrower may be more than one
          Person, and the term shall include any co-signer or guarantor of the
          Loan.

     G.   BORROWER'S OWN FUNDS means any funds owned by the Borrower and neither
          borrowed from other sources, nor subject to refund, rebate, or
          repayment.

     H.   BORROWER'S TITLE means such title to a Property as was vested in the
          Borrower at die time of a conveyance to the Insured extinguishing all
          of the Borrower's rights in the Property; provided, however, if the
          Insured so elects, the redemption period need not have expired. The
          deed evidencing such title in the Insured need not be recorded unless
          required by applicable law.

     I.   CERTIFICATE means once all conditions for coverage have been
          satisfied, the number issued by the Company to a Loan, as listed on a
          Certificate Schedule.

     J.   CERTIFICATE SCHEDULE means a list of Loans to which coverage has been
          extended under this Policy, and which is attached to this Policy, or
          added thereto by endorsement, and any document issued by the Company
          pursuant to this Policy amending coverage for a Loan.

     K.   CLAIM means the timely filed written request, made on a form provided
          by or in a manner approved by the Company, to receive benefits of this
          Policy. A Claim received by the Company containing all information or
          proof required by the Company shall be called a Perfected Claim.

     L.   CLAIM AMOUNT means the actual loss incurred by the Insured with
          respect to a Loan as calculated in accordance with Section V., B.,
          (Calculation of Claim Amount) giving effect to adjustments made by the
          Company due to failure of the Insured to mitigate loss.

     M.   CLAIM SETTLEMENT PERIOD means a sixty (60) day period following the f
          ling of a Claim with the Company provided that such period shall be
          extended by the number of days elapsed from the date the Company sends
          notice of deficiency of


                                       P-6

<PAGE>

          a Claim to the Insured to the date that the Insured files a Perfected
          Claim with the Company.

     N.   CLOSED means the later of:

          1.   The date on which all Loan documents were executed and delivered;
               or

          2.   The date on which the funds under the Loan were initially
               disbursed to or for the benefit of the Borrower.

     O.   COURT EXPENSES means the out-of-pocket cost of initiating and
          conducting Appropriate Proceedings or any eviction proceedings. These
          expenses include costs of filing or serving pleadings, conducting
          discovery and enforcing judgment. These expenses do not include
          reimbursement for any time spent by the Insured or the Insured's
          employees, officers or agents, nor do these expenses include
          attorney's fees.

     P.   DEFAULT means the failure by a Borrower to pay when due: (i) an amount
          equal to or greater than one (1) regular periodic payment due under
          the terms of a Loan, or (ii) the failure by a Borrower to pay when due
          all amounts due under a Loan after the exercise by the Insured of the
          "due on sale" provision of such Loan, provided however, that a Default
          as defined in (i) above which is cured within 59 days of the payment
          due date, will not be deemed to be a Default for purposes of
          administration of this Policy unless the missed payment is the first
          payment due under a Loan. Default does not mean any other non-monetary
          default or violation of any other term or condition of the Loan, which
          would allow for acceleration of the debt or foreclosure or other
          action to realize upon the security provided by the Loan.

          A Loan is deemed to be in Default for the period for which, as of the
          close of business on the installment due date, a scheduled installment
          payment has not been made. For example, a Loan is "four periodic
          payments in Default" if the periodic payments due on January 1 through
          April 1 remain unpaid as of the close of business on April 1.

     Q.   DEFAULT AMOUNT means the unpaid principal balance of a Loan as of the
          date of Default excluding any Negative Amortization. If a Loan has
          been divided into secured and unsecured portions pursuant to
          proceedings under the federal bankruptcy laws, the Default Amount
          shall include the unpaid principal balance due under the unsecured
          portion of the Loan even if the Insured has written off such unsecured
          portion of the Loan, provided that the premium paid has been
          calculated based on both the secured and unsecured portions of the
          Loan.

     R.   DEFICIENCY EXPENSES means reasonable attorneys fees and necessary
          court costs incurred by the Insured for those Appropriate Proceedings
          necessary to pursue or establish a deficiency against the Borrower and
          which are in addition to those incurred in standard and customary
          foreclosure proceedings, plus additional interest accruing on the
          Loan, real estate taxes, casualty insurance premiums and


                                       P-7

<PAGE>

          Property preservation expenses incurred during such Appropriate
          Proceedings and any additional related redemption period.

     S.   DOWN PAYMENT means (i) a cash contribution made by the Borrower,
          either prior to or at the time the Loan is Closed, from the Borrower's
          Own Fund's towards the purchase price of the Property, or (ii) a
          verifiable equity in the Property vested in the Borrower only, after
          completion of the improvements in accordance with the Original
          Appraisal.

     T.   EFFECTIVE DATE means, provided that the premium has been paid as
          required herein, 12:01 a.m. on the date of coverage as indicated on
          the Certificate Schedule.

     U.   ENVIRONMENTAL IMPAIRMENT means Physical Damage to a Property occurring
          by reason of environmental contamination including, but not limited
          to, nuclear reaction or radioactive waste, toxic waste, poisoning or
          pollution of earth or water subjacent to the Property or of the
          atmosphere above the Property; or similar hazard including any
          condition giving rise to liability under the Comprehensive
          Environmental Response, Compensation and Liability Act or any similar
          law existing under either federal law or the law of the state where
          the Property is located.

     V.   FIRST PARTY means (a) the Insured or any officer, employee or agent of
          the Insured or (b) any of the following Persons: the correspondent
          lender, mortgage loan broker or other intermediary underwriting or
          originating the Loan on behalf of the Insured or originating lender,
          or escrow or dosing agents or anyone under contract with the Insured
          or originating lender in connection with the origination of such Loan,
          such as an appraiser.

     W.   FMV means the fair market value of a Property as of a specific date
          which shall be equal to the lesser of the appraised value or the sale
          price of the Property on that date; or in the event of a foreclosure
          sale, the appraised value or estimated value determined in accordance
          with customary servicing practices, or the value as determined under
          applicable law, where such law prescribes a method for determining the
          value of a Property.

     X.   GOOD AND MERCHANTABLE TITLE means title to the Property, free and
          clear of all liens and encumbrances, covenants, conditions,
          restrictions, easements and rights of redemption, except for:

          1.   Any lien established by public bond, assessment or tax, when no
               installment, call or payment of or under such bond, assessment or
               tax is delinquent and

          2.   Any municipal of zoning ordinances, building restrictions or
               other restrictions, covenants, regulations of use, provided the
               Property is in compliance with, and its intended use and
               occupancy is not materially


                                       P-8

<PAGE>

               adversely affected by, such restrictions, covenants, regulations
               or ordinances; and

          3.   Easements, tights of way, sewer and utility tights, mineral, oil
               or timber rights, or any impediments which will not have a
               materially adverse effect on either the transferability of the
               Property or the sale thereof to a bona fide purchaser.

          The Property must have, at a minimum, the following characteristics to
          establish Good and Merchantable Title: (i) adequate means of ingress
          and egress; CU) the right to use of water and sewer facilities
          appertaining to the Property, whether such rights be by virtue of
          public easement or private grant; (iii) the Property must be free of
          any lien for any toxic waste or environmental contamination or similar
          hazard or claim of such hazard pursuant to the Comprehensive
          Environmental Response Compensation and Liability Act, as amended, or
          similar federal or state law providing for liens in connection with
          the clean up of environmental conditions, and no proceedings to
          initiate such a lien may he pending, unless otherwise agreed to by the
          Company.

     Y.   INSURANCE BENEFIT means the liability of the Company with respect to a
          Loan calculated in accordance with this Policy. A right to receive an
          Insurance Benefit shall be deemed to have arisen when a Default occurs
          while the Policy is in force for a Loan, notwithstanding that the
          amount of the Insurance Benefit is not then either presently
          ascertainable or due and payable.

     Z.   INSURED means with respect to any Loan:

          1.   The Person designated on the face of this Policy; or

          2.   Any Person, other than a natural Person, who owns the Loan,
               either for its own benefit or as trustee for the benefit of a
               third party.

     AA.  LOAN means any note or other evidence of indebtedness and the
          indebtedness it so evidences, together with the mortgage, bond, deed
          of trust, or other instrument securing said indebtedness, and to which
          coverage under this Policy has been extended.

     BB.  NEGATIVE AMORTIZATION means the additions to the principal amount of a
          Loan arising from the insufficiency of regularly scheduled payments to
          cover interest as it accrues against the principal amount of the Loan
          as provided for therein.

     CC.  ORIGINAL APPRAISAL means the appraisal, other report or description of
          the Property, obtained by the lender under the Loan at the time it was
          originated, which establishes the value of the Property at that time.

     DD.  PERCENTAGE OPTION means the method of determining the amount of the
          Insurance Benefit with respect to a Loan set forth in Section V., C.,
          2.


                                       P-9

<PAGE>

     EE.  PERSON means any individual natural person, or any corporation,
          partnership, association or other legally recognized entity.

     FF.  PHYSICAL DAMAGE means tangible damage to a Property that materially
          adversely affects the use, marketability, or value of the Property,
          whether caused by accident or otherwise, including, but not limited to
          damage caused by reason of fire, destruction of tangible property,
          defects in construction, land subsidence, earth movement or slippage,
          flood, earthquake, war, civil insurrection, or riot; and further,
          Physical Damage includes Environmental Impairment and the destruction
          or removal of chattel items that are considered part of the Property
          (see Section I., KK., [Property]) For purposes of this definition
          "material" shall mean an amount equal to or greater than $1,500.00
          such that the estimated cost to repair a Property is $1,500.00 or more
          before the exclusion set forth in Section III., G., (Physical Damage
          Exclusion) would apply to exclude coverage for a Loan. The presence of
          radon gas, lead paint or asbestos in the dwelling on the Property
          shall not be deemed to be Physical Damage.

     GG.  POLICY means this contract of insurance together with all
          Applications, all endorsements, and the Certificate Schedule, all of
          which are incorporated herein for all purposes.

     HH.  POSSESSION OF THE PROPERTY means actual and physical occupancy and
          control of the Property.

     II.  PRE-ARRANGED SALE means:

          1.   A sale of a Property, with the prior approval of the Company,
               arranged by the Insured (or by the Borrower and approved by the
               Insured) prior to foreclosure because of a Default by a Borrower,
               or by the Insured after foreclosure and before expiration of the
               Claim Settlement Period; or

          2.   A foreclosure or trustee's sale of a Property to a third party,
               or redemption from foreclosure, at a price equal to or greater
               than the minimum amount specified by the Company to be bid by the
               Insured at such sale.

     JJ.  PRE-ARRANGED SALE OPTION means the method of determining the amount of
          the Insurance Benefit with respect to a Loan set forth in Section V.,
          C., 3.

     KK.  PROPERTY means the real property and all improvements thereon
          including any chattel items (including any built-in appliances) which
          are noted in the Original Appraisal, including all replacements or
          additions thereto, together with all easements and appurtenances, all
          rights of access, all rights to us; as well as any co-ownership
          interests in common areas, recreational and appurtenant facilities,
          and all replacements or additions thereto.

     LL.  RESIDENTIAL means:


                                      P-10

<PAGE>

          1.   A type of building which is designed for occupancy by not more
               than four families; or

          2.   A single-family condominium or planned unit development unit or

          3.   Any other single-family residence unit as to which Good and
               Merchantable Title may be held or conveyed freely under law, and
               which the Company has approved in writing.

     MM.  SERVICER means that Person, other than a natural Person, who at any
          time is servicing a Loan (as a master servicer, if subservicing is
          also involved) with respect to the Insured's obligations under the
          Policy. The Insured shall be presumed to be the Servicer unless the
          Company is notified otherwise.

     NN.  UNINSURED CASUALTY means Physical Damage to a Property which is either
          not covered by casualty insurance, or not covered in an amount
          sufficient to restore such Physical Damage to the Property.

     OO.  UNINSURED LOAN BALANCE means, at any time, with respect to a Loan, the
          estimated Claim Amount less the Insurance Benefit estimated pursuant
          to the Percentage Option.

     PP.  Any pronouns, when used herein, shall mean the single or plural,
          masculine or feminine, as the case may be.

II.  COVERAGE

     A.   EXTENSION OF AND LEVEL OF COVERAGE-- Extension of coverage to a Loan
          under this Policy shall be evidenced by issuance of a Certificate
          number on the Certificate Schedule. The Certificate Schedule and the
          Application for each Loan are incorporated herein by reference and
          made a part hereof for all purposes. The Policy is issued in reliance
          upon the Application and on the representations made in connection
          therewith. Coverage shall commence upon the payment of the initial
          premium, as of the Effective Date of the Certificate Schedule. The
          coverage level for each Loan shall be indicated on the Certificate
          Schedule.

     B.   INITIAL PREMIUM - On the Effective Date of the Certificate Schedule,
          the Insured shall forward the appropriate initial premium due to the
          Company to establish coverage as of the Effective Date.

     C.   PAYMENT OF RENEWAL PREMIUM - For coverage to be renewed, the entire
          renewal premium must be paid no later than the fifteenth (15th) day of
          the second month following the month in which each anniversary of the
          Effective Date occurs. For example, if the Effective Date was January
          12, renewal premium must be paid by March 15. The Company shall give
          the Servicer, if a Servicer is shown on the records of the Company, or
          otherwise, the Insured, notice of the renewal premium due date. If the
          renewal premium is not paid by the last day of the grace period
          provided above, then the liability of the Company shall terminate as
          of 12:01 a.m.


                                      P-11

<PAGE>

          on the later of the last anniversary of the Effective Date through
          which the premium has been paid, or, if a non-payment notice is
          required by applicable law, the last day of the cure period specified
          in such non-payment notice or as may be required by applicable law
          (the "Lapse Date"). However, failure to pay a renewal premium will not
          impair or terminate coverage for Defaults occurring prior to the Lapse
          Date. Notwithstanding the foregoing, if the renewal premium is not
          paid by the last day of the above-stated grace period and such. Loan
          is among a group of Loans whose coverage has lapsed due to the
          transfer, seizure or surrender of the servicing for such Loans, the
          Insured shall have an additional sixty (60) day grace period in which
          to pay the renewal premium for such Loan.

     D.   FULL PREMIUM PAYMENT - The Company shall have the right to hold in a
          suspense account for up to ninety (90) days any premium payment
          received, without obligation to apply such premium to coverage while
          any of the following circumstances exist:

          1.   The payment received is less than the full amount of the premium
               due with respect to a Certificate;

          2.   Information received with the payment is insufficient to identify
               the Loan to which the payment applies.

          At the end of the ninety (90) day period if the Company has not been
          able to resolve the suspended premium payment with the Insured, then
          the Company shall either refund the payment or be deemed to have
          accepted and applied it without lapse of coverage. Where the Company
          has received notice that there is a Servicer for a Loan then, if a
          premium is refunded, the Insured shall be notified that such refund
          was made and shall have sixty (60) days from such notice to cure or
          perform the conditions precedent to coverage.

     E.   CANCELLATION BY THE INSURED OF COVERAGE FOR A LOAN - The Insured may
          cancel coverage with respect to a Loan by making a request for
          cancellation to the Company in writing or via any medium acceptable to
          the Company. Upon receipt thereof, for coverage having refundable
          premiums, the Company shall refund such sum as may be determined to be
          due in accordance with the appropriate cancellation or premium
          schedule. The Company reserves the right to net out any unpaid premium
          from any premium refund. However, no refund on a Certificate will be
          paid if a notice of Default has been filed unless the Insured waives
          its rights to the Insurance Benefit with respect to that Loan.
          Cancellation of coverage for a Loan will not cancel this Policy.

     F.   CANCELLATION OF POLICY - Once coverage has become effective with
          respect to a Loan, this Policy may not be canceled by the Company for
          as long as any Certificate assigned under this Policy remains in
          force. If the Insured desires to cancel this Policy, it may do so by
          canceling all outstanding Certificates that have been issued under
          this Policy.


                                      P-12

<PAGE>

     G.   LOAN MODIFICATIONS - Unless prior written approval is obtained from
          the Company, the Insured shall not make any change in the terms of any
          Loan including, but not limited to, any change in the amount of the
          indebtedness, the interest rate, the use of escrow funds or other
          funds, term or amortization schedule of the Loan, change in the
          Property, nor release any Borrower from liability on a Loan, provided,
          however, that changes in the Loan permitted by the instrument
          evidencing the Loan shall be deemed approved without prior approval.

     H.   ASSUMPTIONS AND BALLOON RESTRUCTURES - The renewal or restructure of a
          Loan at the maturity of a Balloon Payment (hereinafter defined) and
          the assumption of a Loan by a purchaser of the Property, with or
          without the release of the original Borrower, are changes to a Loan
          requiring the Company's prior approval as set forth in Section II.,
          G., (Loan Modifications) above, provided, however, that if under
          applicable law, the Insured cannot enforce the "Due on Sale" provision
          of a Loan, then the Company will be deemed to have approved the
          assumption of such Loan. Notwithstanding anything to the contrary in
          this Section IL, H., the Company will be deemed to have approved the
          assumption of any Loan where no release is requested and under Section
          11-406.02 of the Federal National Mortgage Association's Servicing
          Guide or any successor provision thereof, or any similar provision of
          the Federal Home Loan Corporation's Sellers' & Servicers' Guide, the
          assumption is an "exempt transaction" that the Servicer is to approve
          without review of the terms of the transaction.

     I.   INCREASE IN LOAN AMOUNT - In addition to the approval requirement of
          Section IL, G., (Loan Modifications) above, if the principal balance
          of a Loan is increased (excluding any Negative Amortization), the
          Insured shall pay an additional premium corresponding to the increase
          in coverage, at the then prevailing premium rate.

     J.   APPROVAL OF LOAN MODIFICATIONS - The Company shall not unreasonably
          withhold any approval required to be obtained in connection with any
          of the changes listed in Sections II., G., and H.,; however, failure
          by the Insured to obtain any such approval with respect to any Loan
          shall constitute a waiver of coverage for that Loan and the Company
          shall refund premium for the period following such waiver.

     K.   SERVICING - The Loans will be serviced by one of five servicers
          qualified and approved by the Company and the Insured. Unless the
          prior written approval of the Company is obtained, the Servicing of
          any of the Loans may not be transferred, sold, or assigned unless such
          transfer, sale or assignment is approved in writing by the Company.
          The Company shall not unreasonably withhold approval of a proposed
          servicer. The Company's approval shall be deemed to be given for the
          transfer, sale or assignment of all or part of the Loans to a
          federally insured bank or savings association, an institutional
          investor, the Federal Horne Loan Mortgage Corporation ("Freddie Mac"),
          Fannie Mae, or to a Fannie Mae or Freddie Mac approved mortgage
          banker, provided that notice of the same is given as required by this
          paragraph.


                                      P-13

<PAGE>

     L.   CHANGE OF INSURED - If all of the Loans are transferred, sold or
          assigned by the Insured, coverage will continue PROVIDED THAT (a)
          notice thereof is given to the Company within thirty (30) days of such
          change, (b) the change in ownership, however denominated, is not
          occasioned by the redemption, repurchase, cancellation or other method
          of extinguishing the transaction pursuant to which the Loans were
          securitized, and (c) the Company approves the change in writing. The
          Company shall not unreasonably withhold approval of an new Insured.

     M.   COORDINATION AND DUPLICATION OF INSURANCE BENEFITS -

          1.   If any portion of a Loan is uninsured, all payments made by the
               Borrower on the Loan shall be allocated to the insured portion of
               the Loan in the same ratio as the insured principal amount beats
               to the total principal amount of the Loan. The Insurance Benefit
               hereunder shall likewise be calculated on the same pro rata
               basis.

          2.   The Insured shall not carry duplicate mortgage guaranty insurance
               (other than mortgage guaranty pool insurance or supplemental
               mortgage guaranty insurance) on any Loan.

          3.   If at the time of Default there is any other valid and
               collectible insurance in effect for the Loan which would attach
               if this insurance were not in effect, then the coverage under
               this Policy shall apply only as excess coverage and in no event
               as contributing insurance.

     N.   MITIGATION OF LOSS - The Insured and its Servicer shall attempt to
          limit and mitigate loss by adhering to customary servicing standards
          applicable to delinquent Loans, which may include in appropriate
          cases, but is not limited to, trying to obtain a cure of Defaults and
          trying to effectuate a Pre-Arranged Sale or voluntary conveyance of
          the Property. The Insured shall permit the Company to participate in
          workout activities for any Loan in Default. Failure of the Insured to
          materially comply with this Section IL, N., with respect to any Loan
          shall entitle the Company to adjust the Claim Amount by the amount the
          Company was damaged by such noncompliance. The Company shall attempt
          to limit and mitigate any loss to the Insured which will not be
          covered by the Insurance Benefit provided under this Policy.

III. EXCLUSIONS FROM COVERAGE

     The Company shall not be liable for, and the Policy shall not apply to,
     extend to or cover the exclusions listed below. In the event that coverage
     is excluded for any Loan, the Company will refund all premium for that Loan
     for the period following the occurrence of the event giving rise to such
     exclusion. Except where prohibited by law, if the damage to the Company
     arising from an excluded event can be reasonably quantified, the Company
     shall adjust the Claim Amount by the amount of such damage rather than
     exclude coverage altogether for such Loan, unless a refund of premium as
     provided for in the preceding sentence would provide a greater payment to
     the Insured.


                                      P-14

<PAGE>

     A.   BALLOON PAYMENT EXCLUSION - Any Claim arising out of or in connection
          with the failure of the Borrower to make any payment of principal and
          interest due under the Loan, which payment becomes due when the
          Insured exercises its right to call the Loan when not in default or
          because the term of the Loan is shorter than the amortization period,
          and which payment is for an amount more than twice the regular
          periodic payment of principal and interest that are set forth in the
          Loan (commonly referred to as a "Balloon Payment"); provided, however,
          that this Exclusion shall not apply if the Insured or its Servicer
          offers the Borrower in writing, before the due date of the Balloon
          Payment, a renewal or extension of the Loan, or a new loan at then
          current market rates, in an amount not less than the then outstanding
          principal balance and with no decrease in the amortization period and
          the Borrower declines to seek such renewal or refinancing.

     B.   EFFECTIVE DATE EXCLUSION - Any Claim resulting from a Default
          occurring before the Effective Date of the Policy or after its lapse,
          cancellation, or expiration; or after coverage is canceled with
          respect to the Loan.

     C.   INCOMPLETE CONSTRUCTION EXCLUSION - Any Claim when, as of the date of
          such Claim, construction of the Property had not been completed in
          accordance with the construction plans and specifications approved by
          the Loan originator at the time the Loan was originated or in
          accordance with the Original Appraisal. (This Incomplete Construction
          Exclusion shall not apply if the construction of the Property has been
          fully completed and, if Physical Damage occurs during construction,
          any repairs necessary to restore the Property to its complete
          condition, reasonable wear and tear excepted, have been completed.)
          However, coverage for a Default occurring during construction may be
          excluded by Section III., B., (Effective Date Exclusion) above.

     D.   RESIDENTIAL PROPERTY EXCLUSION - Any Claim where the Property is not,
          as of the date the Loan is Closed, on the Effective Date, and on the
          date the Claim is filed, Residential real property.

     E.   NEGLIGENCE AND FRAUD EXCLUSION - Any Claim involving or arising out of
          or any Claim where the origination of the Loan or extension of
          coverage hereunder involved or arose out of, any dishonest,
          fraudulent, criminal, or knowingly wrongful act (including error or
          omission) by the Insured, the Servicer or any agent of the Insured or
          Servicer; or any Claim involving or arising out of the negligence of
          the Insured or the Servicer, which negligence is material either to
          the acceptance of the risk or to the hazard assumed by the Company.

     F.   NON-APPROVED SERVICER EXCLUSION - Any Claim occurring when the
          Servicer, at the time of Default or thereafter, was not approved by
          the Company, provided, however, that this Non-Approved Servicer
          Exclusion shall not apply to any Loan for which a Default occurs
          within 150 days after the Company withdraws approval of the Servicer
          for such Loan. If the Company decides to withdraw approval of a
          Servicer it shall give written notice of that decision to the Insured
          for each affected Loan as shown in the Company's records.


                                      P-15

<PAGE>

     G.   PHYSICAL DAMAGE EXCLUSION - Any Claim where there is Physical Damage
          to the Property, occurring or manifesting itself after the Effective
          Date; provided, however, that this exclusion will not apply (i.e., the
          Company will provide coverage for a Claim) where Physical Damage has
          occurred to the Property if:

          1.   The Default giving rise to a Claim was not primarily caused by an
               Uninsured Casualty occurring prior to such Default, and the
               Company has elected to pay either the Percentage Option or the
               Pre-Arranged Sale Option as the Insurance Benefit for the Loan;
               or

          2.   The Property has been restored to its condition as reported in
               the Original Appraisal (as fully completed), reasonable wear and
               teat excepted. The Insured may elect to accept a reduction in the
               Claim Amount by an amount equal to the estimated cost to
               completely restore the Property as would otherwise be required by
               this exclusion rather than be required to restore the Property to
               obtain an Insurance Benefit under this Policy. In the event the
               Company relies on an estimate for such restoration that is not
               obtained by the Insured, then the Company shall, at the request
               of the Insured, provide a copy of such estimate to the Insured.

     H.   LOAN TO VALUE RATIO EXCLUSION - Any Claim where the original principal
          balance of the Loan exceeded one hundred percent (100%) of the FMV of
          the Property at the time the Loan was originated, and such fact was
          not disclosed to the Company at the time coverage under this Policy
          was extended to such Loan.

     I.   NEGATIVE AMORTIZATION EXCLUSION - Unless otherwise endorsed, any
          Negative Amortization with respect to a Loan.

     J.   DEFENSES TO LOAN EXCLUSION - That portion of any Claim equal to the
          amount of the indebtedness from which the Borrower is released, or any
          Claim against which the Borrower successfully asserts defenses that
          have the effect of releasing, in whole or in part, the Borrower's
          obligations to repay the Loan, provided, however, this Defenses to
          Loan Exclusion shall not apply where the release of the Borrower is
          the result of a bankruptcy "cram down" so long as the Insured has
          continued to pay premium on the full amount of the indebtedness and
          that all other conditions of this Policy have met.

     K.   ENVIRONMENTAL IMPAIRMENT EXCLUSION - Any Claim where there is
          Environmental Impairment to the Property which existed prior to the
          Effective Date if the existence, or suspected existence, of the
          Environmental Impairment was not disclosed in the Application and the
          Environmental Impairment (i) is a principal cause of the Default, and
          (ii) has made the principal Residential structure on the Property
          uninhabitable. A structure will be considered "uninhabitable" if
          generally recognized standards for residential occupancy are violated
          or if, in the absence of such standards, a fully informed and
          reasonable person would conclude that such structure was not safe to
          live in without fear of injury to health or safety. Notwithstanding
          the foregoing, this exclusion shall not


                                      P-16

<PAGE>

          apply if the Insured has removed or remedied the condition that
          constitutes the Environmental Impairment or the Insured has removed
          the hazardous character of such condition in accordance with
          applicable federal, state or local laws.

IV.  CONDITIONS PRECEDENT TO PAYMENT OF CLAIM

     The following Claim payment procedures contain the conditions precedent to,
     and additional limitations upon the Company's obligation to pay Insurance
     Benefits under this Policy:

     A.   NOTICE OF DEFAULT - The Insured shall give the Company notice:

          1.   Within forty-five (45) days of Default, if it occurs when the
               first payment is due under a Loan; or

          2.   Not later than the last business day of the month following the
               month in which the first of the following events occur:

               a.   The date when the Borrower becomes three (3) periodic
                    payments in Default on the Loan if the periodic payments are
                    made monthly, and not later than ninety (90) days after the
                    occurrence of a Default for Loans having periodic payments
                    more often than once a month; or

               b.   Foreclosure or other Appropriate Proceedings have been
                    commenced.

          Such notice shall be on forms provided by or approved by the Company
          or via a medium acceptable to the Company. Unavailability of Company
          forms is not a valid reason for delay in reporting. Failure to report
          a Default as required by this Section IV., B., shall entitle the
          Company to deduct from the Claimable Amount of a Claim thirty (30)
          days of interest accruing on the Loan during the period between the
          date the notice of Default should have been filed and the date it was
          submitted to the Company.

     B.   MONTHLY REPORTS - Following a notice of Default on a Loan or the
          commencement of Appropriate Proceedings, the Insured shall give the
          Company monthly reports on forms furnished or approved by the Company
          or via a medium acceptable to the Company, on the status of the Loan
          and on the servicing efforts undertaken to remedy the Default or
          conclude the Appropriate Proceedings. These monthly reports shall
          continue until the Borrower is no longer in Default, the Appropriate
          Proceedings terminate, or until title to the Property has been
          transferred to the Insured.

     C.   COMPANY'S OPTIONS AFTER NOTICE OF DEFAULT - If the Company so directs,
          at any time after receiving the Insured's notice of Default, the
          Insured shall file a Claim within twenty (20) days and the Company may
          elect to pay the Insurance Benefit pursuant to the Percentage Option.
          Thereafter, following the Insured's acquisition


                                      P-17

<PAGE>

          of the Borrower's Tide to the Property, the Insured shall be entitled
          to file a supplemental Claim in an amount equal to the sum of the
          Advances not included in the initial Claim, plus any Deficiency
          Expenses (See Section I.,R.) subject to the limitations and deductions
          of Section V., B., (Calculation of Claim Amount) and such supplemental
          Claim shall be paid by the Company in accordance with the Percentage
          Option.

     D.   VOLUNTARY CONVEYANCE - The Insured may accept a conveyance of title
          from the Borrower in lieu of foreclosure or other proceedings if:

          1.   The ability of the Insured to preserve, transfer and assign to
               the Company the Insured's rights against the Borrower is not
               impaired; and

          2.   The rights of the Company under this Policy against such Borrower
               are not adversely affected; or if

          3.   The written approval of the Company has been obtained; provided,
               however, it is understood that such approval shall not constitute
               nor be deemed an admission of liability by the Company with
               respect to coverage for the related Loan.

     E.   APPROPRIATE PROCEEDINGS - The Insured MUST begin Appropriate
          Proceedings when the Loan becomes six (6) months in Default unless the
          Company provides written instructions that some other action be taken.
          The Company reserves the right to direct the Insured to institute
          Appropriate Proceedings at any time after Default. When either
          defending against or bringing Appropriate Proceedings, the Insured
          shall report the status of these proceedings to the Company as
          reasonably and expeditiously as possible.

          In conducting Appropriate Proceedings, the Insured shall:

          1.   Diligently pursue the Appropriate Proceedings once they have
               begun;

          2.   Apply for the appointment of a receiver and assignment of rents,
               if permitted by law, requested by the Company, and appropriate
               for the Property;

          3.   At the request of the Company, furnish the Company with copies of
               all notices and pleadings filed or required in the Appropriate
               Proceedings;

          4.   Act so that its ability to preserve, transfer and assign to the
               Company its rights against the Borrower is not impaired; and so
               that the rights of the Company under this Policy against the
               Borrower are not adversely affected, including any rights to
               obtain a deficiency judgment, provided that the Insured shall not
               be required to pursue or establish a deficiency against the
               Borrower in those states where the Company is not permitted to
               pursue such a deficiency;


                                      P-18

<PAGE>

          5.   Bid an amount at the foreclosure sale which is not less than the
               minimum amount nor more than the maximum amount set forth below,
               unless the Company notifies the insured of other instructions or
               waives its right to give bidding instructions, in writing.

               a.   If the FMV of a Property is less than the Uninsured Loan
                    Balance, the Insured AA start bidding at not less than the
                    FMV of the Property and may continue bidding up to a maximum
                    of the Uninsured Loan Balance.

               b.   If the FMV of a Property is greater than the Uninsured Loan
                    Balance, the Insured shall start bidding at not less than
                    the Uninsured Loan Balance up to a maximum amount equal to
                    the Claim Amount.

               If other bidding instructions are provided they will not specify
               a maximum bid that is less than the Uninsured Loan Balance, and,
               if the Property is subject to redemption for less than the
               outstanding amount of the Loan, then such other bidding
               instructions will not specify an opening bid of less than the
               Uninsured Loan Balance.

     F.   PRE-ARRANGED SALES - In the event of Default on a Loan, it shall be a
          condition precedent to payment of any Insurance Benefit on the Loan
          that (i) the Insured attempt to obtain a Pre-Arranged Sale of the
          Property whenever reasonable, and (ii) the Insured shall authorize its
          broker, when requested by the Company, to release marketing
          information for the Property to the Company, if requested by the
          Company, unless the Insured shall have notified the broker that the
          Company's right to acquire the Property has expired or been waived.
          For purposes of this section, a "Pre-Arranged Sale Offer" means an
          offer to purchase the Property received by the Insured, together with
          a schedule of (i) expense items proposed by the Insured to be included
          in the settlement amount of the Pre-Arranged Sale Offer is accepted
          and the proposed Property sale doses, and (ii) the Insured's then
          estimated amounts thereof. Pre-Arranged Sale Offers that the Insured
          chooses to submit to the Company will be approved or rejected by the
          Company.

     G.   CLAIM REQUIREMENTS - The Insured must provide the Company with:

          1.   A completed form furnished or approved by the Company for payment
               of a Claim ("Claim for Loss Form"); and

          2.   All information reasonably requested on the Claim for Loss Form
               together with all documentation requested on or necessary to
               complete such Claim for Loss Form; and

          3.   Evidence satisfactory to the Company that the Insured has
               acquired the Borrower's Title to the Property, except where the
               Company has elected the Pre-Arranged Sale Option provided,
               however, if the primary cause of


                                      P-19

<PAGE>

               the Default was a circumstance or event which would prevent the
               Insured from obtaining Good and Merchantable Title, then no
               matter which settlement option the Company elects, the Insured
               must comply with the requirements of Section IV., G., 4, as if
               the Company had elected the Acquisition Option; and

          4.   In the event the Company elects the Acquisition Option, a
               recordable deed in normal and customary form containing the usual
               warranties and covenants conveying to the Company or its designee
               Good and Merchantable Title to the Property, along with evidence
               satisfactory to the Company that the Insured has acquired and can
               convey to the Company or its designee Good and Merchantable Title
               to the Property; and

          5.   All other documentation or information reasonably requested by
               the Company for purposes of investigating and/or adjusting the
               Claim; and

          6.   Access to the Property for purposes of determining its value, and
               for investigating and/or adjusting the Claim; provided, however,
               if the Company elects the Acquisition Option, then Possession of
               the Property must be provided by the Insured, unless the Company
               waives this requirement in writing.

V.   LOSS PAYMENT PROCEDURE

     A.   FILING OF CLAIM - The Insured shall file a Claim no later than sixty
          (60) days after the earlier of acquiring the Borrower's Title to the
          Property or a Pre-Arranged Sale, provided that if the Company elects
          to acquire the Property, then no later than sixty (60) days after the
          Insured acquires Good and Merchantable Tide to the Property. Failure
          of the Insured to file a Claim within this time period shall (i)
          relieve the Company of any obligation to include in the Claim Amount
          interest and Advances accruing on the Loan after such sixty (60) day
          period has expired, and (n) entitle the Company to adjust such Claim
          to the extent that the Company is prejudiced by such late filing of
          the Claim, up to 100% of the Insurance Benefit.

          Unavailability of Company forms is not a valid reason to delay filing
          a Claim. If a Claim filed by the Insured is incomplete the Company
          shall within twenty (20) days of receipt of a Claim, notify the
          Insured of all items needed to perfect such Claim. If no notice of
          deficiency of the Claim is sent within the twenty (20) day period
          following receipt of the Claim by the Company, then the Claim shall be
          deemed to be perfected as of the date the Company received the Claim.

     B.   CALCULATION OF CLAIM AMOUNT - The Claim Amount for any Loan shall be
          an amount equal to the sum of:

          1.   The Default Amount but excluding any portion of the principal
               balance attributable to any increase therein after the first
               payment is due and payable, and excluding capitalized penalty
               interest or late payment


                                      P-20

<PAGE>

               charges. (See Section III., I., (Negative Amortization Exclusion)
               THIS POLICY DOES NOT COVER NEGATIVE AMORTIZATION UNLESS SUCH
               COVERAGE IS ENDORSED FOR A LOAN); and

          2.   The amount of accumulated delinquent interest due on the Loan at
               the contract rate stated in the Loan from the date of Default
               through the date that the Claim is submitted to the Company, but
               excluding applicable late charges and penalty interest;
               additional interest computed on the Default Amount until the
               Pre-Arranged Sale of the Property, and thereafter until the
               Pre-Arranged Sale closing information is submitted, computed on
               the Default Amount reduced by the net proceeds of such
               Pre-Arranged Sale (For purposes of this Section, "late charges
               and penalty interest" includes, but is not limited to, increases
               in interest rate caused by non-performance of the Borrower. In no
               event will the Claim Amount include interest at a rate other than
               what the Insured would receive if the Loan were paid as current
               in accordance with its own terms); and

          3.   The amount of Advances made by the Insured; provided that

               a.   Attorney's fees advanced thereunder shall not exceed three
                    percent (3%) of the sum of the (1) and (2) above; and

               b.   Payment for Advances other than Attorney's fees, shall be
                    prorated through the earlier of the date the Claim is
                    submitted to the Company or the Pre-Arranged Sale of the
                    Property;

          less:

          4.   All rents and other payments (excluding proceeds of fire and
               extended coverage insurance and proceeds of a Pre-Arranged Sale)
               collected or received by the Insured, which are derived from or
               in any way related to the Property;

          5.   The amount of cash available to the Insured remaining in any
               escrow account as of the last payment date;

          6.   The amount of cash to which the Insured has retained the tight of
               possession as security for the Loan; and

          7.   The amount paid under applicable fire and extended coverage
               policies which has not been applied to either the restoration of
               the Property, if the Property suffered Physical Damage, or to the
               payment of the Loan; and

          8.   The amount expended by the Insured for Advances requiring
               approval by the Company which are not in compliance with the
               Company's guidelines and which have not been approved by the
               Company.


                                      P-21

<PAGE>

     C.   PAYMENT OF INSURANCE BENEFIT - The Company, at its sole option, shall
          elect one of the following three options and pay to the Insured, on or
          before the last day of the Claim Settlement Period, as the Insurance
          Benefit, either.

          1.   The Acquisition Option which shall equal the Claim Amount less
               the amount of any payments of Loss previously made by the Company
               with respect to the Loan, payable in exchange for the conveyance
               of Good and Merchantable Tide to and Possession of the Property;
               provided, however, that if the Insured is unable to perform any
               conditions precedent to payment of a Claim within the later of
               thirty (30) days after the redemption period or ninety (90) days
               after the Claim Adjustment Period, then, so long as the Claim is
               not otherwise excluded, the Insured may retain title to the
               Property and the Insurance Benefit under this Acquisition Option
               shall be an amount equal to the Company's Anticipated Loss in
               connection with such Property ; or

          2.   The Percentage Option which is an amount equal to the Claim
               Amount multiplied by the percentage of coverage specified in this
               Policy, or

          3.   The Pre-Arranged Sale Option is an amount equal to the lesser of
               the Percentage Option or the Insured's actual loss in connection
               with a Pre-Arranged Sale of the Property. The Insured's actual
               loss shall be an amount equal to the Claim Amount plus all
               reasonable costs incurred in obtaining and closing such sale less
               the proceeds of the Pre-Arranged Sale.

          In addition to payment under one of the foregoing options, the Company
          will pay whatever Deficiency Expenses are payable to the Insured
          pursuant to Section V., D. (Deficiency Expenses).

          In the event that a Pre-Arranged Sale fails to close prior to the end
          of the Claim Settlement Period, the Company may postpone payment of
          the Insurance Benefit for up to (90) ninety days, or if earlier, until
          such Pre-Arranged Sale doses or is terminated, provided that interest
          on the Default Amount at the rate due upon the Loan during such
          postponement is paid to the Insured.

          Further, in the event the Property is redeemed after the payment of
          the Percentage Option, the Insured shall be obligated to promptly
          refund to the Company the amount, if any, by which the redemption
          price plus the Insurance Benefit exceeds the Claim Amount.

          In the event the Company does not pay the Insurance Benefit within the
          Claim Settlement Period, it will pay interest on the Insurance Benefit
          at the rate due under the Loan from the last day of the Claim
          Settlement Period until the Claim is paid.

     D.   DEFICIENCY EXPENSES - Notwithstanding the provisions of Section V.,
          C., (Payment of Insurance Benefit) above, in the case where a
          deficiency against the Borrower is being pursued solely at the request
          of the Company, then any


                                      P-22

<PAGE>

          Deficiency Expenses shall be added to the amount of the Insurance
          Benefit. If a deficiency against a Borrower is being pursued as part
          of Appropriate Proceedings, for the benefit of both the Insured and
          the Company, then at the time such deficiency rights are established
          or a deficiency judgment is obtained, whichever shall occur first, the
          Deficiency Expenses plus any similar expenses incurred by the Company
          in connection with such deficiency shall be settled between the
          parties on the same pro rata basis set forth in Section VI., B.
          (Subrogation) for the settlement of deficiency recoveries. Expenses
          and costs arising after that point shall be treated as collection
          expenses to be netted against the deficiency recovery, if any, (and,
          if none, to be shared between the parties on the same pro rata basis
          when it becomes clear that nothing will be recovered).

          To facilitate the decision of whether to pursue or establish a
          deficiency against a Borrower, the Insured shall provide the Company
          with any information it may have relevant to collecting on a
          deficiency judgment for that case. The Company will discuss all such
          information it may have with the Insured so that the parties can
          decide whether any Appropriate Proceedings (necessary to establishing
          or pursuing a deficiency) are to be pursued for the benefit of both
          parties or whether one of the parties will elect not to participate in
          any recovery. The Insured will be deemed to be participating in
          Appropriate Proceedings solely at the request of the Company when such
          proceedings are not a condition precedent to obtaining Borrower's
          Title to or Possession of a Property and, after the parties have
          exchanged information on the Loan, the Insured has advised the Company
          in writing why the Insured does not wish to participate in such
          proceedings.

     E.   DISCHARGE OF OBLIGATION - Any payment by the Company in accordance
          with Section V., C., (Payment of Insurance Benefit) and, if
          applicable, Section V., D., (Deficiency Expenses). or Section IV., C.,
          (Company's Options after Notice of Default), taking into account
          appropriate adjustments, shall be a full and final discharge of the
          Company's obligation under this Policy with respect to the related
          Loan. Notwithstanding the preceding sentence, the Company shall not be
          relieved of its obligation to pay any appropriate supplemental Claims
          filed pursuant to Section IV., C., (Company's Options after Notice of
          Default) or as may otherwise be agreed to by the Company.

VI.  ADDITIONAL CONDITIONS

     A.   PROCEEDINGS OF EMINENT DOMAIN - In the event that part or all of the
          Property is taken by eminent domain, condemnation or by any other
          proceedings by federal, state or local governmental unit or agency,
          the Insured shall require that the Borrower apply the maximum
          permissible amount of any compensation awarded in such proceedings to
          reduce the principal balance of the Loan, in accordance with the law
          of the jurisdiction where the Property is located.

     B.   SUBROGATION - The Company shall be subrogated pro rata, to the full
          extent permitted by law (except where the Company is prohibited by law
          from pursuing recovery of a Loan), to all of the Insured's Recovery
          Rights with respect to a


                                      P-23

<PAGE>

          Loan, upon payment of a Claim hereunder. "Recovery Rights" shall mean
          all rights of recovery against the Borrower and any other Person or
          organization relating to the Loan or to the Property. The Company's
          pro rata share of the net deficiency recovered (i.e., amounts
          recovered less reasonable costs and expenses) with respect to any Loan
          shall be the amount of the Insurance Benefit divided by the amount of
          the deficiency judgment. Internal staff costs and overhead expenses
          shall not be deducted in determining the amount of a net deficiency
          recovery unless specifically agreed to in writing by the parties.

          The Insured hereby designates the Company its exclusive agent (i) to
          pursue all of the Insured's Recovery Rights to which the Company has
          not become subrogated by payment of a Claim (i.e., the Insured's share
          of the Recovery Rights), (ii) to file any action in the Company's name
          as assignee of the Insured, to collect on the Insured's Recovery
          Rights, and (iii) to settle and compromise any such Recovery Rights on
          behalf of the Insured, it being understood and agreed that the Company
          shall have the exclusive rights to pursue and settle all Recovery
          Rights for any Loan on which a Claim payment is made hereunder, unless
          waived in writing by the Company. If the Company decides not to pursue
          Recovery Rights with respect to a Loan, then the Company shall issue a
          written waiver of its subrogation and management rights to the
          Insured. The Insured shall execute and deliver at the request of the
          Company such instruments and documents, and undertake such actions as
          may be necessary to transfer, assign and secure such Recovery Rights
          to the Company. The Insured shall refrain from any action, either
          before or after payment of a Claim hereunder that shall prejudice such
          Recovery Rights.

          Notwithstanding any provision in the foregoing paragraph to the
          contrary, in the event the Insured has, in addition to Recovery Rights
          against a Borrower or any other Person, a claim or claims against such
          Borrower or other Person not related to the Recovery Rights, then the
          Insured shall have the right to pursue in its own name all the
          Recovery Rights in conjunction with the Insured's other claim or
          claims, and the Company will waive its right to manage the pursuit of
          the Recovery Rights.

          The execution by the authorized party, even if it be a party other
          than the Insured, of a release or waiver of the right to collect the
          unpaid balance of a Loan, if it has such effect, shall release the
          Company from its obligations hereunder to the extent and amount of
          such release or waiver, unless the Company is prohibited by law from
          pursuing recovery of such Loan.

     C.   REPRESENTATIONS AND RELIANCE; INCONTESTABILITY - All statements made
          by the Insured, the Services, the Borrower or any other Person in any
          part of the Application, including the Original Appraisal, plans and
          specifications, or any exhibits or documents submitted therewith, are
          deemed to be the Insured's representations. The Company has issued
          this Policy and has extended coverage to each Loan listed on the
          Certificate Schedule in reliance on the correctness and


                                      P-24

<PAGE>

          completeness of such representations as made or deemed to be made by
          the Insured.

          No Claim otherwise payable under this Policy with respect to a Loan
          will be denied, nor will the coverage for such Loan be rescinded,
          based on any misrepresentation in the Application made by the Borrower
          or any Person other than a First Party, once twelve (12) regularly
          scheduled periodic payments have been made on that Loan from the
          Borrower's Own Funds.

          Notwithstanding the foregoing provisions of this Section VI., C.,, the
          Company will not be precluded from denying a Claim or rescinding
          coverage for a Loan where prior to the Borrower making twelve (12)
          regularly scheduled payments from the Borrower's Own Funds, the
          Company notifies the Insured in writing that the Company has
          sufficient evidence to establish a reasonable belief that there was a
          material misrepresentation made in the Application with respect to
          such Loan and the Company provides a reasonable description of such
          misrepresentation.

     D.   NOTICE - Premium payments are to be paid as provided in Sections II.,
          B., and C., and sent to the Company at the address listed on the
          Commitment, or as otherwise instructed by the Company in writing. All
          other notices, Claims, tenders, reports and other data required to be
          submitted to the Company by the Insured shall be either mailed
          postpaid, (ii) sent by overnight courier, (iii) transmitted
          electronically or via magnetic tape or other media in a manner
          approved by the Company, or (iv) sent by telephonic facsimile
          transmission, to the Company's home office at the following address
          and facsimile number:

          For Claim matters:

               PMI Mortgage Insurance Co.
               P.O. Box 193837
               San Francisco, California 94119
               Attention: Claim Department
               Facsimile Number: (415) 788-8593

          For Customer Service matters:

               PMI Mortgage Insurance Co.
               P.O. Box 3836
               San Francisco, California 94119
               Attention: Customer Service Department
               Facsimile Number: (415) 291-6191

          All notices to the Insured shall be given to the Servicer unless the
          Company has not been notified that a Loan is being serviced by a
          Person other than the Insured, and shall be either (i) mailed
          postpaid, (ii) sent by overnight courier, (iii) transmitted
          electronically or magnetically in a manner approved by the Insured, or
          (iv) sent by telephonic facsimile transmission, to the Servicer, at
          the address and


                                      P-25

<PAGE>

          facsimile number provided in writing by the Insured to the Company, or
          to the last known address and facsimile number for that Servicer,
          except that for facsimile transmissions, the Company shall confirm
          telephonically or otherwise the accuracy of the facsimile number used.
          Nonpayment notices under Section IL, C. and notices required under
          Section III., F. shall be sent to both the Insured and the Servicer
          whenever the Company has been notified that the Servicer is a Person
          other than the Insured. All notices to the Insured and Servicer will
          be sent to those Persons whom the Company was last notified as owning
          or servicing the Loan, respectively, at the last known address for
          such Persons as reflected in the records of the Company.

          Either party may notify the other of a change in address in the same
          manner as provided for giving notice. All notices, Claims, tenders,
          reports and other data required to be submitted to the Company or to
          the Insured shall be deemed to have been given five (5) days after the
          same is deposited in the U.S. Mail, delivered to an overnight courier,
          or transmitted in a manner approved above, unless actually received
          earlier. If the Insured requests that notices be sent to a third party
          other than the Insured and Servicer, the Company agrees to use its
          best efforts to give such notices but the Company shall not incur any
          liability for failure to send any notice to any third parties.

     E.   REPORTS AND EXAMINATIONS - As pertinent to any Loan or the Policy, the
          Company may call on the Insured for such reports as it may deem
          reasonably necessary, and may inspect the files, books and records of
          the Insured as they pertain to any Loan or to the Policy. The Company
          has the right to require that any information which the Insured is
          required to provide under this Policy be certified as to its
          truthfulness and accuracy by an officer or properly authorized
          employee of either or both the Insured and the Servicer.

     F.   ARBITRATION - Unless prohibited by applicable law, any controversy or
          dispute, including any Claim made hereunder, arising out of or
          relating to this Policy, may, upon the mutual consent of all parties
          to the dispute, be settled by binding arbitration in accordance with
          the title insurance rules of the American Arbitration Association in
          effect on the date the demand for arbitration is made. If this remedy
          is elected by all parties to the dispute, then the decision of the
          arbitrator(s) shall be final and binding on all the parties, and shall
          be enforceable in any court of competent jurisdiction in the United
          States of America.

     G.   SUIT -

          1.   No suit or action for recovery of any Claim or Insurance Benefit
               under this Policy shall be sustained in any court of law or
               equity unless the Insured has materially and substantially
               complied with the terms and conditions of this Policy, and unless
               the suit or action in equity is commenced within three (3) years
               or such longer period of time as may be required by applicable
               law, after (i) the Claim has been presented to the Company or
               (ii) the date on which the cause of action accrued, whichever is
               earlier. No


                                      P-26

<PAGE>

               suit or action on a Claim or Insurance Benefit may be brought
               against the Company until sixty (60) days have elapsed from the
               later of the date that the Insured is notified that Claim is
               perfected or from the date the Claim is deemed to be a Perfected
               Claim, unless the subject matter of the suit or action is whether
               a Perfected Claim has been filed.

          2.   If a dispute arises concerning the Loan and involving either the
               Property or the Insured, the Company has the right to protect its
               interest by defending any action arising from such dispute, even
               if the allegations involved are groundless, false or fraudulent.
               The Company is NOT REQUIRED to defend any lawsuit involving
               either the Insured, the Property or the Loan. The Company shall
               also have the right to direct the Insured to institute suit on
               the Insured's behalf, if this suit is necessary or appropriate to
               preserve the Company's rights in connection with a Loan or
               Property. If any litigation costs and expenses incurred by either
               the Company or the Insured under this Section VI., G., arise out
               of an action involving the negligent or wrongful conduct or
               breach of contract on the part of the Insured, then the Insured
               shall bear all such costs and expenses, and in all other cases,
               the Company shall bear such costs and expenses.

     H.   PARTIES IN INTEREST - This contract shall be binding upon and inure to
          the benefit of the Company and its successors and assigns and the
          Insured and its permitted successors and assigns. Neither the
          Borrower, nor any successive owner of a Property, nor any pool
          insurance carrier, nor any other Person is included or intended as a
          third party beneficiary to this Policy. Payments made to the Insured
          hereunder are intended as indemnification for actual loss and shall
          not affect nor impair the Insured's rights of recovery against the
          Borrower subject, however, to the provisions of Section VI., B.,
          (Subrogation). Because the Company and the Insured are the only
          parties to the Policy, they may agree to modify or amend or terminate
          this Policy or any Certificate without the consent of, or notice to,
          any Borrower, Servicer or any other Person.

     I.   AGENCY - Neither the Insured, its Servicer, its originators, nor any
          of their respective employees or agents shall be or shall be deemed to
          be agents of the Company, nor shall the Company be or be deemed to be
          an agent of the Insured or Servicer except to the extent of the
          Recovery Rights assigned to the Company pursuant to Section IV., B.,
          (Subrogation). The Servicer is deemed to be an agent of the Insured
          for all purposes under this Policy, including, but not limited to, for
          receiving notices, payments of Insurance Benefit, settling Claims, and
          performing acts required of the Insured under this Policy excepting
          for receipt of notices required under Section III., F., (Non-Approved
          Servicer).

     J.   GOVERNING LAW; CONFORMITY TO STATUTE - This Policy, including the
          Certificate Schedule, Claim or Insurance Benefit related to any Loan,
          shall be governed by the law of the jurisdiction in which the original
          named Insured is located as shown in on the face page hereof. Any
          provision of this Policy which is in conflict with


                                      P-27

<PAGE>

          the law of the aforesaid jurisdiction is hereby amended to conform to
          the minimum requirements of that law.

     K.   ELECTRONIC DATA. STORAGE - It is understood that the Company may store
          information, the contents or images of documents or other data on
          electronic media or other media generally accepted for business
          records (such as microfiche). The Company and Insured agree that the
          data stored on such electronic or other media are equally acceptable
          between the parties for all purposes as information, documents or
          other data maintained in printed or written form, including but not
          limited to, for the purposes of litigation or arbitration.

     L.   NO WAIVER - Except as provided in Section VI., C., Representations and
          Reliance; Incontestability, nothing contained in this Policy shall be
          deemed to waive or limit the Company's rights arising at law or in
          equity to rescind or reform this Policy or the Certificate in the
          event that material misrepresentations of fact or fraudulent
          statements were relied upon by the Company in issuing this Policy or
          extending coverage hereunder to any Loan.


                                      P-28

<PAGE>

                                    EXHIBIT Q

                             FORM OF SWAP AGREEMENT

                                  CONFIRMATION

DATE: ____________, 2005

TO:   Merrill Lynch Mortgage Investor Trust 2005-HE2 ("Counterparty")
      Telephone: 212.449.5893
      Fax: 212.449.7722
      Attn: Angela Gioia
      C/O: Wells Fargo Bank, N.A.
      Attention: Client Services Manager-MLMI 2005-HE2
      Tele: 410-884-2000
      Fax No.: 410-715-2380

FROM: The Bank of New York, NY ("BNY")
      Derivative Products Support Department
      32 Old Slip, 16th Floor
      New York, New York 10286
      Attn:  Dax Braga
      Phone #: 212-804-5161
      Fax #: 212-804-5818/5837

RE:   Transaction Reference Number: ________

     The purpose of this letter agreement ("Agreement") is to confirm the terms
     and conditions of the rate cap Transaction entered into on the Trade Date
     specified below (the "Transaction") between The Bank of New York ("BNY"), a
     trust company duly organized and existing under the laws of the State of
     New York and Merrill Lynch Mortgage Investor Trust 2005-HE2 (the
     "Counterparty") This Agreement, which evidences a complete and binding
     agreement between you and us to enter into the Transaction on the terms set
     forth below, constitutes a "Confirmation" as referred to in the "ISDA Form
     Master Agreement" (as defined below), as well as a "Schedule" as referred
     to in the ISDA Form Master Agreement.

     1. This Agreement is subject to the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). You and we have agreed to enter into this Agreement
in lieu of negotiating a Schedule to the 1992 ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") but,
rather, an ISDA Form Master Agreement, as modified by the Schedule terms in
Section 4 of this Confirmation (the "Master Agreement"), shall be deemed to have
been executed by you and us on the date we entered into the Transaction. Each
party hereto agrees that the Master Agreement deemed to have been executed by
the parties hereto shall be the same Master


                                       Q-1

<PAGE>

Agreement referred to in the agreement setting forth the terms of transaction
reference number 36976. In the event of any inconsistency between the provisions
of this Agreement and the Definitions or the ISDA Form Master Agreement, this
Agreement shall prevail for purposes of the Transaction.

2. The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:

<TABLE>
<S>                           <C>
Notional Amount:                        To be determined by the following
                              formula: Attached Schedule * 10

Trade Date:                   November 30, 2005

Effective Date:               July 25, 2006

Termination Date:                       November 25, 2010, subject to adjustment
                              in accordance with the Following Business Day
                              Convention.

FIXED AMOUNTS

Fixed Rate Payer:             Counterparty

Fixed Rate:                   _________%

Fixed Rate Day Count
   Fraction:                  30/360

Fixed Rate Payer
   Period End Dates:                    The 25th day of each month, beginning on
                              August 25, 2006 and ending on the Termination
                              Date, subject to adjustment in accordance with the
                              Following Business Day Convention with No
                              Adjustment.

Fixed Rate Payer
   Payment Dates:                       Early Payment shall be applicable. The
                              Fixed Rate Payer Payment Date shall be one (1)
                              Business Days preceding each Floating Rate Payer
                              Period End Date.

FLOATING AMOUNTS

Floating Rate Payer:          The Bank of New York

Floating Rate for initial
   Calculation Period:        To be determined

Floating Rate Day Count
   Fraction:                  Actual/360

Floating Rate Option:         USD-LIBOR-BBA
</TABLE>


                                       Q-2

<PAGE>

<TABLE>
<S>                           <C>
Designated Maturity:          One month

Spread:                       Inapplicable

Floating Rate Payer
   Period End Dates:                    The 25th day of each month, beginning on
                              August 25, 2006 and ending on the Termination
                              Date, subject to adjustment in accordance with the
                              Following Business Day Convention

Floating Rate Payer
   Payment Dates:                       Early Payment shall be applicable. The
                              Floating Rate Payer Payment Date shall be one (1)
                              Business Days preceding each Floating Rate Payer
                              Period End Date.

Reset Dates:                            The first day of each Calculation Period
                              or Compounding Period, if Compounding is
                              applicable.

Compounding:                  Inapplicable

Business Days for
   Payments By both
   parties:                   New York and London

Calculation Agent:            The Bank of New York

Additional Fees:              The Counterparty shall pay The Bank of New York
                              USD ___________ on November 30, 2005.

COLLATERAL PROVISIONS:        (a) On any Local Business Day (any such date
                              referred to as a "Credit Support Valuation Date"),
                              the Calculation Agent may determine the following:
                              (i) the Exposure (as defined below), (ii) the
                              market value (determined in accordance with the
                              Eligible Collateral Annex hereto) of all
                              Collateral (as defined in the Eligible Collateral
                              Annex), if any, pledged by a party, and (iii) the
                              Credit Support Amount (as defined below) for such
                              date. "Exposure" means for any Credit Support
                              Valuation Date, the amount, if any, that would be
                              payable to a party (the "Secured Party") by the
                              other party (the "Pledgor") (expressed as a
                              positive number) or by the Secured Party to the
                              Pledgor (expressed as a negative number) to
                              replace all of the Transactions that are or may be
                              entered into and governed by the Master Agreement
                              so as to preserve the economic equivalent of the
                              payment obligations of the parties with respect
                              thereto. "Credit Support Amount" means the Secured
                              Party's Exposure plus, the aggregate of the
                              Initial Collateral Requirements (as set forth in
</TABLE>


                                       Q-3

<PAGE>

<TABLE>
<S>                           <C>
                              paragraph (b) below and as expressed in
                              Confirmations in connection with other
                              Transactions, if any), applicable to the Pledgor,
                              if any, minus the aggregate of the Initial
                              Collateral Requirements applicable to the Secured
                              Party, if any. If the Credit Support Amount
                              exceeds the market value of all Collateral held by
                              the Secured Party by an amount (the "Delivery
                              Amount") equal to or greater than USD _____, then
                              the Pledgor shall transfer to the Secured Party
                              Collateral with a market value equal to or greater
                              than the Delivery Amount. If the market value of
                              all Collateral held by the Secured Party exceeds
                              the Credit Support Amount by an amount (the
                              "Return Amount") equal to or greater than USD
                              ______, then the Secured Party shall return to the
                              Pledgor Collateral with a market value as close as
                              practicable (but not greater than) the Return
                              Amount. Each delivery or return of Collateral
                              required under this paragraph shall be made by the
                              close of business on the relevant Credit Support
                              Valuation Date if notice requesting such delivery
                              or return is received by 11 A.M. New York City
                              time, or by the next Local Business Day if notice
                              is received after 11 A.M. New York City time. For
                              the avoidance of doubt, only BNY shall be required
                              to post collateral in accordance with the
                              provisions hereunder.

                              (b) In addition to any Collateral required to be
                              delivered pursuant to paragraph (a) above, each
                              party shall deliver to and at all times maintain
                              with the other party Collateral having a market
                              value equal to or greater than USD ____ (such
                              amount being the "Initial Collateral Requirement"
                              applicable to such party). The party providing the
                              Initial Collateral Requirement shall deliver such
                              collateral to the other party on or before the
                              Local Business Day following the Trade Date.

                              (c) These Collateral Provisions shall be deemed a
                              security agreement, and notwithstanding anything
                              to the contrary contained in the Executed Master
                              Agreement or this Confirmation, these provisions
                              shall be governed by the laws of the State of New
                              York, without giving effect to the conflicts or
                              choice of law provisions thereof. Notwithstanding
                              anything to the contrary set forth in this
                              Confirmation or the Master Agreement, in the event
                              of any inconsistency between the Master Agreement
                              and these Collateral Provisions, the Master
                              Agreement shall prevail, except as set forth in
                              the preceding sentence. Any party pledging
                              Collateral hereunder hereby grants a first
                              priority
</TABLE>


                                       Q-4

<PAGE>

<TABLE>
<S>                           <C>
                              continuing security interest in all Collateral
                              provided hereunder and in any and all
                              substitutions therefor, proceeds thereof and
                              distributions thereon. Interest on any cash
                              Collateral held hereunder shall be credited at a
                              rate equal to the "Federal Funds (Effective)" rate
                              as such rate is displayed on Telerate page 118 for
                              such day under the caption "Effective" for USD or
                              the "EONIA" as such rate is displayed on Telerate
                              Page 247 for such day for Euro, as applicable. The
                              amount of interest calculated for each day of the
                              interest period shall be compounded monthly. These
                              Collateral Provisions constitute a Credit Support
                              Document and the failure by a party to deliver or
                              return Collateral in accordance with these
                              Collateral Provisions (if such failure is not
                              remedied on or before the Local Business Day after
                              notice of such failure is given to such party)
                              shall constitute an Event of Default for purposes
                              of Section 5(a)(iii) of the Master Agreement with
                              respect to such party. For purposes of these
                              Collateral Provisions, the term "Local Business
                              Day" shall have the meaning given such term in the
                              Master Agreement, except that references to a
                              payment in clause (b) thereof will be deemed to
                              include a delivery or return of Collateral
                              hereunder.
</TABLE>

3.   Additional Provisions:

          Each party hereto is hereby advised and acknowledges that the other
     party has engaged in (or refrained from engaging in) substantial financial
     transactions and has taken (or refrained from taking) other material
     actions in reliance upon the entry by the parties into the Transaction
     being entered into on the terms and conditions set forth herein and in the
     Confirmation relating to such Transaction, as applicable. This paragraph
     shall be deemed repeated on the trade date of each Transaction.

4.   Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
     Agreement:

     2)   The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
          Form Master Agreement will apply to any Transaction.

     2)   Termination Provisions. For purposes of the ISDA Form Master
          Agreement:

          (a)  "Specified Entity" is not applicable to BNY or Counterparty for
               any purpose.

          (b)  "Breach of Agreement" provision of Section 5(a)(ii) will apply to
               BNY and will not apply to Counterparty.

          (c)  "Credit Support Default" provisions of Section 5(a)(iii) will not
               apply to BNY or Counterparty.


                                       Q-5

<PAGE>

          (d)  "Misrepresentation" provisions or Section 5(a)(iv) will apply to
               BNY and will not apply to Counterparty.

          (e)  "Specified Transaction" is not applicable to BNY or Counterparty
               for any purpose, and, accordingly, Section 5(a)(v) shall not
               apply to BNY or Counterparty.

          (f)  The "Cross Default" provisions of Section 5(a)(vi) will not apply
               to BNY or to Counterparty.

          (g)  The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
               will not apply to BNY or Counterparty.

          (h)  The "Bankruptcy" provision of Section 5(a)(vii)(2) will not apply
               to Counterparty.

          (i)  The "Automatic Early Termination" provision of Section 6(a) will
               not apply to BNY or to Counterparty.

          (j)  Payments on Early Termination. For the purpose of Section 6(e) of
               this Agreement:

               (i)  Market Quotation will apply.

               (ii) The Second Method will apply.

          (k)  "Termination Currency" means United States Dollars.

3)   Tax Representations.

     Payer Representations. For the purpose of Section 3(e) of this Agreement,
     BNY and Counterparty make the following representations:

               It is not required by any applicable law, as modified by the
     practice of any relevant governmental revenue authority, of any Relevant
     Jurisdiction to make any deduction or withholding for or on account of any
     Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or
     6(e) of this Agreement) to be made by it to the other party under this
     Agreement. In making this representation, it may rely on:

          (i) the accuracy of any representations made by the other party
          pursuant to Section 3(f) of this Agreement;

          (ii) the satisfaction of the agreement contained in Section 4 (a)(i)
          or 4(a)(iii) of this Agreement and the accuracy and effectiveness of
          any document provided by the other party pursuant to Section 4 (a)(i)
          or 4(a)(iii) of this Agreement; and


                                       Q-6

<PAGE>

          (iii) the satisfaction of the agreement of the other party contained
          in Section 4(d) of this Agreement, provided that it shall not be a
          breach of this representation where reliance is placed on clause (ii)
          and the other party does not deliver a form or document under Section
          4(a)(iii) by reason of material prejudice of its legal or commercial
          position.

     Payee Representations. For the purpose of Section 3(f) of this Agreement,
     BNY and Counterparty make the following representations.

     The following representation will apply to BNY:

          BNY is a trust company duly organized and existing under the laws of
          the State of New York and its U.S. taxpayer identification number is
          135160382.

     The following representation will apply to the Counterparty:

          The Counterparty is a "U.S. person" (as that term is used in section
          1.1441-4(a)(3)(ii) of United States Treasury Regulations) for United
          States federal income tax purposes.

4)   The ISDA Form Master Agreement is hereby amended as follows:

          The word "third" shall be replaced by the word "second" in the third
          line of Section 5(a)(i) of the ISDA Form Master Agreement.

5)   Documents to be Delivered. For the purpose of Section 4(a):

(1)  Tax forms, documents, or certificates to be delivered are:

<TABLE>
<CAPTION>
PARTY REQUIRED TO                                    DATE BY WHICH TO BE
DELIVER DOCUMENT         FORM/DOCUMENT/CERTIFICATE   DELIVERED
-----------------        -------------------------   -------------------
<S>                      <C>                         <C>
BNY and the              Any document required or    Promptly after the earlier
Counterparty             reasonably requested to     of (i) reasonable demand by
                         allow the other party to    either party or (ii)
                         make payments under this    learning that such form or
                         Agreement without any       document is required
                         deduction or withholding
                         for or on the account of
                         any Tax or with such
                         deduction or withholding
                         at a reduced rate
</TABLE>

(2)  Other documents to be delivered are:


                                       Q-7

<PAGE>

<TABLE>
<CAPTION>
PARTY REQUIRED TO DELIVER                                                                        COVERED BY SECTION 3(D)
DOCUMENT                    FORM/DOCUMENT/ CERTIFICATE         DATE BY WHICH TO BE DELIVERED     REPRESENTATION
-------------------------   --------------------------         -----------------------------     -----------------------
<S>                         <C>                                <C>                               <C>
BNY and the Counterparty    Any documents required by the      Upon the execution and delivery   Yes
                            receiving party to evidence the    of this Agreement and such
                            authority of the delivering        Confirmation
                            party or its Credit Support
                            Provider, if any, for it to
                            execute and deliver this
                            Agreement, any Confirmation,
                            and any Credit Support Documents
                            to which it is a party, and to
                            evidence the authority of the
                            delivering party or its Credit
                            Support Provider to perform its
                            obligations under this
                            Agreement, such Confirmation
                            and/or Credit Support Document,
                            as the case may be

BNY and the Counterparty    A certificate of an authorized     Upon the execution and delivery   Yes
                            officer of the party, as to the    of this Agreement and such
                            incumbency and authority of the    Confirmation
                            respective officers of the party
                            signing this Agreement, any
                            relevant Credit Support
                            Document, or any  Confirmation,
                            as the case may be

BNY                         A copy of the most recent          Promptly after request by the     Yes
                            publicly available regulatory      other party
                            call report.
</TABLE>


                                       Q-8

<PAGE>

6)   Miscellaneous.

(a)  Address for Notices: For the purposes of Section 12(a) of this Agreement:

     Address for notices or communications to BNY:

               The Bank of New York
               Swaps and Derivative Products Group
               Treasury Division
               32 Old Slip 15th Floor
               New York, New York 10286
               Attention: Stephen M. Lawler
               Fax: 212-495-1015
               Phone: 212-804-2137

          (For all purposes)

     Address for notices or communications to the Counterparty:

               Wells Fargo Bank, N.A.
               9062 Old Annapolis Road
               Columbia, Maryland 21045
               Attention: Client Manager- Client Services
               Tele: 410-884-2000
               Fax No.: 410-715-2380

          (For all purposes)

(b)  Process Agent. For the purpose of Section 13(c):

               BNY appoints as its
               Process Agent: Not Applicable

               The Counterparty appoints as its
               Process Agent: Not Applicable

(c)  Offices. The provisions of Section 10(a) will not apply to this Agreement;
     neither BNY nor the Counterparty have any Offices other than as set forth
     in the Notices Section and BNY agrees that, for purposes of Section 6(b) of
     this Agreement, it shall not in future have any Office other than one in
     the United States.

(d)  Multibranch Party. For the purpose of Section 10(c) of this Agreement:

     BNY is not a Multibranch Party.


                                       Q-9

<PAGE>

     The Counterparty is not a Multibranch Party.

(e)  Calculation Agent. The Calculation Agent is BNY.

(f)  Credit Support Document. Not applicable for either BNY or the Counterparty.

(g)  Credit Support Provider.

     BNY: Not Applicable

     The Counterparty: Not Applicable

(h)  Governing Law. The parties to this Agreement hereby agree that the law of
     the State of New York shall govern their rights and duties in whole,
     without regard to conflict of law provisions thereof other than New York
     General Obligations Law Sections 5-1401 and 5-1402.

(i)  Severability. If any term, provision, covenant, or condition of this
     Agreement, or the application thereof to any party or circumstance, shall
     be held to be invalid or unenforceable (in whole or in part) for any
     reason, the remaining terms, provisions, covenants, and conditions hereof
     shall continue in full force and effect as if this Agreement had been
     executed with the invalid or unenforceable portion eliminated, so long as
     this Agreement as so modified continues to express, without material
     change, the original intentions of the parties as to the subject matter of
     this Agreement and the deletion of such portion of this Agreement will not
     substantially impair the respective benefits or expectations of the
     parties.

     The parties shall endeavor to engage in good faith negotiations to replace
     any invalid or unenforceable term, provision, covenant or condition with a
     valid or enforceable term, provision, covenant or condition, the economic
     effect of which comes as close as possible to that of the invalid or
     unenforceable term, provision, covenant or condition.

(j)  Consent to Recording. Each party hereto consents to the monitoring or
     recording, at any time and from time to time, by the other party of any and
     all communications between officers or employees of the parties, waives any
     further notice of such monitoring or recording, and agrees to notify its
     officers and employees of such monitoring or recording.

(k)  Waiver of Jury Trial. Each party waives any right it may have to a trial by
     jury in respect of any Proceedings relating to this Agreement or any Credit
     Support Document.

(m)  Transfer, Amendment and Assignment. No transfer, amendment, assignment or
     other modification of this Transaction shall be permitted unless agreed to
     by both parties and


                                      Q-10

<PAGE>

     unless Standard & Poor's Ratings Service, a division of The McGraw-Hill
     Companies, Inc., has been provided notice of the same and confirms in
     writing (including by facsimile transmission) within five Business Days
     after such notice is given that it will not downgrade, qualify, withdraw or
     otherwise modify its then-current rating of the Notes.

(n)  Proceedings. BNY shall not institute against or cause any other person to
     institute against, or join any other person in instituting against, Merrill
     Lynch Mortgage Investors Trust 2005-HE2, any bankruptcy, reorganization,
     arrangement, insolvency or liquidation proceedings, or other proceedings
     under any federal or state bankruptcy or similar law for a period of one
     year and one day (or, if longer, the applicable preference period)
     following indefeasible payment in full of the Notes.

7) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):

     "(g) Relationship Between Parties.

          Subject to Part 13 of the Agreement, each represents to the other
          party on each date when it enters into a Transaction that:

          (1) Nonreliance. It is not relying on any statement or representation
          of the other party regarding the Transaction (whether written or
          oral), other than the representations expressly made in this Agreement
          or the Confirmation in respect of that Transaction.

          (2) Evaluation and Understanding.

               (i) It is acting for its own account, has the capacity to
               evaluate (internally or through independent professional advice)
               the Transaction and has made its own decision to enter into the
               Transaction; it is not relying on any communication (written or
               oral) of the other party as investment advice or as a
               recommendation to enter into such transaction; it being
               understood that information and explanations related to the terms
               and conditions of such transaction shall not be considered
               investment advice or a recommendation to enter into such
               transaction. No communication (written or oral) received from the
               other party shall be deemed to be an assurance or guarantee as to
               the expected results of the transaction; and

               (ii) It understands the terms, conditions and risks of the
               Transaction and is willing and able to accept those terms and
               conditions and to assume (and does, in fact assume) those risks,
               financially and otherwise.

          (3) Purpose. It is an "eligible swap participant" as such term is
          defined in Section 35.1(b)(2) of the regulations (17 C.F.R 35)
          promulgated under, an and "eligible contract participant" as defined
          in Section 1(a)(12) of, the Commodity Exchange


                                      Q-11

<PAGE>

          Act, as amended, and it is entering into the Transaction for the
          purposes of managing its borrowings or investments, hedging its
          underlying assets or liabilities or in connection with a line of
          business.

          (4) Principal. The other party is not acting as a fiduciary or an
          advisor for it in respect of this Transaction."

8)   Set-off. Notwithstanding any provision of this Agreement or any other
     existing or future agreement, each party irrevocably waives any and all
     rights it may have to set off, net, recoup or otherwise withhold or suspend
     or condition payment or performance of any obligation between it and the
     other party hereunder against any obligation between it and the other party
     under any other agreements. The last sentence of the first paragraph of
     Section 6(e) of the ISDA Form Master Agreement shall not apply for purposes
     of this Transaction.

9)   Additional Termination Events. Additional Termination Events will apply. If
     a Ratings Event has occurred and BNY has not, within 30 days, complied with
     Section 10 below, then an Additional Termination Event shall have occurred
     with respect to BNY and BNY shall be the sole Affected Party with respect
     to such an Additional Termination Event.

10)  Ratings Event. If a Ratings Event (as defined below) occurs with respect to
     BNY (or any applicable credit support provider), then BNY shall, at its own
     expense, within thirty (30) days of such Ratings Event (i) assign this
     Transaction to a third party that meets or exceeds, or as to which any
     applicable credit support provider meets or exceeds, the Approved Ratings
     Thresholds (as defined below) on terms substantially similar to this
     Confirmation, which party is approved by the Counterparty, which approval
     shall not be unreasonably withheld, (ii) obtain a guaranty of, or a
     contingent agreement of, another person with the Approved Rating Thresholds
     to honor BNY's obligations under this Agreement, provided that such other
     person is approved by the Counterparty, such approval not to be
     unreasonably withheld (iii) post collateral under agreements and other
     instruments satisfactory to Counterparty or (iv) establish any other
     arrangement satisfactory to Counterparty, For purposes of this Transaction,
     a "Ratings Event" shall occur with respect to BNY (or any applicable credit
     support provider) if its short-term unsecured and unsubordinated debt
     ceases to be rated at least "A-1" by S&P or at least "F-1" by Fitch
     (including in connection with a merger, consolidation or other similar
     transaction by BNY or any applicable credit support provider) such ratings
     being referred to herein as the "Approved Ratings Thresholds". All the
     provisions above are subject to the Rating Agency Condition (no downgrade
     letter may be substituted for the Rating Agency Condition). For purposes of
     this provision, "Rating Agency Condition" means, with respect to any
     particular proposed act or omission to act hereunder that the party acting
     or failing to act must consult with S&P and Fitch and receive from S&P and
     Fitch a prior written confirmation that the proposed action or inaction
     would not cause a downgrade or withdrawal of the then-current rating of the
     Notes.

11)  Additional Provisions. Notwithstanding the terms of Sections 5 and 6 of the
     ISDA Form Master Agreement, if Counterparty has satisfied its payment
     obligations under Section


                                      Q-12

<PAGE>

     2(a)(i) of the ISDA Form Master Agreement, then unless BNY is required
     pursuant to appropriate proceedings to return to Counterparty or otherwise
     returns to Counterparty upon demand of Counterparty any portion of such
     payment, (a) the occurrence of an event described in Section 5(a) of the
     ISDA Form Master Agreement with respect to Counterparty shall not
     constitute an Event of Default or Potential Event of Default with respect
     to Counterparty as the Defaulting Party and (b) BNY shall be entitled to
     designate an Early Termination Event pursuant to Section 6 of the Agreement
     only as a result of a Termination Event set forth in either Section 5(b)(i)
     or Section 5(b)(ii) of the ISDA Form Master Agreement with respect to BNY
     as the Affected Party or Section 5(b)(iii) of the ISDA Form Master
     Agreement with respect to BNY as the Burdened Party. For purposes of the
     Transaction to which this Agreement relates, Counterparty's only obligation
     under Section 2(a)(i) of the ISDA Form Master Agreement is to pay the Fixed
     Amount on the Fixed Rate Payer Payment Date.

12)  MLML Shall Not Benefit. The parties hereto agree and acknowledge that
     amounts paid hereunder are not intended to benefit the holder of any class
     of the Merrill Lynch Mortgage Investors Trust, MLMI 2005-HE2 Mortgage Loan
     Asset Backed Certificates rated by any rating agency if such holder is
     Merrill Lynch Mortgage Lending Inc. ("MLML") or any of its affiliates. If
     MLML or any of its affiliates receives any such amounts, it will promptly
     remit (or, if such amounts are received by an affiliate of MLML, MLML
     hereby agrees that it will cause such affiliate promptly to remit) such
     amounts to the Trustee, whereupon the Trustee shall promptly remit such
     amounts to BNY. The Trustee shall provide notice to BNY prior to remitting
     any such amounts to BNY.

13)  Limitation of Liability. It is expressly understood and agreed by the
     parties hereto that (a) this Agreement is executed and delivered by Wells
     Fargo Bank, N.A., not individually or personally but solely as Trustee of
     Merrill Lynch Mortgage Investor Trust, Series 2005-HE2 (the "Trust"), in
     the exercise of the powers and authority conferred upon and vested in it
     under the Pooling and Servicing Agreement dated as of November 1, 2005, by
     and among Merrill Lynch Mortgage Investors, Inc. as depositor, Wilshire
     Credit Corporation, as servicer and Wells Fargo Bank, National Association
     as trustee (the "Pooling Agreement") and pursuant to instruction therein,
     and that the Trustee shall perform its duties and obligations hereunder in
     accordance with the standard care set forth in the Pooling Agreement, (b)
     each of the representations, undertakings and agreements herein made on the
     part of the Trust is made and intended not as personal representation,
     undertaking or agreement of the Trustee, but is made and intended for the
     purpose of binding only the Trust, and (c) under no circumstances shall the
     Trustee be liable for the payment of any indebtedness or expenses of the
     Trust or be liable for the breach or failure of any obligation,
     representation, warranty of covenant made or undertaken by the Trust
     herein; provided that nothing in this paragraph shall relieve the Trustee
     from performing its duties and obligations hereunder in accordance with the
     standard of care set forth in the Pooling Agreement.

14)  Payment Date Netting. The parties agree that subparagraph (ii) of Section
     2(c) of the Master Agreement will not apply to any Transactions that are or
     will be governed by the Master Agreement. Thus all amounts payable on the
     Fixed Rate Payer Payment Date and


                                      Q-13

<PAGE>

     Floating Rate Payer Payment Date occurring in the same calendar month and
     in the same currency in respect of all Transactions shall be netted.

5.   Account Details and
     Settlement Information: PAYMENTS TO BNY:
                             The Bank of New York
                             Derivative Products Support Department
                             32 Old Slip, 16th Floor
                             New York, New York 10286
                             Attention: Renee Etheart
                             ABA #_____________
                             Account #________________
                             Reference: Interest Rate Caps

                             PAYMENTS TO COUNTERPARTY:

                             Wells Fargo Bank, N.A.
                             ABA#: ___________

     A. For Credit To: SAS Clearing

                             Account: _____________
                             FFC To: MLMI 2005-HE2 Acct #_____________


                                      Q-14

<PAGE>

     Please confirm that the foregoing correctly sets forth the terms of our
Agreement by executing this Confirmation and returning it by facsimile to:
Derivative Products Support Department, Attn: Dax Braga at 212-804-5818/5837.

                                        THE BANK OF NEW YORK


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

Accepted and confirmed as of the date first written:

MERRILL LYNCH MORTGAGE INVESTORS TRUST 2005-HE2

By: Wells Fargo Bank, N.A., not in its individual capacity, but solely in its
capacity as Trustee of the Merrill Lynch Mortgage Investors Trust 2005-HE2


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


Solely with respect to Section 4 (12)
III. MERRILL LYNCH MORTGAGE LENDING INC


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------
Ref #: 36975


                                      Q-15

<PAGE>

                                    SCHEDULE


                                      Q-16

<PAGE>

               ELIGIBLE COLLATERAL ANNEX TO COLLATERAL PROVISIONS

<TABLE>
<CAPTION>
A.                                                                                  VALUATION
B. Eligible Collateral                                                             PERCENTAGE
----------------------                                                             ----------
<S>                                                                                <C>
Cash                                                                                  100%

U.S. Treasuries (as defined below) having a remaining term to maturity of not         100%
more than one year

Direct Obligations of US-Government Sponsored Entities (as defined below) having       99%
a remaining term to maturity of not more than one year

U.S. Treasuries having a remaining term to maturity of more than one year but          99%
not more than five years

Direct Obligations of US-Government Sponsored Entities having a remaining term         98%
to maturity of more than one year but not more than five years

U.S. Treasuries having a remaining term to maturity of more than five years but        99%
not more than ten years

Direct Obligations of US-Government Sponsored Entities having a remaining term         98%
to maturity of more than five years but not more than ten years

U.S. Treasuries having a remaining term to maturity of more than ten years but         98%
not more than twenty years

Direct Obligations of US-Government Sponsored Entities having a remaining term         97%
to maturity of more than ten years but not more than twenty years

U.S. Treasuries having a remaining term to maturity of more than twenty years          98%
but not more than thirty years

Direct Obligations of US-Government Sponsored Entities having a remaining term         97%
to maturity of more than twenty years but not more than thirty years
</TABLE>


                                      Q-17

<PAGE>

<TABLE>
<S>                                                                                    <C>
Mortgage participation certificates in book-entry form, the timely payment of          97%
interest at the applicable certificate rate and the ultimate collection of
principal of which are guaranteed by the Federal Home Loan Mortgage Corporation
(excluding multi-class REMIC pass-through certificates and pass-through
certificates backed by adjustable rate mortgages and excluding securities paying
interest or principal only)

Mortgage pass-through certificates in book-entry form, the full and timely             97%
payment of interest at the applicable certificate rate and the ultimate
collection of principal of which are guaranteed by the Federal National Mortgage
Association (excluding multi-class REMIC pass-through certificates and
pass-through certificates backed by adjustable rate mortgages and excluding
securities paying interest or principal only)

Fully modified pass-through certificates in book-entry form, the full and timely       97%
payment of 97% principal and interest of which are guaranteed by the Government
National Mortgage Association (excluding multi-class REMIC pass-through
certificates and pass-through certificates backed by adjustable rate mortgages
and excluding securities paying interest or principal only)
</TABLE>

For the purposes of the Eligible Collateral Annex set forth above, the words
indicated below shall have the following definitions:

"US Treasuries" shall mean negotiable debt obligations issued by the United
States Treasury Department.

"Direct Obligations of US-Government Sponsored Entities" shall mean non-callable
negotiable debt obligations of the Federal Home Loan Mortgage Corporation,
Federal National Mortgage Association and Government National Mortgage
Association.


                                      Q-18