Document:

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
                                    DEPOSITOR

                         U.S. BANK NATIONAL ASSOCIATION
                                     TRUSTEE

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                  MASTER SERVICER AND SECURITIES ADMINISTRATOR

                                       and

                            EMC MORTGAGE CORPORATION
                               SELLER AND COMPANY

                         POOLING AND SERVICING AGREEMENT

                            Dated as of July 1, 2004

                  Structured Asset Mortgage Investments II Inc.
           Bear Stearns ARM Trust, Mortgage Pass-Through Certificates

                                  Series 2004-6

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                                TABLE OF CONTENTS
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                                                                                                               Page
ARTICLE I
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Definitions.......................................................................................................2
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates..................................................34
   Section 2.01       Conveyance of Mortgage Loans to Trustee....................................................34
   Section 2.02       Acceptance of Mortgage Loans by Trustee....................................................37
   Section 2.03       Assignment of Interest in the Mortgage Loan Purchase Agreement.............................39
   Section 2.04       Substitution of Mortgage Loans.............................................................40
   Section 2.05       Issuance of Certificates...................................................................41
   Section 2.06       Representations and Warranties Concerning the Depositor....................................42
ARTICLE III
Administration and Servicing of Mortgage Loans...................................................................44
   Section 3.01       Master Servicer............................................................................44
   Section 3.02       REMIC-Related Covenants....................................................................45
   Section 3.03       Monitoring of Servicers....................................................................45
   Section 3.04       Fidelity Bond..............................................................................46
   Section 3.05       Power to Act; Procedures...................................................................46
   Section 3.06       Due-on-Sale Clauses; Assumption Agreements.................................................47
   Section 3.07       Release of Mortgage Files..................................................................47
   Section 3.08       Documents, Records and Funds in Possession of Master Servicer
                        To Be Held for Trustee...................................................................48
   Section 3.09       Standard Hazard Insurance and Flood Insurance Policies.....................................49
   Section 3.10       Presentment of Claims and Collection of Proceeds...........................................50
   Section 3.11       Maintenance of the Primary Mortgage Insurance Policies.....................................50
   Section 3.12       Trustee to Retain Possession of Certain Insurance Policies and Documents...................50
   Section 3.13       Realization Upon Defaulted Mortgage Loans..................................................51
   Section 3.14       Compensation for the Master Servicer.......................................................51
   Section 3.15       REO Property...............................................................................51
   Section 3.16       Annual Officer's Certificate as to Compliance..............................................52
   Section 3.17       Annual Independent Accountant's Servicing Report...........................................52
   Section 3.18       Reports Filed with Securities and Exchange Commission......................................53
   Section 3.19       The Company................................................................................54
   Section 3.20       UCC........................................................................................54
   Section 3.21       Optional Purchase of Defaulted Mortgage Loans..............................................54
   Section 3.22       Reserved...................................................................................55
ARTICLE IV
Accounts.........................................................................................................56
   Section 4.01       Protected Accounts.........................................................................56
   Section 4.02       Master Servicer Collection Account.........................................................57
   Section 4.03       Permitted Withdrawals and Transfers from the Master Servicer Collection Account............58
   Section 4.04       Distribution Account.......................................................................59
   Section 4.05       Permitted Withdrawals and Transfers from the Distribution Account..........................60
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ARTICLE V
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Certificates.....................................................................................................62
   Section 5.01       Certificates...............................................................................62
   Section 5.02       Registration of Transfer and Exchange of Certificates......................................68
   Section 5.03       Mutilated, Destroyed, Lost or Stolen Certificates..........................................71
   Section 5.04       Persons Deemed Owners......................................................................72
   Section 5.05       Transfer Restrictions on Residual Certificates.............................................72
   Section 5.06       Restrictions on Transferability of Certificates............................................73
   Section 5.07       ERISA Restrictions.........................................................................74
   Section 5.08       Rule 144A Information......................................................................75
ARTICLE VI
Payments to Certificateholders...................................................................................76
   Section 6.01       Distributions on the Certificates..........................................................76
   Section 6.02       Allocation of Losses.......................................................................79
   Section 6.03       Payments...................................................................................81
   Section 6.04       Statements to Certificateholders...........................................................82
   Section 6.05       Monthly Advances...........................................................................84
   Section 6.06       Compensating Interest Payments.............................................................85
ARTICLE VII
The Master Servicer..............................................................................................86
   Section 7.01       Liabilities of the Master Servicer.........................................................86
   Section 7.02       Merger or Consolidation of the Master Servicer.............................................86
   Section 7.03       Indemnification of the Trustee, the Master Servicer and the Securities Administrator.........
   86
   Section 7.04       Limitations on Liability of the Master Servicer and Others.................................87
   Section 7.05       Master Servicer Not to Resign..............................................................88
   Section 7.06       Successor Master Servicer..................................................................88
   Section 7.07       Sale and Assignment of Master Servicing....................................................88
ARTICLE VIII
Default..........................................................................................................90
   Section 8.01       Events of Default..........................................................................90
   Section 8.02       Trustee to Act; Appointment of Successor...................................................92
   Section 8.03       Notification to Certificateholders.........................................................93
   Section 8.04       Waiver of Defaults.........................................................................93
   Section 8.05       List of Certificateholders.................................................................93
ARTICLE IX
Concerning the Trustee and the Securities Administrator..........................................................94
   Section 9.01       Duties of Trustee..........................................................................94
   Section 9.02       Certain Matters Affecting the Trustee and the Securities Administrator.....................96
   Section 9.03       Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans...........
   98
   Section 9.04       Trustee and Securities Administrator May Own Certificates..................................98
   Section 9.05       Trustee's and Securities Administrator's Fees and Expenses.................................98
   Section 9.06       Eligibility Requirements for Trustee and Securities Administrator..........................99
   Section 9.07       Insurance..................................................................................99
   Section 9.08       Resignation and Removal of the Trustee and Securities Administrator.......................100
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   Section 9.09       Successor Trustee and Successor Securities Administrator..................................101
   Section 9.10       Merger or Consolidation of Trustee or Securities Administrator............................101
   Section 9.11       Appointment of Co-Trustee or Separate Trustee.............................................101
   Section 9.12       Federal Information Returns and Reports to Certificateholders;
                        REMIC Administration....................................................................103
ARTICLE X
Termination.....................................................................................................105
   Section 10.01      Termination  Upon  Repurchase by the Depositor or its Designee or
                        Liquidation of the Mortgage Loans.......................................................105
   Section 10.02      Additional Termination Requirements.......................................................107
ARTICLE XI
Miscellaneous Provisions........................................................................................109
   Section 11.01      Intent of Parties.........................................................................109
   Section 11.02      Amendment.................................................................................109
   Section 11.03      Recordation of Agreement..................................................................110
   Section 11.04      Limitation on Rights of Certificateholders................................................110
   Section 11.05      Acts of Certificateholders................................................................111
   Section 11.06      Governing Law.............................................................................112
   Section 11.07      Notices...................................................................................112
   Section 11.08      Severability of Provisions................................................................113
   Section 11.09      Successors and Assigns....................................................................113
   Section 11.10      Article and Section Headings..............................................................113
   Section 11.11      Counterparts..............................................................................113
   Section 11.12      Notice to Rating Agencies.................................................................113

                                    EXHIBITS

Exhibit A-1               -    Form of Class A Certificates
Exhibit A-2               -    Form of Class B Certificates
Exhibit A-3               -    Form of Class R Certificates
Exhibit B                 -    Mortgage Loan Schedule
Exhibit C                 -    [Reserved]
Exhibit D                 -    Request for Release of Documents
Exhibit E                 -    Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1               -    Form of Investment Letter
Exhibit F-2               -    Form of Rule 144A and Related Matters Certificate
Exhibit G                 -    Form of Custodial Agreement
Exhibit H-1 to H-3        -    Servicing Agreements
Exhibit I                 -    Assignment Agreements
Exhibit J                 -    Mortgage Loan Purchase Agreement
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<PAGE>

                         POOLING AND SERVICING AGREEMENT

         Pooling and Servicing Agreement dated as of July 1, 2004, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), U.S. Bank National Association, a national banking
association, not in its individual capacity but solely as trustee (the
"Trustee"), Wells Fargo Bank, National Association, as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), and EMC Mortgage Corporation, as
seller (in such capacity, the "Seller") and as company (in such capacity, the
"Company").

                              PRELIMINARY STATEMENT

         On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from the Seller. On the Closing Date, the Depositor will sell the Mortgage
Loans and certain other property to the Trust Fund and receive in consideration
therefor Certificates evidencing the entire beneficial ownership interest in the
Trust Fund.

         The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC I Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I Certificate will be
designated the "residual interest" in such REMIC.

         The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, the REMIC II Regular Interests will be designated
"regular interests" in such REMIC and the Class R-II Certificate will be
designated the "residual interest" in such REMIC.

         The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $740,955,084.07. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance. The Group I
Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off
Date, after deducting all Scheduled Principal due on or before the Cut-off Date,
of $416,085,999.99. The Group II Mortgage Loans will have an Outstanding
Principal Balance as of the Cut-off Date, after deducting all Scheduled
Principal due on or before the Cut-off Date, of $233,610,519.69. The Group III
Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off
Date, after deducting all Scheduled Principal due on or before the Cut-off Date,
of $91,258,564.39.

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

<PAGE>

                                    ARTICLE I
                                   Definitions

         Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.

         ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).

         ACCOUNT: The Master Servicer Collection Account and the Protected
Account as the context may require.

         ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount, of such
Certificate immediately prior to such Distribution Date, on the basis of a
360-day year consisting of twelve 30-day months, less (i) in the case of a
Senior Certificate, such Certificate's share of any Net Interest Shortfall from
the related Mortgage Loans and, after the Cross-Over Date, the interest portion
of any Realized Losses on the related Mortgage Loans allocated thereto in
accordance with Section 6.02(g) and (ii) in the case of a Subordinate
Certificate, such Certificate's share of any Net Interest Shortfall from the
related Mortgage Loans and the interest portion of any Realized Losses on the
related Mortgage Loans allocated thereto in accordance with Section 6.02(g).

         AFFILIATE: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "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. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.

         AGGREGATE EXPENSE RATE: With respect to any Mortgage Loan, the sum of
the Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).

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

         ALLOCABLE SHARE: With respect to each Class of Subordinate
Certificates:

         (a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iv) of the definition of Subordinate Optimal Principal Amount,
the fraction, expressed as a

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percentage, the numerator of which is the Current Principal Amount of such Class
and the denominator of which is the aggregate Current Principal Amount of all
Classes of the Subordinate Certificates; and

         (b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal
Amount, and as to each Class of Subordinate Certificates (other than the Class
of Subordinate Certificates having the lowest numerical designation as to which
the Class Prepayment Distribution Trigger shall not be applicable) for which (x)
the Class Prepayment Distribution Trigger has been satisfied on such
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Current Principal Amount of such Class and the denominator of which
is the aggregate Current Principal Amount of all such Classes of Subordinate
Certificates and (y) the Class Prepayment Distribution Trigger has not been
satisfied on such Distribution Date, 0%; provided that if on a Distribution
Date, the Current Principal Amount of any Class of Subordinate Certificates for
which the Class Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts distributed pursuant to this
clause (b), to the extent of such Class's remaining Allocable Share, shall be
distributed to the remaining Classes of Subordinate Certificates which satisfy
the Class Prepayment Distribution Trigger and to the Class of Subordinate
Certificates having the lowest numerical Class designation in reduction of their
respective Current Principal Amounts in the order of their numerical Class
designations.

         APPLICABLE CREDIT RATING: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of Moody's. For any
short-term deposit or security, or a rating of A-l+ in the case of S&P or P-1 in
the case of Moody's.

         APPLICABLE STATE LAW: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been brought to the attention of the
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and the Trustee delivered
to it by the Master Servicer or the Depositor, or (ii) written notice from the
appropriate taxing authority as to the applicability of such state law.

         APPRAISED VALUE: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.

         ASSIGNMENT AGREEMENTS: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit of
the Certificateholders.

         ASSIGNMENT OF PROPRIETARY LEASE: With respect to a Cooperative Loan,
the assignment of the related Cooperative Lease from the Mortgagor to the
originator of the Cooperative Loan.

         ASSUMED FINAL DISTRIBUTION DATE: September 25, 2034, or if such day is
not a Business Day, the next succeeding Business Day.

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         AVAILABLE FUNDS: With respect to any Distribution Date, the sum of the
Group I, Group II and Group III Available Funds for such Distribution Date.

         AVERAGE LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date
and each Loan Group, the percentage equivalent of a fraction, the numerator of
which is the sum of the Loss Severity Percentages for each Mortgage Loan in such
Loan Group which had a Realized Loss and the denominator of which is the number
of Mortgage Loans in the related Loan Group which had Realized Losses.

         BANKRUPTCY CODE: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C.ss.ss.101-1330.

         BANKRUPTCY LOSS: With respect to any Mortgage Loan, any Deficient
Valuation or Debt Service Reduction related to such Mortgage Loan as reported by
the applicable Servicer to the Master Servicer.

         BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.

         BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator is located are authorized
or obligated by law or executive order to be closed.

         CALENDAR QUARTER: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.

         CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits A-1, A-2 and A-3
with the blanks therein appropriately completed.

         CERTIFICATE GROUP: The Group I Senior Certificates, Group II Senior
Certificates and Group III Senior Certificates, as applicable.

         CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER: A Holder of a Certificate.

         CLASS: with respect to the Certificates, I-A-1, I-A-2, II-A-1, II-A-2,
III-A, R-I, R-II, B-1, B-2, B-3, B-4, B-5 and B-6.

         CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount

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<PAGE>

of such Class and each Class of Subordinate Certificates subordinate thereto, if
any, and the denominator of which is the Scheduled Principal Balance of all of
the Mortgage Loans as of the related Due Date, equals or exceeds such percentage
calculated as of the Closing Date.

         CLASS R CERTIFICATES: The Class R-I Certificates and Class R-II
Certificates.

         CLASS R DEPOSIT: The sum of the Class R-I Deposit and Class R-II
Deposit.

         CLASS R-I DEPOSIT: The $50 deposit into the Distribution Account by the
Depositor on the Closing Date to pay the Class R-I Certificate in accordance
with Section 6.01(a) on the Distribution Date occurring in August 2004.

         CLASS R-II DEPOSIT: The $50 deposit into the Distribution Account by
the Depositor on the Closing Date to pay the Class R-II Certificate in
accordance with Section 6.01(a) on the Distribution Date occurring in August
2004.

         CLOSING DATE: July 30, 2004.

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

         COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.

         COOPERATIVE: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.

         COOPERATIVE APARTMENT: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.

         COOPERATIVE LEASE: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.

         COOPERATIVE LOAN: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.

         COOPERATIVE STOCK: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.

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<PAGE>

         COOPERATIVE STOCK CERTIFICATE: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.

         CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at U.S. Bank Corporate
Trust Services, One Federal Street, 3rd Floor, Boston, Massachusetts 02110,
Attention: Corporate Trust Services/BART Series 2004-6. For purposes of
registration and transfer and exchange only, the Corporate Trust Office shall be
located at U.S. Bank National Association, 60 Livingston Avenue, Bond Drop
Window, St. Paul, Minnesota 55107.

         COUNTRYWIDE: Countrywide Home Loans Servicing LP, as successor to
Countrywide Home Loans, Inc., or its successor in interest.

         COUNTRYWIDE SERVICING AGREEMENT: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, as amended on January 1, 2003, between
the Seller and Countrywide, attached hereto as Exhibit H-1, as modified by the
related Assignment Agreement.

         CROSS-OVER DATE: The first Distribution Date on which the aggregate
Current Principal Amount of the Subordinate Certificates has been reduced to
zero (giving effect to all distributions on such Distribution Date).

         CURRENT PRINCIPAL AMOUNT: With respect to any Certificate as of any
Distribution Date, the initial principal amount of such Certificate plus any
Subsequent Recoveries added to the Current Principal Amount of such Certificate
pursuant to Section 6.02(h), and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation and (iii) in the case of a Subordinate Certificate, such
Certificate's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount for previous Distribution Dates. With respect to any Class of
Certificates, the Current Principal Amount thereof will equal the sum of the
Current Principal Amounts of all Certificates in such Class. Notwithstanding the
foregoing, solely for purposes of giving consents, directions, waivers,
approvals, requests and notices, the Class R-I Certificates and Class R-II
Certificates after the Distribution Date on which they each receive the
distribution of the last dollar of their respective original principal amount
shall be deemed to have Current Principal Amounts equal to their respective
Current Principal Amounts on the day immediately preceding such Distribution
Date.

         CUSTODIAL AGREEMENT: An agreement, dated as of the Closing Date among
the Depositor, the Master Servicer, the Trustee and the Custodian in
substantially the form of Exhibit G hereto.

         CUSTODIAN: Wells Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and of the Custodial
Agreement.

         CUT-OFF DATE: July 1, 2004.

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<PAGE>

         CUT-OFF DATE BALANCE: $740,955,084.07.

         DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.

         DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.

         DEPOSITOR: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, or its successors in interest.

         DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.

         DEPOSITORY AGREEMENT: The meaning specified in Subsection 5.01(a)
hereof.

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

         DESIGNATED DEPOSITORY INSTITUTION: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.

         DETERMINATION DATE: With respect to each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.

         DISQUALIFIED ORGANIZATION: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the Freddie Mac or any successor thereto, a majority of its
board of directors is not selected by such governmental unit), (ii) any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an ownership interest in a Residual Certificate by such Person
may cause any REMIC contained in the Trust or any Person having an ownership
interest in the Residual Certificate (other than such Person) to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual Certificate
to such Person.

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<PAGE>

The terms "United States," "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.

         DISTRIBUTION ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "U.S. Bank
National Association, as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates,
Series 2004-6 - Distribution Account." The Distribution Account shall be an
Eligible Account.

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

         DISTRIBUTION DATE: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.

         DTC CUSTODIAN: U.S. Bank National Association, or its successors in
interest as custodian for the Depository.

         DUE DATE: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.

         DUE PERIOD: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the month
in which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.

         ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-2 or better by S&P and P-1 by Moody's at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel (obtained by the Person requesting
that the account be held pursuant to this clause (i)) delivered to the Trustee
prior to the establishment of such account, the Certificateholders will have a
claim with respect to the funds in such account and a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the Distribution
Account) securing such funds that is superior to claims of any other depositors
or general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as the
Distribution Account will not have an adverse effect on the then-current ratings
assigned to

                                       8
<PAGE>

the Classes of Certificates then rated by the Rating Agencies). Eligible
Accounts may bear interest.

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

         EVENT OF DEFAULT: An event of default described in Section 8.01.

         EVERHOME: EverHome Mortgage Company, formerly known as Alliance
Mortgage Company, or its successor in interest.

         EVERHOME SERVICING AGREEMENTS: The Servicing Agreement dated as of
March 31, 2003 between the Seller and EverHome, attached hereto as Exhibit H-2,
as modified by the related Assignment Agreement.

         EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.

         FANNIE MAE: Federal National Mortgage Association or any successor
thereto.

         FDIC: Federal Deposit Insurance Corporation or any successor thereto.

         FINAL CERTIFICATION: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.

         FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) each class of Residual Certificates will be
deemed to equal 0.25% and (ii) a Certificate of any other Class will be deemed
to equal 99.50% multiplied by a fraction, the numerator of which is the Current
Principal Amount of such Certificate and the denominator of which is the
aggregate Current Principal Amount of all the Certificates.

         FREDDIE MAC: Freddie Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.

         GLOBAL CERTIFICATE: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository).

         GROSS MARGIN: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to

                                       9
<PAGE>

the related Index on each Interest Adjustment Date to determine (subject to
rounding, the minimum and maximum Mortgage Interest Rate and the Periodic Rate
Cap) the Mortgage Interest Rate until the next Interest Adjustment Date.

         GROUP I AVAILABLE FUNDS, GROUP II AVAILABLE FUNDS AND GROUP III
AVAILABLE FUNDS: With respect to any Distribution Date, an amount equal to the
aggregate of the following amounts with respect to the Mortgage Loans in the
related Loan Group: (a) all previously undistributed payments on account of
principal (including the principal portion of Scheduled Payments, Principal
Prepayments and the principal portion of Net Liquidation Proceeds) and all
previously undistributed payments on account of interest received after the
Cut-off Date and on or prior to the related Determination Date, (b) any Monthly
Advances and Compensating Interest Payments by the Servicers or the Master
Servicer with respect to such Distribution Date and (c) any reimbursed amount in
connection with losses on investments of deposits in an account, except:

         (i)......all payments that were due on or before the Cut-off Date;

         (ii).....all Principal Prepayments and Liquidation Proceeds received
after the applicable Prepayment Period;

         (iii)....all payments, other than Principal Prepayments, that represent
early receipt of Scheduled Payments due on a date or dates subsequent to the
related Due Date;

         (iv).....amounts received on particular Mortgage Loans as late payments
of principal or interest and respecting which, and to the extent that, there are
any unreimbursed Monthly Advances;

         (v)......amounts representing Monthly Advances determined to be
Nonrecoverable Advances;

         (vi).....any investment earnings on amounts on deposit in the Master
Servicer Collection Account and the Distribution Account and amounts permitted
to be withdrawn from the Master Servicer Collection Account and the Distribution
Account pursuant to this Agreement;

         (vii)....amounts needed to pay the Servicing Fees or to reimburse any
Servicer or the Master Servicer for amounts due under the applicable Servicing
Agreement and the Agreement to the extent such amounts have not been retained
by, or paid previously to, such Servicer or the Master Servicer;

         (viii)...any fees payable under any lender-paid primary mortgage
insurance policy; and

         (ix).....any expenses or other amounts reimbursable to the Trustee, the
Securities Administrator and the Custodian pursuant to Section 7.04(c) or
Section 9.05.

                                       10
<PAGE>

         GROUP I MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

         GROUP I SENIOR CERTIFICATES: The Class I-A-1 Certificates and Class
I-A-2 Certificates.

         GROUP I SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP II SENIOR OPTIMAL
PRINCIPAL AMOUNT AND GROUP III SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to
each Distribution Date, an amount equal to the sum, without duplication, of the
following (but in no event greater than the aggregate Current Principal Amount
of the Group I, Group II or Group III Senior Certificates, as applicable,
immediately prior to such Distribution Date):

         (i)......the applicable Senior Percentage of the principal portion of
all Scheduled Payments due on each Outstanding Mortgage Loan in the related Loan
Group on the related Due Date as specified in the amortization schedule at the
time applicable thereto (after adjustments for previous Principal Prepayments
but before any adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or grace
period);

         (ii).....the applicable Senior Prepayment Percentage of the Scheduled
Principal Balance of each Mortgage Loan in the related Loan Group which was the
subject of a Principal Prepayment in full received by the Master Servicer during
the related Prepayment Period;

         (iii)....the applicable Senior Prepayment Percentage of all Principal
Prepayments in part received by the Master Servicer during the related
Prepayment Period with respect to each Mortgage Loan in the related Loan Group;

         (iv).....the lesser of (a) the applicable Senior Prepayment Percentage
of the sum of (A) all Net Liquidation Proceeds allocable to principal received
in respect of each Mortgage Loan in the related Loan Group which became a
Liquidated Mortgage Loan during the related Prepayment Period (other than
Mortgage Loans described in the immediately following clause (B)) and all
Subsequent Recoveries received in respect of each Liquidated Mortgage Loan in
the related Loan Group during the related Due Period and (B) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group purchased
by an insurer from the Trustee during the related Prepayment Period pursuant to
the related Primary Mortgage Insurance Policy, if any, or otherwise; and (b) the
applicable Senior Percentage of the sum of (A) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group which became a Liquidated
Mortgage Loan during the related Prepayment Period (other than the Mortgage
Loans described in the immediately following clause (B)) and (B) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group that was
purchased by an insurer from the Trust during the related Prepayment Period
pursuant to the related Primary Mortgage Insurance Policy, if any or otherwise;
and

         (v)......the applicable Senior Prepayment Percentage of the sum of (a)
the Scheduled Principal Balance of each Mortgage Loan in the related Loan Group
which was repurchased by the Seller in connection with such Distribution Date
and (b) the excess, if any, of the Scheduled Principal Balance of each Mortgage
Loan in the related Loan Group that has been

                                       11
<PAGE>

replaced by the Seller with a Substitute Mortgage Loan pursuant to the Mortgage
Loan Purchase Agreement in connection with such Distribution Date over the
Scheduled Principal Balance of each such Substitute Mortgage Loan.

         GROUP I SENIOR PERCENTAGE: Initially, 95.75%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group I
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans as of the
beginning of the related Due Period.

         GROUP I SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

<TABLE>
<CAPTION>
Period (dates inclusive)                   Group I Senior Prepayment Percentage
--------------------------------------------------------------------------------------------------------
<S>                                        <C>
August 25, 2004 - July 25, 2011            100%
August 25, 2011 - July 25, 2012            Group  I  Senior   Percentage   plus  70%  of  the   Group  I
                                           Subordinate Percentage
August 25, 2012 - July 25, 2013            Group  I  Senior   Percentage   plus  60%  of  the   Group  I
                                           Subordinate Percentage
August 25, 2013 - July 25, 2014            Group  I  Senior   Percentage   plus  40%  of  the   Group  I
                                           Subordinate Percentage
August 25, 2014 - July 25, 2015            Group  I  Senior   Percentage   plus  20%  of  the   Group  I
                                           Subordinate Percentage
August 25, 2015 and thereafter             Group I Senior Percentage
</TABLE>

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

         In addition, no reduction of the Group I Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including August 2011 and July 2012, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including August
2012 and July 2013, (c) 40% of the Original Subordinate Principal Balance if
such Distribution Date occurs between and including August 2013 and July 2014,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including August 2014 and July 2015, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after August 2015.

         In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans

                                       12

<PAGE>

delinquent 60 days or more (including for this purpose any such Mortgage Loans
in foreclosure and bankruptcy and such Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the aggregate Current Principal Amount of
the Subordinate Certificates does not exceed 50% and (b)(i) on or prior to the
Distribution Date in July 2007 cumulative Realized Losses on the Mortgage Loans
as of the end of the related Prepayment Period do not exceed 20% of the Original
Subordinate Principal Balance and (ii) after the Distribution Date in July 2007
cumulative Realized Losses on the Mortgage Loans as of the end of the related
Prepayment Period do not exceed 30% of the Original Subordinate Principal
Balance, then, the Group I Senior Prepayment Percentage for such Distribution
Date will equal the Group I Senior Percentage; provided, however, if on such
Distribution Date the current weighted average of the Subordinate Percentages is
equal to or greater than two times the initial weighted average of the
Subordinate Percentages on or prior to the Distribution Date occurring in July
2007 and the above delinquency and loss tests are met, then the Group I Senior
Prepayment Percentage for such Distribution Date will equal the Group I Senior
Percentage plus 50% of the Group I Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group I Senior Prepayment Percentage for such
distribution date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group I Senior Certificates are reduced to zero, the
Group I Senior Prepayment Percentage shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.

         GROUP I SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group I Senior Percentage.

         GROUP I SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group I
Mortgage Loans, on any Distribution Date, 100% minus the Group I Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group I Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group I
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group I Senior Certificates have each been reduced to
zero, then the Group I Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

                                       13

<PAGE>

         GROUP II MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

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

         GROUP II SENIOR PERCENTAGE: Initially, 95.75%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group II Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group II Mortgage Loans as of the
beginning of the related Due Period.

         GROUP II SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

<TABLE>
<CAPTION>
Period (dates inclusive)               Group II Senior Prepayment Percentage
------------------------------------------------------------------------------------------------
<S>                                    <C>
August 25, 2004 - July 25, 2011        100%
August 25, 2011 - July 25, 2012        Group  II  Senior   Percentage  plus  70%  of  the  Group  II
                                       Subordinate Percentage
August 25, 2012 - July 25, 2013        Group  II  Senior   Percentage  plus  60%  of  the  Group  II
                                       Subordinate Percentage
August 25, 2013 - July 25, 2014        Group  II  Senior   Percentage  plus  40%  of  the  Group  II
                                       Subordinate Percentage
August 25, 2014 - July 25, 2015        Group  II  Senior   Percentage  plus  20%  of  the  Group  II
                                       Subordinate Percentage
August 25, 2015 and thereafter         Group II Senior Percentage
--------------------------------------------------------------------------------
</TABLE>

         In addition, no reduction of the Group II Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including August 2011 and July 2012, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including August
2012 and July 2013, (c) 40% of the Original Subordinate Principal Balance if
such Distribution Date occurs between and including August 2013 and July 2014,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including August 2014 and July 2015, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after August 2015.

         In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate

                                       14
<PAGE>

Percentages, and (a) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and bankruptcy and such Mortgage Loans with respect to
which the related Mortgaged Property has been acquired by the Trust), averaged
over the last six months, as a percentage of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50% and (b)(i) on or
prior to the Distribution Date in July 2007 cumulative Realized Losses on the
Mortgage Loans as of the end of the related Prepayment Period do not exceed 20%
of the Original Subordinate Principal Balance and (ii) after the Distribution
Date in July 2007 cumulative Realized Losses on the Mortgage Loans as of the end
of the related Prepayment Period do not exceed 30% of the Original Subordinate
Principal Balance, then, the Group II Senior Prepayment Percentage for such
Distribution Date will equal the Group II Senior Percentage; provided, however,
if on such Distribution Date the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages on or prior to the Distribution Date occurring in
July 2007 and the above delinquency and loss tests are met, then the Group II
Senior Prepayment Percentage for such Distribution Date will equal the Group II
Senior Percentage plus 50% of the Group II Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group II Senior Prepayment Percentage for such
distribution date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group II Senior Certificates are reduced to zero, the
Group II Senior Prepayment Percentage shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.

         GROUP II SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group II Senior Percentage.

         GROUP II SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
II Mortgage Loans, on any Distribution Date, 100% minus the Group II Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group II Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group II
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group II Senior Certificates have each been reduced to
zero, then the Group II Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

                                       15

<PAGE>

         GROUP III MORTGAGE LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

         GROUP III SENIOR CERTIFICATES: The Class III-A Certificates.

         GROUP III SENIOR PERCENTAGE: Initially, 95.75%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group III Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group III Mortgage Loans as of
the beginning of the related Due Period.

         GROUP III SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date
occurring during the periods set forth below, as follows:

<TABLE>
<CAPTION>
Period (dates inclusive)               Group III Senior Prepayment Percentage
-----------------------------------------------------------------------------------------------------
<S>                                    <C>
August 25, 2004 - July 25, 2011        100%
August 25, 2011 - July 25, 2012        Group  III  Senior  Percentage  plus  70%  of the  Group  III
                                       Subordinate Percentage
August 25, 2012 - July 25, 2013        Group  III  Senior  Percentage  plus  60%  of the  Group  III
                                       Subordinate Percentage
August 25, 2013 - July 25, 2014        Group  III  Senior  Percentage  plus  40%  of the  Group  III
                                       Subordinate Percentage
August 25, 2014 - July 25, 2015        Group  III  Senior  Percentage  plus  20%  of the  Group  III
                                       Subordinate Percentage
August 25, 2015 and thereafter         Group III Senior Percentage
</TABLE>

         In addition, no reduction of the Group III Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including August 2011 and July 2012, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including August
2012 and July 2013, (c) 40% of the Original Subordinate Principal Balance if
such Distribution Date occurs between and including August 2013 and July 2014,
(d) 45% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including August 2014 and July 2015, and (e) 50% of the
Original Subordinate Principal Balance if such Distribution Date occurs during
or after August 2015.

         In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate

                                       16
<PAGE>

Percentages, and (a) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and bankruptcy and such Mortgage Loans with respect to
which the related Mortgaged Property has been acquired by the Trust), averaged
over the last six months, as a percentage of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50% and (b)(i) on or
prior to the Distribution Date in July 2007 cumulative Realized Losses on the
Mortgage Loans as of the end of the related Prepayment Period do not exceed 20%
of the Original Subordinate Principal Balance and (ii) after the Distribution
Date in July 2007 cumulative Realized Losses on the Mortgage Loans as of the end
of the related Prepayment Period do not exceed 30% of the Original Subordinate
Principal Balance, then, the Group III Senior Prepayment Percentage for such
Distribution Date will equal the Group III Senior Percentage; provided, however,
if on such Distribution Date the current weighted average of the Subordinate
Percentages is equal to or greater than two times the initial weighted average
of the Subordinate Percentages on or prior to the Distribution Date occurring in
July 2007 and the above delinquency and loss tests are met, then the Group III
Senior Prepayment Percentage for such Distribution Date will equal the Group III
Senior Percentage plus 50% of the Group III Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group III Senior Prepayment Percentage for such
distribution date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group III Senior Certificates are reduced to zero, the
Group III Senior Prepayment Percentage shall be the minimum percentage
sufficient to effect such reduction and thereafter shall be zero.

         GROUP III SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus
the Group III Senior Percentage.

         GROUP III SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
III Mortgage Loans, on any Distribution Date, 100% minus the Group III Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group III Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group III
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group III Senior Certificates have each been reduced to
zero, then the Group III Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

                                       17
<PAGE>

         HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Master Servicer or the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Fractional Undivided Interest evidenced thereby shall not be taken into account
in determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.

         INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.

         INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor or
the Master Servicer or any Affiliate as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

         INDEX: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.

         INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.

         INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the Custodial Agreement.

         INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.

         INSURANCE POLICY: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.

         INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse insured expenses.

         INTEREST ACCRUAL PERIOD: With respect to each Distribution Date, for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.

         INTEREST ADJUSTMENT DATE: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.

                                       18

<PAGE>

         INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Principal Prepayment or constitutes a Relief Act Mortgage Loan, an amount
determined as follows:

         (a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the amount of such prepayment and (ii) the amount of
interest for the calendar month of such prepayment (adjusted to the applicable
Net Rate) received at the time of such prepayment;

         (b) Principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Rate on the Scheduled Principal Balance of such Mortgage Loan
immediately prior to such prepayment and (ii) the amount of interest for the
calendar month of such prepayment (adjusted to the applicable Net Rate) received
at the time of such prepayment; and

         (c) Relief Act Mortgage Loans: As to any Relief Act Mortgage Loan, the
excess of (i) 30 days' interest (or, in the case of a principal prepayment in
full, interest to the date of prepayment) on the Scheduled Principal Balance
thereof (or, in the case of a principal prepayment in part, on the amount so
prepaid) at the related Net Rate over (ii) 30 days' interest (or, in the case of
a principal prepayment in full, interest to the date of prepayment) on such
Scheduled Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor
as limited by application of the Relief Act.

         INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.

         INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.

         LENDER-PAID PMI RATE: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the related
insurer, as stated in the Mortgage Loan Schedule.

         LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
related Servicer or the Master Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.

         LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer or the related Servicer has certified that
such Mortgage Loan has become a Liquidated Mortgage Loan.

         LIQUIDATION EXPENSES: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicers in connection with the liquidation of such
Mortgage Loan and the related Mortgage Property, such

                                       19

<PAGE>

expenses including (a) property protection expenses, (b) property sales
expenses, (c) foreclosure and sale costs, including court costs and reasonable
attorneys' fees, and (d) similar expenses reasonably paid or incurred in
connection with liquidation.

         LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise and any Subsequent
Recoveries.

         LOAN GROUP: Loan Group I, Loan Group II or Loan Group III, as
applicable.

         LOAN GROUP I: The group of Mortgage Loans designated as belonging to
Loan Group I on the Mortgage Loan Schedule.

         LOAN GROUP II: The group of Mortgage Loans designated as belonging to
Loan Group II on the Mortgage Loan Schedule.

         LOAN GROUP III: The group of Mortgage Loans designated as belonging to
Loan Group III on the Mortgage Loan Schedule.

         LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.

         LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.02(c)
hereof.

         LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
Scheduled Principal Balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.

         LOST NOTES: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan Schedule.

         MASTER SERVICER: As of the Closing Date, Wells Fargo Bank, National
Association and, thereafter, its respective successors in interest who meet the
qualifications of the Servicing Agreements and this Agreement.

         MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of the
Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time

                                       20

<PAGE>

pursuant to the Sarbanes-Oxley Act of 2002, which in any such case affects the
form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.

         MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"U.S. Bank National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments II Inc., Bear Stearns ARM Trust, Mortgage Pass-Through
Certificates, Series 2004-6 - Master Servicer Collection Account." The Master
Servicer Collection Account shall be an Eligible Account.

         MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.

         MATERIAL DEFECT: The meaning specified in Section 2.02(a).

         MAXIMUM LIFETIME MORTGAGE RATE: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.

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

         MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.

         MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.

         MINIMUM LIFETIME MORTGAGE RATE: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.

         MOM LOAN: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof, or as
nominee for any subsequent assignee of the originator pursuant to an assignment
of mortgage to MERS.

         MONTHLY ADVANCE: An advance of principal or interest required to be
made by the applicable Servicer pursuant to the related Servicing Agreement or
the Master Servicer pursuant to Section 6.05.

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

         MORTGAGE FILE: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.

                                       21

<PAGE>

         MORTGAGE INTEREST RATE: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is initially equal to the "Mortgage Interest Rate" set forth with respect
thereto on the Mortgage Loan Schedule.

         MORTGAGE LOAN: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule (which shall include, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto), including a mortgage loan the property securing which has
become an REO Property.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of July 30, 2004, between EMC Mortgage Corporation, as seller, and
Structured Asset Mortgage Investments II Inc., as purchaser, and all amendments
thereof and supplements thereto, attached as Exhibit J.

         MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.

         MORTGAGE NOTE: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.

         MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property, or, in the case of a Cooperative Loan, the related
Cooperative Lease and Cooperative Stock.

         MORTGAGOR: The obligor on a Mortgage Note.

         NATIONAL CITY: National City Mortgage Co., or its successor in
interest.

         NATIONAL CITY SERVICING AGREEMENT: The Purchase, Warranties and
Servicing Agreement, dated as of October 1, 2001, between the Seller and
National City, attached hereto as Exhibit H-3, as modified by the related
Assignment Agreement.

         NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.

         NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the related Servicer or the Master Servicer in accordance with the related
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Servicer or the Master Servicer and Monthly Advances.

                                       22

<PAGE>

         NET RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Aggregate Expense Rate (expressed as a
per annum rate).

         NON-OFFERED SUBORDINATE CERTIFICATES: The Class B-4, Class B-5 and
Class B-6 Certificates.

         NONRECOVERABLE ADVANCE: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the applicable Servicer and (ii) which, in the
good faith judgment of the Master Servicer, the Trustee or the applicable
Servicer, will not or, in the case of a proposed advance or Monthly Advance,
would not, be ultimately recoverable by the Master Servicer, the Trustee (as
successor Master Servicer) or the applicable Servicer from Liquidation Proceeds,
Insurance Proceeds or future payments on the Mortgage Loan for which such
advance or Monthly Advance was made or is proposed to be made.

         OFFERED CERTIFICATES: The Class I-A-1, Class I-A-2, Class II-A-1, Class
II-A-2, Class III-A, Class R-I, Class R-II, Class B-l, Class B-2 and Class B-3
Certificates.

         OFFERED SUBORDINATE CERTIFICATES: The Class B-l, Class B-2 and Class
B-3 Certificates.

         OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer or
the Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.

         OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Company, the
Master Servicer or the Depositor.

         ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Closing Date.

         ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.

         OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.

         OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the

                                       23
<PAGE>

time such property was acquired by the Trust Fund less any Net Liquidation
Proceeds with respect thereto to the extent applied to principal.

         PASS-THROUGH RATE: As to each Class of Certificates and the REMIC I
Regular Interests, the rate of interest determined as provided with respect
thereto in Section 5.01(c). Any monthly calculation of interest at a stated rate
shall be based upon annual interest at such rate divided by twelve.

         PERIODIC RATE CAP: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.

         PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:

                  (i)......direct obligations of, and obligations the timely
payment of which are fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America;

                  (ii).....(a) demand or time deposits, federal funds or
bankers' acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state thereof
(including the Trustee or the Master Servicer or its Affiliates acting in its
commercial banking capacity) and subject to supervision and examination by
federal and/or state banking authorities, provided that the commercial paper
and/or the short-term debt rating and/or the long-term unsecured debt
obligations of such depository institution or trust company at the time of such
investment or contractual commitment providing for such investment have the
Applicable Credit Rating or better from each Rating Agency and (b) any other
demand or time deposit or certificate of deposit that is fully insured by the
Federal Deposit Insurance Corporation;

                  (iii)....repurchase obligations with respect to (a) any
security described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of America, the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii)(a) above where the
Trustee holds the security therefor;

(iv).....securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer or its Affiliates)
incorporated under the laws of the United States of America or any state thereof
that have the Applicable Credit Rating or better from each Rating Agency at the
time of such investment or contractual commitment providing for such investment;
provided, however, that securities issued by any particular corporation will not
be Permitted Investments to the extent that investments therein will cause the
then outstanding principal amount of securities issued by such corporation and
held as part of the Trust to exceed 10% of the aggregate Outstanding Principal

                                       24
<PAGE>

Balances of all the Mortgage Loans and Permitted Investments held as part of the
Trust;

                  (v)......commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) having
the Applicable Credit Rating or better from each Rating Agency at the time of
such investment;

                  (vi).....a Reinvestment Agreement issued by any bank,
insurance company or other corporation or entity;

                  (vii)....any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency to the Trustee; and

                  (viii)...any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including any such
fund for which the Trustee or Master Servicer or any affiliate of the Trustee or
Master Servicer acts as a manager or an advisor; provided, however, that no
instrument or security shall be a Permitted Investment if such instrument or
security evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or if such security provides for payment
of both principal and interest with a yield to maturity in excess of 120% of the
yield to maturity at par or if such instrument or security is purchased at a
price greater than par.

         PERMITTED TRANSFEREE: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).

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

         PHYSICAL CERTIFICATES: The Residual Certificates and the Private
Certificates.

         PREPAYMENT CHARGE: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.

         PREPAYMENT PERIOD: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.

         PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, if any or any
replacement policy therefor through the related Interest Accrual Period for such
Class relating to a Distribution Date.

                                       25
<PAGE>

         PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it 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, including Insurance Proceeds
and Repurchase Proceeds, but excluding the principal portion of Net Liquidation
Proceeds.

         PRIVATE CERTIFICATES: The Class B-4, Class B-5 and Class B-6
Certificates.

         PROTECTED ACCOUNT: An account established and maintained for the
benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the respective
Servicing Agreements.

         QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.

         QUALIFIED INSURER: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.

         RATING AGENCIES: Moody's and S&P.

         REALIZED LOSS: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation, less (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan and the related
Mortgaged Property. In addition, to the extent the Master Servicer receives
Subsequent Recoveries with respect to any Mortgage Loan, the amount of the
Realized Loss with respect to that Mortgage Loan will be reduced to the extent
such recoveries are applied to reduce the Current Principal Amount of any Class
of Certificates on any Distribution Date.

         RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.

         REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).

         RELIEF ACT: The Servicemembers Civil Relief Act, or similar state law.

         RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.

         REMIC: A real estate mortgage investment conduit, as defined in
the Code.

         REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the Master Servicer
Collection Account, (iii) any REO Property relating to the Mortgage Loans, (iv)
the rights with respect to any related Servicing Agreement, (v) the rights with
respect to any related Assignment Agreement and (vi) any proceeds of the
foregoing.

                                       26
<PAGE>

         REMIC I INTERESTS: The REMIC I Regular Interests and the Class R-I
Certificates.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interests I-A, I-B, II-A,
II-B, III-A, III-B and ZZZ.

         REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificates in the related Certificate Group.

         REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests.

         REMIC II INTERESTS: The REMIC II Regular Certificates and the Class
R-II Certificates.

         REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause any REMIC to fail to qualify as a REMIC while any regular interest in such
REMIC is outstanding, (ii) result in a tax on prohibited transactions with
respect to any REMIC or (iii) constitute a taxable contribution to any REMIC
after the Startup Day.

         REMIC PROVISIONS: The provisions of the federal income tax law relating
to the REMIC, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.

         REO PROPERTY: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.

         REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or Article II of this Agreement, an
amount equal to the sum of (i)(a) 100% of the Outstanding Principal Balance of
such Mortgage Loan as of the date of repurchase (or if the related Mortgaged
Property was acquired with respect thereto, 100% of the Outstanding Principal
Balance at the date of the acquisition), plus (b) accrued but unpaid interest on
the Outstanding Principal Balance at the related Mortgage Interest Rate, through
and including the last day of the month of repurchase, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer of the Mortgage
Loan or to the Master Servicer and (ii) any

                                       27
<PAGE>

costs and damages (if any) incurred by the Trust in connection with any
violation of such Mortgage Loan of any predatory lending laws.

         REPURCHASE PROCEEDS: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in connection
with the substitution of a Mortgage Loan.

         REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.

         REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.

         RESIDUAL CERTIFICATES: Any of the Class R Certificates.

         RESPONSIBLE OFFICER: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other officer
of the Trustee to whom a matter arising hereunder may be referred.

         RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit F-2 hereto.

         S&P: Standard & Poor's, a division of The McGraw-Hill Companies, Inc.,
and its successors in interest.

         SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.

         SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.

         SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) and less (ii) any Principal Prepayments (including the principal portion
of Net Liquidation Proceeds) received during or

                                       28
<PAGE>

prior to the related Prepayment Period; provided that the Scheduled Principal
Balance of a Liquidated Mortgage Loan is zero.

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

         SECURITIES ADMINISTRATOR: Wells Fargo Bank, National Association, or
its successor in interest, or any successor securities administrator appointed
as herein provided.

         SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED [in the case of a Residual Certificate:] UNLESS THE PROPOSED
TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE
DEPOSITOR, TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR AND ON WHICH
THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF
CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A
NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL
NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE

                                       29

<PAGE>

MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE [in the case of the
Class B-4, Class B-5 and Class B-6 Certificates:], UNLESS THE TRANSFEREE
CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I)
WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED
TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE
95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON
THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER,
ANY SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR UNLESS AN OPINION OF COUNSEL
SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED."

         SECURITY AGREEMENT: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.

         SECURITY INSTRUMENT: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.

         SELLER: EMC Mortgage Corporation, as mortgage loan seller under the
Mortgage Loan Purchase Agreement.

         SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class II-A-1, Class
II-A-2, Class III-A, Class R-I and Class R-II Certificates.

         SENIOR OPTIMAL PRINCIPAL AMOUNT: The Group I Senior Optimal Principal
Amount, Group II Senior Optimal Principal Amount or Group III Senior Optimal
Principal Amount, as applicable.

         SENIOR PERCENTAGE: The Group I Senior Percentage, Group II Senior
Percentage or Group III Senior Percentage, as applicable.

         SENIOR PREPAYMENT PERCENTAGE: The Group I Senior Prepayment Percentage,
Group II Senior Prepayment Percentage or Group III Senior Prepayment Percentage,
as applicable.

         SERVICER: With respect to each Mortgage Loan, Countrywide, EverHome or
National City.

         SERVICER REMITTANCE DATE: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.

         SERVICING AGREEMENTS: The Countrywide Servicing Agreement, EverHome
Servicing Agreement and National City Servicing Agreement.

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<PAGE>

         SERVICING FEE: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Scheduled Principal Balance of such Mortgage
Loan as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate.

         SERVICING FEE RATE: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.

         SERVICING OFFICER: Any officer of the related Servicer or Master
Servicer involved in or responsible for the administration and servicing or
master servicing, as applicable, of the Mortgage Loans as to which officer
evidence, reasonably acceptable to the Trustee, of due authorization of such
officer by such Servicer or Master Servicer, has been furnished from time to
time to the Trustee.

         STARTUP DAY: July 30, 2004.

         SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.

         SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution Date,
the amount by which (a) the sum of the Current Principal Amounts of all the
Certificates (after giving effect to the distribution of principal and the
allocation of applicable Realized Losses in reduction of the Current Principal
Amounts of the Certificates on such Distribution Date) exceeds (b) the aggregate
Scheduled Principal Balances of the Mortgage Loans on the Due Date related to
such Distribution Date.

         SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum, without duplication, of the following for the Group I,
Group II and Group III Mortgage Loans (but in no event greater than the
aggregate Current Principal Amount of the Subordinate Certificates immediately
prior to such Distribution Date):

                  (i) the applicable Subordinate Percentage of the principal
                  portion of all Scheduled Payments due on each Outstanding
                  Mortgage Loan in the related Loan Group on the related Due
                  Date as specified in the amortization schedule at the time
                  applicable thereto (after adjustment for previous Principal
                  Prepayments but before any adjustment to such amortization
                  schedule by reason of any bankruptcy or similar proceeding or
                  any moratorium or similar waiver or grace period);

                  (ii) the applicable Subordinate Prepayment Percentage of the
                  Scheduled Principal Balance of each Mortgage Loan in the
                  related Loan Group that was the subject of a Principal
                  Prepayment in full received by the Master Servicer during the
                  related Prepayment Period;

                  (iii) the applicable Subordinate Prepayment Percentage of each
                  Principal Prepayment in part received during the related
                  Prepayment Period with respect to each Mortgage Loan in the
                  related Loan Group;

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<PAGE>

                  (iv) the excess, if any, of (a) all Net Liquidation Proceeds
                  allocable to principal received during the related Prepayment
                  Period in respect of each Liquidated Mortgage Loan in the
                  related Loan Group and all Subsequent Recoveries received in
                  respect of each Liquidated Mortgage Loan in the related Loan
                  Group during the related Due Period over (b) the sum of the
                  amounts distributable to the related Senior Certificateholders
                  pursuant to clause (iv) of the related definition of Senior
                  Optimal Principal Amount on such Distribution Date;

                  (v) the applicable Subordinate Prepayment Percentage of the
                  sum of (a) the Scheduled Principal Balance of each Mortgage
                  Loan in the related Loan Group which was purchased with
                  respect to such Distribution Date and (b) the difference, if
                  any, between the Scheduled Principal Balance of each Mortgage
                  Loan in the related Loan Group that has been replaced by the
                  Seller with a Substitute Mortgage Loan pursuant to the
                  Mortgage Loan Purchase Agreement in connection with such
                  Distribution Date over the Scheduled Principal Balance of each
                  such Substitute Mortgage Loan; and

                  (vi) on the Distribution Date on which the Current Principal
                  Amounts of the Group I Senior Certificates, Group II Senior
                  Certificates or Group III Senior Certificates have all been
                  reduced to zero, 100% of the related Senior Optimal Principal
                  Amount. After the aggregate Current Principal Amount of the
                  Subordinate Certificates has been reduced to zero, the
                  Subordinate Optimal Principal Amount shall be zero.

         SUBORDINATE PERCENTAGE: The Group I Subordinate Percentage, Group II
Subordinate Percentage or Group III Subordinate Percentage with respect to the
Group I Mortgage Loans, Group II Mortgage Loans and Group III Mortgage Loans,
respectively.

         SUBORDINATE PREPAYMENT PERCENTAGE: The Group I Subordinate Prepayment
Percentage, Group II Subordinate Prepayment Percentage or Group III Subordinate
Prepayment Percentage with respect to the Group I Mortgage Loans, Group II
Mortgage Loans and Group III Mortgage Loans, respectively.

         SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer during the related Due Period or surplus amounts held by the
Master Servicer to cover estimated expenses (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically related to a
Liquidated Mortgage Loan or disposition of an REO Property prior to the related
Prepayment Period that resulted in a Realized Loss, after the liquidation or
disposition of such Mortgage Loan.

         SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i)
which has an Outstanding Principal Balance not greater nor materially less than
the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such

                                       32
<PAGE>

Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any
Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.

         TAX ADMINISTRATION AND TAX MATTERS PERSON: The Securities Administrator
or any successor thereto or assignee thereof shall serve as tax administrator
hereunder and as agent for the Tax Matters Person. The Holder of each Class of
Residual Certificates shall be the Tax Matters Person for the related REMIC, as
more particularly set forth in Section 9.12 hereof.

         TERMINATION PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.

         TRUST FUND OR TRUST: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).

         TRUSTEE: U.S. Bank National Association, or its successor in interest,
or any successor trustee appointed as herein provided.

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to any REMIC I Regular
Interest as of any Distribution Date, the initial principal amount of such
Regular Interest, reduced by (i) all amounts distributed on previous
Distribution Dates on such Regular Interest with respect to principal, and (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Regular Interest, taking account of the Loss
Allocation Limitation.

         UNDERLYING SELLER: With respect to each Mortgage Loan, Countrywide,
EverHome or National City, as indicated on the Mortgage Loan Schedule.

         UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or related
REO Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.

         UNITED STATES PERSON: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class R Certificates, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either

                                       33
<PAGE>

directly or through any entity that is not a corporation for United States
federal income tax purposes are United States Persons, or an estate whose income
is subject to United States federal income tax regardless of its source, or a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more such United
States Persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
which have not yet been issued, a trust which was in existence on August 20,
1996 (other than a trust treated as owned by the grantor under subpart E of part
I of subchapter J of chapter 1 of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a United
States person notwithstanding the previous sentence.

                                       34

<PAGE>

                                   ARTICLE II
                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

         Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE.

         (a) The Depositor concurrently with the execution and delivery of this
Agreement, sells, transfers and assigns to the Trust without recourse all its
right, title and interest in and to (i) the Mortgage Loans identified in the
Mortgage Loan Schedule, including all interest and principal due with respect to
the Mortgage Loans after the Cut-off Date, but excluding any payments of
principal and interest due on or prior to the Cut-off Date; (ii) such assets as
shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Master Servicer Collection Account, (iii) such
assets relating to the Mortgage Loans as from time to time may be held by the
Servicers in Protected Accounts, the Master Servicer in the Master Servicer
Collection Account and the Trustee in the Distribution Account, (iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid or payable by
the insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent provided in
Subsection 2.03(a), (vii) the rights with respect to the Servicing Agreements as
assigned to the Trustee on behalf of the Certificateholders by the Assignment
Agreements, (viii) the Class R Deposit and (ix) any proceeds of the foregoing.
Although it is the intent of the parties to this Agreement that the conveyance
of the Depositor's right, title and interest in and to the Mortgage Loans and
other assets in the Trust Fund pursuant to this Agreement shall constitute a
purchase and sale and not a loan, in the event that such conveyance is deemed to
be a loan, it is the intent of the parties to this Agreement that the Depositor
shall be deemed to have granted to the Trustee a first priority perfected
security interest in all of the Depositor's right, title and interest in, to and
under the Mortgage Loans and other assets in the Trust Fund, and that this
Agreement shall constitute a security agreement under applicable law.

         (b) In connection with the above transfer and assignment, the Depositor
hereby delivers to the Custodian, as agent for the Trustee, with respect to (I)
each Mortgage Loan (other than a Cooperative Loan):

                  (i) the original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or lost note
affidavit together with a copy of the related Mortgage Note;

                  (ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (w) in the proviso below applies, shall be in recordable form);

                  (iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if permitted
in the jurisdiction in

                                       35
<PAGE>

which the Mortgaged Property is located) to "U.S. Bank National Association, as
Trustee", with evidence of recording with respect to each Mortgage Loan in the
name of the Trustee thereon (or if clause (w) in the proviso below applies or
for Mortgage Loans with respect to which the related Mortgaged Property is
located in a state other than Maryland or an Opinion of Counsel has been
provided as set forth in this Section 2.01(b), shall be in recordable form);

                  (iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Depositor with evidence of
recording thereon;

                  (v) the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;

                  (vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance; and

                  (vii) originals of all modification agreements, if applicable
and available.

and (II) with respect to each Cooperative Loan so assigned:

                  (i) The original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or lost note
affidavit, together with a copy of the related Mortgage Note;

                  (ii) A counterpart of the Cooperative Lease and the Assignment
of Proprietary Lease to the originator of the Cooperative Loan with intervening
assignments showing an unbroken chain of title from such originator to the
Trustee;

                  (iii) The related Cooperative Stock Certificate, representing
the related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument) executed in
blank;

                  (iv) The original recognition agreement by the Cooperative of
the interests of the mortgagee with respect to the related Cooperative Loan and
any transfer documents related to the recognition agreement;

                  (v) The Security Agreement;

                  (vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative Loan as
secured party, each with evidence of recording thereof, evidencing the interest
of the originator under the Security Agreement and the Assignment of Proprietary
Lease;

                  (vii) Copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of title from
the originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement and the
Assignment of Proprietary Lease;

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<PAGE>

                  (viii) An executed assignment of the interest of the
originator in the Security Agreement and Assignment of Proprietary Lease,
showing an unbroken chain of title from the originator to the Trustee; and

                  (ix) The original of each modification, assumption agreement
or preferred loan agreement, if any, relating to such Cooperative Loan;

PROVIDED, HOWEVER, that in lieu of the foregoing, the Depositor may deliver to
the Custodian, as agent of the Trustee, the following documents, under the
circumstances set forth below: (w) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Depositor in time to permit their delivery as specified above, the Depositor may
deliver a true copy thereof with a certification by the Depositor, on the face
of such copy, substantially as follows: "Certified to be a true and correct copy
of the original, which has been transmitted for recording"; (x) in lieu of the
Security Instrument, assignment to the Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification from the Depositor to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified on Exhibit 5 to the Mortgage
Loan Purchase Agreement, the Depositor may deliver lost note affidavits from the
Seller; and (z) the Depositor shall not be required to deliver intervening
assignments or Mortgage Note endorsements between the related Underlying Seller
and the Seller, between the Seller and the Depositor, and between the Depositor
and the Trustee; and provided, further, however, that in the case of Mortgage
Loans which have been prepaid in full after the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of delivering the above documents, may
deliver to the Trustee or the Custodian, as its agent, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans in
the Master Servicer Collection Account on the Closing Date. The Depositor shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the Trustee or the Custodian,
as its agent, promptly after they are received. The Depositor shall cause the
Seller, at its expense, to cause each assignment of the Security Instrument to
the Trustee to be recorded not later than 180 days after the Closing Date,
unless (a) such recordation is not required by the Rating Agencies or an Opinion
of Counsel addressed to the Trustee has been provided to the Trustee (with a
copy to the Custodian) which states that recordation of such Security Instrument
is not required to protect the interests of the Certificateholders in the
related Mortgage Loans or (b) MERS is identified on the Mortgage or on a
properly recorded assignment of the Mortgage as the mortgagee of record solely
as nominee for the Seller and its successor and assigns; provided, however,
notwithstanding the foregoing, each assignment shall be submitted for recording
by the Seller in the manner described above, at no expense to the Trust or the
Trustee or the Custodian, as its agent, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust, (ii) the
occurrence of an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure

                                       37

<PAGE>

relating to the Seller and (iv) the occurrence of a servicing transfer as
described in Section 8.02 hereof. Notwithstanding the foregoing, if the Seller
fails to pay the cost of recording the assignments, such expense will be paid by
the Trustee and the Trustee shall be reimbursed for such expenses by the Trust
in accordance with Section 9.05.

         Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE.

         (a) The Trustee acknowledges the sale, transfer and assignment of the
Trust Fund to it by the Depositor and receipt of, subject to further review and
the exceptions which may be noted pursuant to the procedures described below,
and declares that it holds, the documents (or certified copies thereof)
delivered to the Custodian, as its agent, pursuant to Section 2.01, and declares
that it will continue to hold those documents and any amendments, replacements
or supplements thereto and all other assets of the Trust Fund delivered to it as
Trustee in trust for the use and benefit of all present and future Holders of
the Certificates. On the Closing Date, the Custodian, with respect to the
Mortgage Loans, shall acknowledge with respect to each Mortgage Loan by delivery
to the Depositor and the Trustee of an Initial Certification receipt of the
Mortgage File, but without review of such Mortgage File, except to the extent
necessary to confirm that such Mortgage File contains the related Mortgage Note
or lost note affidavit. No later than 90 days after the Closing Date (or, with
respect to any Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor and the Trustee an Interim Certification. In
conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the Mortgage
Loan Schedule, whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in the Mortgage Loan Schedule. In
performing any such review, the Trustee or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee or the Custodian, as its agent, finds any document constituting part of
the Mortgage File has not been executed or received, or to be unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in Exhibit B or to appear
defective on its face (a "Material Defect"), the Trustee or the Custodian, as
its agent, shall promptly notify the Seller. In accordance with the Mortgage
Loan Purchase Agreement, the Seller shall correct or cure any such defect within
ninety (90) days from the date of notice from the Trustee or the Custodian, as
its agent, of the defect and if the Seller fails to correct or cure the defect
within such period, and such defect materially and adversely affects the
interests of the Certificateholders in the related Mortgage Loan, the Trustee
shall enforce the Seller's obligation under the Mortgage Loan Purchase Agreement
to, within 90 days from the Trustee's or the Custodian's notification, provide a
Substitute Mortgage Loan (if within two years of the Closing Date) or purchase
such Mortgage Loan at the Repurchase Price; provided that, if such defect would
cause the Mortgage Loan to be other than a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code, any such cure or repurchase must occur within 90
days from the date such breach was discovered; provided, however, that if such
defect relates solely to the inability

                                       38

<PAGE>

of the Seller to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy because the originals of such
documents, or a certified copy have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if
the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Seller within thirty days of its receipt of the
original recorded document.

         (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Depositor and the Trustee a Final Certification.
In conducting such review, the Trustee or the Custodian, as its agent, will
ascertain whether an original of each document required to be recorded has been
returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office. If the Trustee or
the Custodian, as its agent, finds a Material Defect, the Trustee or the
Custodian, as its agent, shall promptly notify the Seller (provided, however,
that with respect to those documents described in subsections (b)(I)(iv), (v)
and (vii) of Section 2.01 and subsection (b)(II)(ix) of Section 2.01, the
Trustee's and Custodian's obligations shall extend only to the documents
actually delivered to the Custodian pursuant to such subsections). In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such defect within 90 days from the date of notice from the Trustee or the
Custodian, as its agent, of the Material Defect and if the Seller is unable to
cure such defect within such period, and if such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Trustee shall enforce the Seller's obligation under the Mortgage Loan
Purchase Agreement to, within 90 days from the Trustee's or Custodian's
notification, provide a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase such Mortgage Loan at the Repurchase Price, provided
that, if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
repurchase or substitution must occur within 90 days from the date such breach
was discovered, provided, however, that if such defect relates solely to the
inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy, because the originals of
such documents or a certified copy, have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan,
if the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or

                                       39

<PAGE>

the Custodian, as its agent, shall be effected by the Seller within thirty days
of its receipt of the original recorded document.

         (c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Securities Administrator
and the Trustee written notification detailing the components of the Repurchase
Price. Upon deposit of the Repurchase Price in the Master Servicer Collection
Account, the Depositor shall notify the Trustee and the Custodian, as agent of
the Trustee (upon receipt of a Request for Release in the form of Exhibit D
attached hereto with respect to such Mortgage Loan), shall release to the Seller
the related Mortgage File and the Trustee shall execute and deliver all
instruments of transfer or assignment, without recourse, representation or
warranty, furnished to it by the Seller, as are necessary to vest in the Seller
title to and rights under the Mortgage Loan. Such purchase shall be deemed to
have occurred on the date on which the Repurchase Price in available funds is
received by the Trustee. The Trustee shall amend the Mortgage Loan Schedule,
which was previously delivered to it by the Depositor in a form agreed to
between the Depositor and the Trustee, to reflect such repurchase and shall
promptly notify the Rating Agencies and the Master Servicer of such amendment.
The obligation of the Seller to repurchase or substitute for any Mortgage Loan a
Substitute Mortgage Loan as to which such a defect in a constituent document
exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.

         Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT.

         (a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to the Depositor's rights and
obligations pursuant to the Servicing Agreements (noting that the Seller has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies). The obligations of the Seller to
substitute or repurchase, as applicable, a Mortgage Loan shall be the Trustee's
and the Certificateholders' sole remedy for any breach thereof. At the request
of the Trustee, the Depositor shall take such actions as may be necessary to
enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.

         (b) If the Depositor, the Securities Administrator or the Trustee
discovers a breach of any of the representations and warranties set forth in the
Mortgage Loan Purchase Agreement, which breach materially and adversely affects
the value of the interests of Certificateholders or the Trustee in the related
Mortgage Loan, the party discovering the breach shall give prompt written notice
of the breach to the other parties. The Seller, within 90 days of its discovery
or receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, shall
purchase the Mortgage Loan or any property acquired with respect thereto from
the Trustee; provided, however, that if there is a breach of any

                                       40

<PAGE>

representation set forth in the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable, and the Mortgage Loan or the related property
acquired with respect thereto has been sold, then the Seller shall pay, in lieu
of the Repurchase Price, any excess of the Repurchase Price over the Net
Liquidation Proceeds received upon such sale. If the Net Liquidation Proceeds
exceed the Repurchase Price, any excess shall be paid to the Seller to the
extent not required by law to be paid to the borrower. Any such purchase by the
Seller shall be made by providing an amount equal to the Repurchase Price to the
Master Servicer for deposit in the Master Servicer Collection Account and
written notification detailing the components of such Repurchase Price. The
Depositor shall notify the Trustee and submit to the Custodian, as agent for the
Trustee, a Request for Release, and the Custodian shall release, or the Trustee
shall cause the Custodian to release, to the Seller the related Mortgage File
and the Trustee shall execute and deliver all instruments of transfer or
assignment furnished to it by the Seller, without recourse, representation or
warranty as are necessary to vest in the Seller title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Master Servicer shall amend the
Mortgage Loan Schedule to reflect such repurchase and shall promptly notify the
Trustee and the Rating Agencies of such amendment. Enforcement of the obligation
of the Seller to purchase (or substitute a Substitute Mortgage Loan for) any
Mortgage Loan or any property acquired with respect thereto (or pay the
Repurchase Price as set forth in the above proviso) as to which a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.

         Section 2.04 SUBSTITUTION OF MORTGAGE LOANS.

         Notwithstanding anything to the contrary in this Agreement, in lieu of
purchasing a Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 of this Agreement, the Seller may, no later than the date
by which such purchase by the Seller would otherwise be required, tender to the
Trustee a Substitute Mortgage Loan accompanied by a certificate of an authorized
officer of the Seller that such Substitute Mortgage Loan conforms to the
requirements set forth in the definition of "Substitute Mortgage Loan" in this
Agreement; provided, however, that substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day; provided, further, that if the breach would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or substitution must occur within 90 days
from the date the breach was discovered. The Custodian, as agent for the
Trustee, shall examine the Mortgage File for any Substitute Mortgage Loan in the
manner set forth in Section 2.02(a) and the Trustee or the Custodian, as its
agent, shall notify the Seller, in writing, within five Business Days after
receipt, whether or not the documents relating to the Substitute Mortgage Loan
satisfy the requirements of the fifth sentence of Subsection 2.02(a). Within two
Business Days after such notification, the Seller shall provide to the Trustee
for deposit in the Distribution Account the amount, if any, by which the
Outstanding Principal Balance as of the next preceding Due Date of the Mortgage
Loan for which substitution is being made, after giving effect to the Scheduled
Principal due on such date, exceeds the Outstanding Principal Balance as of such
date

                                       41
<PAGE>

of the Substitute Mortgage Loan, after giving effect to Scheduled Principal due
on such date, which amount shall be treated for the purposes of this Agreement
as if it were the payment by the Seller of the Repurchase Price for the purchase
of a Mortgage Loan by the Seller. After such notification to the Seller and, if
any such excess exists, upon receipt of such deposit, the Trustee shall accept
such Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage
Loan hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Fund and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Trust Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery to
the Custodian of a Request for Release for such Mortgage Loan), the Custodian,
as agent for the Trustee, shall release to the Seller the related Mortgage File
related to any Mortgage Loan released pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and shall execute
and deliver all instruments of transfer or assignment, without recourse,
representation or warranty in form as provided to it as are necessary to vest in
the Seller title to and rights under any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable. The Seller shall deliver to the Custodian the documents related to
the Substitute Mortgage Loan in accordance with the provisions of the Mortgage
Loan Purchase Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement, as
applicable, with the date of acceptance of the Substitute Mortgage Loan deemed
to be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the Mortgage Loan
Purchase Agreement shall be deemed to have been made by the Seller with respect
to each Substitute Mortgage Loan as of the date of acceptance of such Mortgage
Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan Schedule
to reflect such substitution and shall provide a copy of such amended Mortgage
Loan Schedule to the Trustee and the Rating Agencies.

         Section 2.05 ISSUANCE OF CERTIFICATES.

         (a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the other assets comprising the Trust Fund and, concurrently therewith, has
signed, and countersigned and delivered to the Depositor, in exchange therefor,
Certificates in such authorized denominations representing such Fractional
Undivided Interests as the Depositor has requested. The Trustee agrees that it
will hold the Mortgage Loans and such other assets as may from time to time be
delivered to it segregated on the books of the Trustee in trust for the benefit
of the Certificateholders.

         (b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests, and the other assets of REMIC II for the
benefit of the holders of the REMIC II Certificates. The Trustee

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<PAGE>

acknowledges receipt of the REMIC I Regular Interests (which are uncertificated)
and the other assets of REMIC II and declares that it holds and will hold the
same in trust for the exclusive use and benefit of the holders of the REMIC II
Certificates.

         Section 2.06 REPRESENTATIONS AND WARRANTIES CONCERNING THE DEPOSITOR.

         The Depositor hereby represents and warrants to the Trustee, the Master
Servicer and the Securities Administrator as follows:

                  (i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Depositor's business as presently conducted or on the Depositor's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;

                  (ii) the Depositor has full corporate power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;

                  (iii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Depositor; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or its properties
or the articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Depositor's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;

                  (iv) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made;

                  (v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Depositor
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally);

                  (vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this

                                       43

<PAGE>

Agreement or (ii) with respect to any other matter which in the judgment of the
Depositor will be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect the Depositor's
ability to enter into this Agreement or perform its obligations under this
Agreement; and the Depositor is not in default with respect to any order of any
court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this Agreement;
and

                  (vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each Mortgage were not subject to an assignment
or pledge, and the Depositor had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell such Mortgage Loan to the
Trustee free and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest.

                                       44
<PAGE>

                                  ARTICLE III
                 Administration and Servicing of Mortgage Loans

         Section 3.01 MASTER SERVICER.

         The Master Servicer shall supervise, monitor and oversee the obligation
of the Servicers to service and administer their respective Mortgage Loans in
accordance with the terms of the applicable Servicing Agreements and shall have
full power and authority to do any and all things which it may deem necessary or
desirable in connection with such master servicing and administration. In
performing its obligations hereunder, the Master Servicer shall act in a manner
consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with each Servicer as necessary from
time-to-time to carry out the Master Servicer's obligations hereunder, shall
receive, review and evaluate all reports, information and other data provided to
the Master Servicer by each Servicer and shall cause each Servicer to perform
and observe the covenants, obligations and conditions to be performed or
observed by such Servicer under its applicable Servicing Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information, the
Master Servicer shall provide such information to the Securities Administrator
as shall be necessary in order for it to prepare the statements specified in
Section 6.04, and prepare any other information and statements required to be
forwarded by the Master Servicer hereunder. The Master Servicer shall reconcile
the results of its Mortgage Loan monitoring with the actual remittances of the
Servicers pursuant to the applicable Servicing Agreements.

         The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicers and the Master Servicer to service and
administer the related Mortgage Loans and REO Property.

         The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.

         The Trustee shall execute and deliver to the related Servicer and the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain

                                       45
<PAGE>

a deficiency judgment against the Mortgagor; or (iv) enforce any other rights or
remedies provided by the Mortgage Note or Security Instrument or otherwise
available at law or equity.

         Section 3.02 REMIC-RELATED COVENANTS.

         For as long as each REMIC shall exist, the Trustee and the Securities
Administrator shall act in accordance herewith to assure continuing treatment of
such REMIC as a REMIC, and the Trustee and the Securities Administrator shall
comply with any directions of the Depositor, the related Servicer or the Master
Servicer to assure such continuing treatment. In particular, the Trustee shall
not (a) sell or permit the sale of all or any portion of the Mortgage Loans or
of any investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received a REMIC Opinion addressed to the Trustee prepared at the expense of the
Trust Fund; and (b) other than with respect to a substitution pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, accept any contribution to any REMIC after the Startup Day without
receipt of a REMIC Opinion addressed to the Trustee .

         Section 3.03 MONITORING OF SERVICERS.

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

         (b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any

                                       46
<PAGE>

legal action except to the extent that the Master Servicer shall have received
reasonable indemnity for its costs and expenses in pursuing such action.

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

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

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

         Section 3.04 FIDELITY BOND.

         The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.

         Section 3.05 POWER TO ACT; PROCEDURES.

         The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Article X hereof, to do any and all things that it may deem
necessary or desirable in connection with the master servicing and
administration of the Mortgage Loans, including but not limited to the power and
authority (i) to execute and deliver, on behalf of the Certificateholders and
the Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 3.03, shall
not permit any Servicer to) knowingly or intentionally take any action, or fail
to take (or fail to cause to be taken) any action reasonably within its

                                       47
<PAGE>

control and the scope of duties more specifically set forth herein, that, under
the REMIC Provisions, if taken or not taken, as the case may be, would cause any
REMIC to fail to qualify as a REMIC or result in the imposition of a tax upon
the Trust Fund (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) unless the Master Servicer has
received an Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action would not cause any REMIC to fail to
qualify as a REMIC or result in the imposition of a tax upon any REMIC. The
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney empowering the Master Servicer or any
Servicer to execute and deliver instruments of satisfaction or cancellation, or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the applicable Servicing Agreement and this Agreement, and the Trustee
shall execute and deliver such other documents, as the Master Servicer may
request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.

         Section 3.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.

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

         Section 3.07 RELEASE OF MORTGAGE FILES.

         (a) Upon becoming aware of the payment in full of any Mortgage Loan, or
the receipt by any Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will, if required
under the applicable Servicing Agreement (or if the Servicer does not, the
Master Servicer may), promptly furnish to the Custodian, on behalf of the
Trustee, two copies of a certification substantially in the form of Exhibit D
hereto signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect
that all amounts

                                       48
<PAGE>

received in connection with such payment that are required to be deposited in
the Protected Account maintained by the applicable Servicer pursuant to Section
4.01 or by the applicable Servicer pursuant to its Servicing Agreement have been
or will be so deposited) and shall request that the Custodian, on behalf of the
Trustee, deliver to the applicable Servicer the related Mortgage File. Upon
receipt of such certification and request, the Custodian, on behalf of the
Trustee, shall promptly release the related Mortgage File to the applicable
Servicer and the Trustee and Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, each Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.

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

         Section 3.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE.

         (a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable

                                       49
<PAGE>

Servicing Agreement. The Master Servicer shall, and (to the extent provided in
the applicable Servicing Agreement) shall cause each Servicer to, provide access
to information and documentation regarding the Mortgage Loans to the Trustee,
its agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.

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

         Section 3.09  STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

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

         (b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 and 4.03. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance if the Mortgagor defaults in its obligation to do
so shall be added to the amount owing under the Mortgage Loan where the terms of
the Mortgage Loan so permit; provided, however, that the addition of any such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.

                                       50
<PAGE>

         Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.

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

         Section 3.11  MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

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

         (b) The Master Servicer agrees to present, or to cause each Servicer
(to the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to Sections
4.02 and 4.03.

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

         The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of any
Primary Mortgage Insurance Policies, or certificate of insurance if applicable,
and any certificates of renewal as to the foregoing as may

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be issued from time to time as contemplated by this Agreement. Until all amounts
distributable in respect of the Certificates have been distributed in full and
the Master Servicer otherwise has fulfilled its obligations under this
Agreement, the Trustee (or its Custodian, if any, as directed by the Trustee)
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee (or the
Custodian, as directed by the Trustee), upon the execution or receipt thereof
the originals of any Primary Mortgage Insurance Policies, any certificates of
renewal, and such other documents or instruments that constitute portions of the
Mortgage File that come into the possession of the Master Servicer from time to
time.

         Section 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS.

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

         Section 3.14 COMPENSATION FOR THE MASTER SERVICER.

         The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor except as provided
in this Agreement.

         Section 3.15 REO PROPERTY.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

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

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<PAGE>

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

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

         Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

         (a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2005, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that any Servicer has failed
to perform any of its duties, responsibilities and obligations under its
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.

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

         Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT.

         If the Master Servicer has, during the course of any fiscal year,
directly serviced any of the Mortgage Loans, then the Master Servicer at its
expense shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Depositor on or before March 1 of each year, commencing on March 1, 2005

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<PAGE>

to the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Freddie Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies. If such report discloses exceptions that are material, the Master
Servicer shall advise the Trustee whether such exceptions have been or are
susceptible of cure, and will take prompt action to do so.

         Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.

         Within 15 days after each Distribution Date, the Securities
Administrator shall, in accordance with industry standards, file with the
Commission via the Electronic Data Gathering and Retrieval System ("EDGAR"), a
Form 8-K (or other comparable Form containing the same or comparable information
or other information mutually agreed upon) with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30 in any year, the Securities Administrator shall, in accordance with
industry standards and only if instructed by the Depositor, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i)
March 15, 2005 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 15 of each year thereafter, the Master Servicer shall
provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of each Servicer, in each case, required to be
delivered pursuant to the related Servicing Agreement, and, if applicable, the
annual independent accountant's servicing report and annual statement of
compliance to be delivered by the Master Servicer pursuant to Sections 3.16 and
3.17. Prior to (i) March 31, 2005, or such earlier filing date as may be
required by the Commission, and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, March 31 of each year thereafter, or such earlier
filing date as may be required by the Commission, the Securities Administrator
shall file a Form 10-K, in substance conforming to industry standards, with
respect to the Trust. Such Form 10-K shall include the Master Servicer
Certification and other documentation provided by the Master Servicer pursuant
to the second preceding sentence. The Depositor hereby grants to the Securities
Administrator a limited power of attorney to execute 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 Securities Administrator 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 Securities
Administrator, from time to time upon request, such further information, reports
and financial statements within its control related to

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<PAGE>

this Agreement and the Mortgage Loans as the Securities Administrator reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Securities Administrator shall have no responsibility to file any items
other than those specified in this Section 3.18; provided, however, the
Securities Administrator will cooperate with the Depositor in connection with
any additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Fees and expenses incurred by the Securities Administrator in connection
with this Section 3.18 shall not be reimbursable from the Trust Fund.

         Section 3.19 THE COMPANY.

         On the Closing Date, the Company will receive from the Depositor a
payment of $5,000.

         Section 3.20 UCC.

         The Depositor shall inform the Trustee in writing of any Uniform
Commercial Code financing statements that were filed on the Closing Date in
connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the
Depositor. The Trustee agrees to monitor and notify the Depositor if any
continuation statements for such Uniform Commercial Code financing statements
need to be filed. If directed by the Depositor in writing, the Trustee will file
any such continuation statements solely at the expense of the Depositor. The
Depositor shall file any financing statements or amendments thereto required by
any change in the Uniform Commercial Code.

         Section 3.21 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.

         (a) With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, the Company shall have the right to purchase such Mortgage Loan from
the Trust at a price equal to the Repurchase Price; provided however (i) that
such Mortgage Loan is still 90 days or more delinquent or is an REO Property as
of the date of such purchase and (ii) this purchase option, if not theretofore
exercised, shall terminate on the date prior to the last day of the related
Calendar Quarter. This purchase option, if not exercised, shall not be
thereafter reinstated unless the delinquency is cured and the Mortgage Loan
thereafter again becomes 90 days or more delinquent or becomes an REO Property,
in which case the option shall again become exercisable as of the first day of
the related Calendar Quarter.

         (b) If at any time the Company remits to the Master Servicer a payment
for deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and the Company provides to the
Trustee a certification signed by a Servicing Officer stating that the amount of
such payment has been deposited in the Master Servicer Collection Account, then
the Trustee shall execute the assignment of such Mortgage Loan to the Company at
the request of the Company without recourse, representation or warranty and the
Company shall succeed to all of the Trustee's right, title and interest in and
to such Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. The Company
will thereupon own such Mortgage, and all such

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<PAGE>

security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.

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                                   ARTICLE IV
                                    Accounts

         Section 4.01 PROTECTED ACCOUNTS.

         (a) The Master Servicer shall enforce the obligation of each Servicer
to establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within 48
hours (or as of such other time specified in the related Servicing Agreement) of
receipt, all collections of principal and interest on any Mortgage Loan and any
REO Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, and advances made from the Servicer's own funds
(less servicing compensation as permitted by the applicable Servicing Agreement
in the case of any Servicer) and all other amounts to be deposited in the
Protected Account. The Servicer is hereby authorized to make withdrawals from
and deposits to the related Protected Account for purposes required or permitted
by this Agreement. To the extent provided in the related Servicing Agreement,
the Protected Account shall be held by a Designated Depository Institution and
segregated on the books of such institution in the name of the Trustee for the
benefit of Certificateholders.

         (b) To the extent provided in the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Permitted Investments in
the name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds. Such
Permitted Investments shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Servicer under the applicable Servicing Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the related Servicer. The
related Servicer (to the extent provided in the Servicing Agreement) shall
deposit the amount of any such loss in the Protected Account within two Business
Days of receipt of notification of such loss but not later than the second
Business Day prior to the Distribution Date on which the moneys so invested are
required to be distributed to the Certificateholders.

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

                  (i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by such Servicer pursuant to its Servicing
Agreement which were due on or before the related Due Date, net of the amount
thereof comprising its Servicing Fee or any fees with respect to any lender-paid
primary mortgage insurance policy;

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<PAGE>

                  (ii) Full Principal Prepayments and any Liquidation Proceeds
received by such Servicer with respect to the Mortgage Loans in the related
Prepayment Period, with interest to the date of prepayment or liquidation, net
of the amount thereof comprising its Servicing Fee;

                  (iii) Partial Principal Prepayments received by such Servicer
for the Mortgage Loans in the related Prepayment Period; and

                  (iv) Any amount to be used as a Monthly Advance.

         (d) Withdrawals may be made from an Account only to make remittances as
provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or
a Servicer for Monthly Advances which have been recovered by subsequent
collections from the related Mortgagor; to remove amounts deposited in error; to
remove fees, charges or other such amounts deposited on a temporary basis; or to
clear and terminate the account at the termination of this Agreement in
accordance with Section 10.01. As provided in Sections 4.01(a) and 4.02(b)
certain amounts otherwise due to the Servicers may be retained by them and need
not be deposited in the Master Servicer Collection Account.

         Section 4.02 MASTER SERVICER COLLECTION ACCOUNT.

         (a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer Collection Account shall be an Eligible Account. The Master Servicer
will deposit in the Master Servicer Collection Account as identified by the
Master Servicer and as received by the Master Servicer, the following amounts:

                  (i) Any amounts withdrawn from a Protected Account;

                  (ii) Any Monthly Advance and any Compensating Interest
Payments;

                  (iii) Any Insurance Proceeds or Net Liquidation Proceeds
received by or on behalf of the Master Servicer or which were not deposited in a
Protected Account;

                  (iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 hereof, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of a Repurchase Price in
connection with the tender of a Substitute Mortgage Loan by the Seller, the
Repurchase Price with respect to any Mortgage Loans purchased by the Company
pursuant to Section 3.21, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Depositor or its designee
pursuant to Section 10.01;

                  (v) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and

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

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<PAGE>

         (b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix) and (x), need not be credited by the
Master Servicer or the related Servicer to the Distribution Account or the
Master Servicer Collection Account, as applicable. In the event that the Master
Servicer shall deposit or cause to be deposited to the Distribution Account any
amount not required to be credited thereto, the Trustee, upon receipt of a
written request therefor signed by a Servicing Officer of the Master Servicer,
shall promptly transfer such amount to the Master Servicer, any provision herein
to the contrary notwithstanding.

         (c) The amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Account. The risk of loss of moneys
required to be distributed to the Certificateholders resulting from such
investments shall be borne by and be the risk of the Master Servicer. The Master
Servicer shall deposit the amount of any such loss in the Master Servicer
Collection Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Distribution Date
on which the moneys so invested are required to be distributed to the
Certificateholders.

         Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT.

         (a) The Master Servicer will, from time to time on demand of a Servicer
or the Securities Administrator, make or cause to be made such withdrawals or
transfers from the Master Servicer Collection Account as the Master Servicer has
designated for such transfer or withdrawal pursuant to this Agreement and the
related Servicing Agreement. The Master Servicer may clear and terminate the
Master Servicer Collection Account pursuant to Section 10.01 and remove amounts
from time to time deposited in error.

         (b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses, costs and liabilities
recoverable by the Trustee, the Master Servicer or the Securities Administrator
or the Custodian pursuant to Sections 3.03, 7.04 and 9.05 and (ii) any amounts
payable to the Master Servicer as set forth in Section 3.14; provided, however,
that the Master Servicer shall be obligated to pay from its own funds any
amounts which it is required to pay under Section 7.03(a).

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<PAGE>

         (c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.

         (d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.

         Section 4.04 DISTRIBUTION ACCOUNT.

         (a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Distribution Account as
a segregated trust account or accounts.

         (b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.

         (c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) held in cash and fully insured by the FDIC to
the maximum coverage provided thereby or (ii) invested in the name of the
Trustee, in such Permitted Investments as may be selected by the Master Servicer
or deposited in demand deposits with such depository institutions as may be
selected by the Master Servicer, provided that time deposits of such depository
institutions would be a Permitted Investment. All Permitted Investments shall
mature or be subject to redemption or withdrawal on or before, and shall be held
until, the next succeeding Distribution Date if the obligor for such Permitted
Investment is the Trustee or, if such obligor is any other Person, the Business
Day preceding such Distribution Date. All investment earnings on amounts on
deposit in the Distribution Account or benefit from funds uninvested therein
from time to time shall be for the account of the Master Servicer. The Master
Servicer shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Distribution Account on each Distribution Date. If
there is any loss on a Permitted Investment or demand deposit, the Master
Servicer shall remit the amount of the loss to the Trustee who shall deposit
such amount in the Distribution Account. With respect to the Distribution
Account and the funds deposited therein, the Master Servicer shall take such
action as may be necessary to ensure that the Certificateholders shall be
entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e),
and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.

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         Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.

         (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):

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

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

                  (iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master Servicer
or such Servicer from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan; provided that
the Master Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any amounts with
respect to such Mortgage Loan were paid as Excess Liquidation Proceeds pursuant
to clause (viii) of this Subsection 4.05 (a) to the Master Servicer; and (ii)
such Liquidation Expenses were not included in the computation of such Excess
Liquidation Proceeds;

                  (iv) to reimburse the Master Servicer or any Servicer for
advances of funds (other than Monthly Advances) made with respect to the
Mortgage Loans, and the right to reimbursement pursuant to this subclause being
limited to amounts received on the related Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of the payments for which such
advances were made;

                  (v) to reimburse the Master Servicer or any Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Monthly Advance or advance has not
been reimbursed pursuant to clauses (i) and (iv);

                  (vi) to pay the Master Servicer as set forth in Section 3.14;

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<PAGE>

                  (vii) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 3.03 and
7.04(c) and (d);

                  (viii) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
related Servicer;

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

                  (x) to reimburse the Trustee, the Securities Administrator or
the Custodian for expenses, costs and liabilities incurred by or reimbursable to
it pursuant to this Agreement;

                  (xi) to remove amounts deposited in error; and

                  (xii) to clear and terminate the Distribution Account pursuant
to Section 10.01.

         (b) The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(iv) or with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 4.02(b).

         (c) On each Distribution Date, the Trustee shall distribute the
Available Funds to the extent on deposit in the Distribution Account for each
Loan Group to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the Securities
Administrator in accordance with Section 6.01.

                                       62
<PAGE>

                                   ARTICLE V
                                  Certificates

         Section 5.01 CERTIFICATES.

         (a) The Depository, the Depositor and the Trustee have entered into a
Depository Agreement dated as of the Closing Date (the "Depository Agreement").
Except for the Residual Certificates, the Private Certificates and the
Individual Certificates and as provided in Subsection 5.01(b), the Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Trustee except to a successor to the Depository; (ii)
ownership and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iii) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (iv) the Trustee shall deal with the
Depository as representative of such Certificate Owners of the respective Class
of Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants.

         The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Depositor will take such action as may
be reasonably required to cause the Depository to accept such Class or Classes
for trading if it may legally be so traded.

         All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.

         (b) If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of any instructions
required under this section and may conclusively rely on, and shall be protected
in relying on, such instructions.

                                       63

<PAGE>

         In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing such Certificate Owner's Fractional
Undivided Interest in the related Class of Certificates. In order to make such
request, such Certificate Owner shall, subject to the rules and procedures of
the Depository, provide the Depository or the related Depository Participant
with directions for the Trustee to exchange or cause the exchange of the
Certificate Owner's interest in such Class of Certificates for an equivalent
Fractional Undivided Interest in fully registered definitive form. Upon receipt
by the Trustee of instructions from the Depository directing the Trustee to
effect such exchange (such instructions to contain information regarding the
Class of Certificates and the Current Principal Amount being exchanged, the
Depository Participant account to be debited with the decrease, the registered
holder of and delivery instructions for the definitive Certificate, and any
other information reasonably required by the Trustee), (i) the Trustee shall
instruct the Depository to reduce the related Depository Participant's account
by the aggregate Current Principal Amount of the definitive Certificate, (ii)
the Trustee shall execute, authenticate and deliver, in accordance with the
registration and delivery instructions provided by the Depository, a definitive
Certificate evidencing such Certificate Owner's Fractional Undivided Interest in
such Class of Certificates and (iii) the Trustee shall execute and authenticate
a new Book-Entry Certificate reflecting the reduction in the Current Principal
Amount of such Class of Certificates by the amount of the definitive
Certificates.

         (c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC I and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(i) and (y) the Class R-I Certificates, which is hereby
designated as the single "residual interest" in REMIC I.

         The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial balances and pass-through rates:

<TABLE>
<CAPTION>
  REMIC I Interest   Initial Balance         Pass-Through Rate           Related Group
-----------------------------------------------------------------------------------------------------
<S>                  <C>                                 <C>
         I-A         $       1,768.41               (1)                       Group I
         I-B         $      41,608.61               (2)                       Group I
        II-A         $         992.85               (1)                       Group II
        II-B         $      23,361.05               (3)                       Group II
        III-A        $         387.86               (1)                       Group III
        III-B        $       9,125.86               (4)                       Group III
         ZZZ         $ 740,877,889.43               (1)               Group I through Group III
      Class R-I      $          50.00              0.00%                         N/A
</TABLE>

         (1) The weighted average of the Net Rates of the Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.

         (2) The weighted average of the Net Rates of the Group I Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.

                                       64
<PAGE>

         (3) The weighted average of the Net Rates of the Group II Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.

         (4) The weighted average of the Net Rates of the Group III Mortgage
Loans, weighted on the basis of the respective Scheduled Principal Balance of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution Date.

         Distributions shall be deemed to be made from amounts received on the
Mortgage Loans to REMIC I Regular Interests, first, so as to keep the
Uncertificated Principal Balance of each REMIC I Regular Interest ending with
the designation "B" equal to 0.01% of the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group; second, to each REMIC I Regular
Interest ending with the designation "A," so that the Uncertificated Principal
Balance of each such REMIC I Regular Interest is equal to 0.01% of the excess of
(x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Loan Group over (y) the Current Principal Amount of the Senior
Certificates in the related Certificate Group (except that if any such excess is
a larger number than in the preceding distribution period, the least amount of
principal shall be distributed to such REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any remaining
principal to REMIC I Regular Interest ZZZ. Realized Losses on the Mortgage Loans
shall be applied after all distributions have been made on each Distribution
Date first, so as to keep the Uncertificated Principal Balance of each REMIC I
Regular Interest ending with the designation "B" equal to 0.01% of the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Loan Group;
second, to each REMIC I Regular Interest ending with the designation "A," so
that the Uncertificated Principal Balance of each such REMIC I Regular Interest
is equal to 0.01% of the excess of (x) the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificates in the related Certificate Group (except that
if any such excess is a larger number than in the preceding distribution period,
the least amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is maintained); and
third, any remaining Realized Losses on the Mortgage Loans shall be allocated to
REMIC I Regular Interest ZZZ.

                  (ii) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:

<TABLE>
<CAPTION>
                   DESIGNATION           INITIAL PRINCIPAL AMOUNT        PASS-THROUGH RATE
-----------------------------------------------------------------------------------------------------
<S>                   <C>              <C>                                     <C>
                      I-A-1              $  375,500,800.00                    (1)
                      I-A-2              $   22,901,200.00                    (1)
                     II-A-1              $  210,820,200.00                    (2)
                     II-A-2              $   12,861,800.00                    (2)
                      III-A              $   87,380,000.00                    (3)
                       R-I               $           50.00                    (4)
                      R-II               $           50.00                    (4)
                       B-1               $   12,225,000.00                    (5)
                       B-2               $    7,410,000.00                    (5)
                       B-3               $    4,446,000.00                    (5)
                       B-4               $    3,334,000.00                    (5)
                       B-5               $    2,223,000.00                    (5)
                       B-6               $    1,853,084.07                    (5)
</TABLE>

                                       65
<PAGE>

         (1) The Class I-A-1 Certificates and Class I-A-2 Certificates will each
bear interest at a variable Pass-Through Rate equal to the weighted average of
the Net Rates of the Group I Mortgage Loans, weighted on the basis of the
respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date;
provided that, for federal income tax purposes the Class I-A-1 Certificates and
Class I-A-2 Certificates will each bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the Pass-Through Rate on REMIC I
Regular Interest I-B, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first Interest
Accrual Period is 4.743% per annum.

         (2) The Class II-A-1 Certificates and Class II-A-2 Certificates will
each bear interest at a variable Pass-Through Rate equal to the weighted average
of the Net Rates of the Group II Mortgage Loans, weighted on the basis of the
respective Scheduled Principal Balances of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date;
provided that, for federal income tax purposes the Class II-A-1 Certificates and
Class II-A-2 Certificates will each bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the Pass-Through Rate on REMIC I
Regular Interest II-B, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interest immediately preceding the related
Distribution Date. The Pass-Through Rate with respect to the first Interest
Accrual Period is 5.206% per annum.

         (3) The Class III-A Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Rates of the Group
III Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class III-A Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC I Regular Interest III-B, weighted on the basis of
the Uncertificated Principal Balance of such REMIC I Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is 5.519% per annum.

         (4) The Class R-I Certificates and Class R-II Certificates are not
entitled to distributions of interest.

         (5) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class
B-6 Certificates will each bear interest at a variable Pass-Through Rate equal
to the weighted average of the Net Rates of the Mortgage Loans in each Loan
Group, weighted in proportion to the results of subtracting from the aggregate
principal balance of the Mortgage Loans of each Loan Group, the Current
Principal Amount of the related Class or Classes of Senior Certificates;
provided that for federal income tax purposes such Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass-Through Rates on REMIC I Regular Interests I-A, II-A and
III-A, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest immediately preceding the related Distribution
Date, provided that for purposes of such weighted average, the Pass-Through Rate
of each such REMIC I Regular Interest shall be subject to a cap and a floor
equal to the Pass-Through Rate of the REMIC I Regular Interest from the related
Loan Group ending with the designation "B". The Pass-Through Rate with respect
to the first Interest Accrual Period is 4.985%.

         (d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date in the Trust Fund has been
designated as the "latest possible maturity date" for the REMIC I Regular
Interests and the Certificates.

                                       66
<PAGE>

         (e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated, on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount of such Class applicable to
such Distribution Date.

         (f) The Certificates shall be substantially in the forms set forth in
Exhibits A-1, A-2 and A-3. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Depositor. Pending
the preparation of definitive Certificates of any Class, the Trustee may sign
and countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.

         (g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee

                                       67
<PAGE>

shall execute and countersign Physical Certificates all in an aggregate
principal amount that shall equal the Current Principal Amount of such Class on
the Closing Date. The Private Certificates shall be issued in certificated
fully-registered form in minimum dollar denominations of $25,000 and integral
multiples of $1.00 in excess thereof, except that one Private Certificate of
each Class may be issued in a different amount so that the sum of the
denominations of all outstanding Private Certificates of such Class shall equal
the Current Principal Amount of such Class on the Closing Date. The Residual
Certificates shall each be issued in certificated fully-registered form, each,
in the denomination of $50. Each Class of Global Certificates, if any, shall be
issued in fully registered form in minimum dollar denominations of $50,000 and
integral multiples of $1.00 in excess thereof, except that one Certificate of
each Class may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Current Principal Amount of such Class on the Closing Date. On the Closing Date,
the Trustee shall execute and countersign (i) in the case of each Class of
Offered Certificates, the Certificate in the entire Current Principal Amount of
the respective Class and (ii) in the case of each Class of Private Certificates,
Individual Certificates all in an aggregate principal amount that shall equal
the Current Principal Amount of each such respective Class on the Closing Date.
The Certificates referred to in clause (i) and if at any time there are to be
Global Certificates, the Global Certificates shall be delivered by the Depositor
to the Depository or pursuant to the Depository's instructions, shall be
delivered by the Depositor on behalf of the Depository to and deposited with the
DTC Custodian. The Trustee shall sign the Certificates by facsimile or manual
signature and countersign them by manual signature on behalf of the Trustee by
one or more authorized signatories, each of whom shall be Responsible Officers
of the Trustee or its agent. A Certificate bearing the manual and facsimile
signatures of individuals who were the authorized signatories of the Trustee or
its agent at the time of issuance shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.

         (h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates issued on the Closing Date shall be dated the Closing Date. All
Certificates issued thereafter shall be dated the date of their
countersignature.

         (i) The Closing Date is hereby designated as the "startup" day of each
REMIC within the meaning of Section 860G(a)(9) of the Code.

         (j) For federal income tax purposes, each REMIC shall have a tax year
that is a calendar year and shall report income on an accrual basis.

         (k) The Trustee on behalf of the Trust shall cause each REMIC to timely
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.

         (l) The following legend shall be placed on the Residual Certificates,
whether upon original issuance or upon issuance of any other Certificate of any
such Class in exchange therefor or upon transfer thereof:

                  THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
         BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
         ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
         INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED
         TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO
         THE DEPOSITOR, TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR
         AND ON WHICH THEY MAY RELY

                                       68
<PAGE>

         THAT IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF CERTIFICATES
         ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT
         PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL
         NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE
         DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
         TRUSTEE.

The following legend shall be placed upon the Private Certificates, whether upon
original issuance or upon issuance of any other Certificate of any such Class in
exchange therefor or upon transfer thereof:

         THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR
UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.

         Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.

         (a) The Trustee shall maintain at its Corporate Trust Office a
Certificate Register in which, subject 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.

         (b) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.

         (c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such

                                       69
<PAGE>

a Certificate only as provided herein. In addition to the provisions of
Subsection 5.02(h), the following restrictions shall apply with respect to the
transfer and registration of transfer of an Individual Certificate to a
transferee that takes delivery in the form of an Individual Certificate:

                  (i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who has
provided the Trustee with a Rule 144A Certificate or comparable evidence as to
its QIB status.

                  (ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing that the
Certificate is being transferred to an Institutional Accredited Investor; and
(y) prior to the transfer the transferee furnishes to the Trustee an Investment
Letter (and the Trustee shall be fully protected in so doing), provided that, if
based upon an Opinion of Counsel addressed to the Trustee to the effect that the
delivery of (x) and (y) above are not sufficient to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and other
applicable laws, the Trustee shall as a condition of the registration of any
such transfer require the transferor to furnish such other certifications, legal
opinions or other information prior to registering the transfer of an Individual
Certificate as shall be set forth in such Opinion of Counsel.

         (d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:

                  (i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor, such
transferee shall be required to take delivery in the form of an Individual
Certificate or Certificates and the Trustee shall register such transfer only
upon compliance with the provisions of Subsection 5.02(c)(ii).

                  (ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in the form
of an Individual Certificate or Certificates of such Class, except as set forth
in clause (i) above, the Trustee shall register such transfer only upon
compliance with the provisions of Subsection 5.02(c)(i).

                  (iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee shall
register such transfer if the transferee has provided the Trustee with a Rule
144A Certificate or comparable evidence as to its QIB status.

                  (iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial interest in the Global Certificate
of a Class to a transferee that takes delivery in the form of a beneficial
interest in the Global Certificate of such Class; provided that each such
transferee shall be deemed to have made such representations and warranties
contained in the Rule 144A Certificate as are sufficient to establish that it is
a QIB.

                                       70
<PAGE>

         (e) Subject to Subsection 5.02(h), an exchange of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:

                  (i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such beneficial interest for an Individual
Certificate or Certificates of such Class.

                  (ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or Certificates for a beneficial interest
in the Global Certificate of such Class if such holder furnishes to the Trustee
a Rule 144A Certificate or comparable evidence as to its QIB status.

                  (iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of Individual
Certificates of such Class in different authorized denominations without any
certification.

         (f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.

                  (ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual Certificate of
such Class as provided herein, the Trustee shall (or shall request the
Depository to) endorse on the schedule affixed to such Global Certificate (or on
a continuation of such schedule affixed to such Global Certificate and made a
part thereof) or otherwise make in its books and records an appropriate notation
evidencing the date of such exchange or transfer and a decrease in the
certificate balance of such Global Certificate equal to the certificate balance
of such Individual Certificate issued in exchange therefor or upon transfer
thereof.

         (g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.

                                       71
<PAGE>

         (h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(g) above or any
integral multiple of $1.00 in excess thereof) by surrendering such Certificate
at the Corporate Trust Office, or at the office of any transfer agent, together
with an executed instrument of assignment and transfer satisfactory in form and
substance to the Trustee in the case of transfer and a written request for
exchange in the case of exchange. The holder of a beneficial interest in a
Global Certificate may, subject to the rules and procedures of the Depository,
cause the Depository (or its nominee) to notify the Trustee in writing of a
request for transfer or exchange of such beneficial interest for an Individual
Certificate or Certificates. Following a proper request for transfer or
exchange, the Trustee shall, within five Business Days of such request made at
the Corporate Trust Office, sign, countersign and deliver at the Corporate Trust
Office, to the transferee (in the case of transfer) or holder (in the case of
exchange) or send by first class mail at the risk of the transferee (in the case
of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by the
registered holder in person, or by a duly authorized attorney-in-fact.

         (i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at the Corporate Trust Office; provided, however, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the
Depositor as indicated to the Trustee in writing. Whenever any Certificates are
so surrendered for exchange, the Trustee shall sign and countersign and the
Trustee shall deliver the Certificates which the Certificateholder making the
exchange is entitled to receive.

         (j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.

         (k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.

         (l) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.

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         Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         (a) If (i) 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 (ii) there is delivered to the Trustee such
security or indemnity as it may require to save it harmless, and (iii) the
Trustee has not received notice that such Certificate has been acquired by a
third Person, the Trustee shall sign, countersign and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Fractional Undivided Interest but in each case
bearing a different number. The mutilated, destroyed, lost or stolen Certificate
shall thereupon be canceled of record by the Trustee and shall be of no further
effect and evidence no rights.

         (b) Upon 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) connected therewith.
Any duplicate 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.

         Section 5.04 PERSONS DEEMED OWNERS.

         Prior to due presentation of a Certificate for registration of
transfer, the Depositor, the Trustee and any agent of the Depositor or 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 pursuant to
Section 6.01 and for all other purposes whatsoever. Neither the Depositor, the
Trustee nor any agent of the Depositor or the Trustee shall be affected by
notice to the contrary. No Certificate shall be deemed duly presented for a
transfer effective on any Record Date unless the Certificate to be transferred
is presented no later than the close of business on the third Business Day
preceding such Record Date.

         Section 5.05 TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES.

         (a) Residual Certificates, or interests therein, may not be transferred
without the prior express written consent of the Tax Matters Person and the
Depositor. As a prerequisite to such consent, the proposed transferee must
provide the Tax Matters Person, the Depositor and the Trustee with an affidavit
that the proposed transferee is a Permitted Transferee (and an affidavit that it
is a U.S. Person) as provided in Subsection 5.05(b).

         (b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Depositor an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made

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in the affidavit issued pursuant to the preceding sentence is not true.
Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Depositor shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Depositor, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Depositor to ensure that
the Residual Certificates are not transferred to any Person who is not a
Permitted Transferee and that any transfer of such Residual Certificates will
not cause the imposition of a tax upon the Trust or cause any REMIC to fail to
qualify as a REMIC.

         (c) The Residual Certificates (including a beneficial interest therein)
may not be purchased by or transferred to any person who is not a United States
Person.

         (d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Securities Administrator to act as
its agent with respect to all matters concerning the tax obligations of the
Trust.

         Section 5.06 RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES.

         (a) No offer, sale, transfer or other disposition (including pledge) of
any Certificate shall be made by any Holder thereof unless registered under the
Securities Act, or an exemption from the registration requirements of the
Securities Act and any applicable state securities or "Blue Sky" laws is
available and the prospective transferee (other than the Depositor) of such
Certificate signs and delivers to the Trustee an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F-l hereto, or a Rule 144A Certificate, if the transferee is a QIB, in
the form set forth as Exhibit F-2 hereto. Notwithstanding the provisions of the
immediately preceding sentence, no restrictions shall apply with respect to the
transfer or registration of transfer of a beneficial interest in any Certificate
that is a Global Certificate of a Class to a transferee that takes delivery in
the form of a beneficial interest in the Global Certificate of such Class
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate as are
sufficient to

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establish that it is a QIB. In the case of a proposed transfer of any
Certificate to a transferee other than a QIB, the Trustee may require an Opinion
of Counsel addressed to the Trustee that such transaction is exempt from the
registration requirements of the Securities Act. The cost of such opinion shall
not be an expense of the Trustee or the Trust Fund.

         (b) The Private Certificates shall each bear a Securities Legend.

         Section 5.07 ERISA RESTRICTIONS.

         (a) Subject to the provisions of subsection (b), no Residual
Certificates or Private Certificates may be acquired directly or indirectly by,
or on behalf of, an employee benefit plan or other retirement arrangement which
is subject to Title I of ERISA or Section 4975 of the Code, unless the proposed
transferee provides either (i) the Trustee, with an Opinion of Counsel addressed
to the Depositor, the Trustee, the Master Servicer and the Securities
Administrator (upon which they may rely) which is satisfactory to the Trustee,
which opinion will not be at the expense of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator, that the purchase of such
Certificates by or on behalf of such Plan is permissible under applicable law,
will not constitute or result in a nonexempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Depositor, the Master
Servicer, the Securities Administrator or the Trustee to any obligation in
addition to those undertaken in the Agreement or (ii) in the case of the Class
B-4, Class B-5 and Class B-6 Certificates, a representation or certification to
the Trustee (upon which the Trustee is authorized to rely) to the effect that
the proposed transfer and holding of such a Certificate and the servicing,
management and operation of the Trust: (I) will not result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code which is not
covered under an individual or class prohibited transaction exemption including
but not limited to Department of Labor Prohibited Transaction Exemption ("PTE")
84-14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Depositor, the Securities Administrator, the Master Servicer or the
Trustee to any obligation in addition to those undertaken in the Agreement.

         (b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, either: (i) it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of ERISA or Section
4975 of the Code, or (ii) the transfer and holding of an interest in such
Certificate to that Person and the subsequent servicing, management and
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption, including, but not limited to, PTE 84-14, PTE 91-38, PTE
90-1, PTE 95-60 or PTE 96-23 and (II) will not subject the Depositor, the
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.

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<PAGE>

         (c) Each beneficial owner of a Class B-1, Class B-2 or Class B-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with "Plan Assets", (ii) it has
acquired and is holding such certificate in reliance on Prohibited Transaction
Exemption 90-30, as amended from time to time (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P or Moody's Investors
Service, Inc., and the certificate is so rated or (iii) (1) it is an insurance
company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is
defined in Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the
conditions in Sections I and III of PTCE 95-60 have been satisfied.

         (d) Neither the Trustee, the Master Servicer nor the Securities
Administrator will be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Global Certificates. Any
attempted or purported transfer of any Certificate in violation of the
provisions of Subsections (a) or (b) above shall be void ab initio and such
Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation of
such provisions, shall indemnify and hold harmless the Trustee, the Securities
Administrator and the Master Servicer from and against any and all liabilities,
claims, costs or expenses incurred by the Trustee, the Securities Administrator
or the Master Servicer as a result of such attempted or purported transfer. The
Trustee shall have no liability for transfer of any such Global Certificates in
or through book-entry facilities of any Depository or between or among
Depository Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.

         Section 5.08  RULE 144A INFORMATION.

         For so long as any Certificates are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) of the Securities Act, (1) the
Depositor will provide or cause to be provided to any holder of such
Certificates and any prospective purchaser thereof designated by such a holder,
upon the request of such holder or prospective purchaser, the information
required to be provided to such holder or prospective purchaser by Rule
144A(d)(4) under the Securities Act; and (2) the Depositor shall update such
information from time to time in order to prevent such information from becoming
false and misleading and will take such other actions as are necessary to ensure
that the safe harbor exemption from the registration requirements of the
Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A.

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                                   ARTICLE VI
                         Payments to Certificateholders

         Section 6.01  DISTRIBUTIONS ON THE CERTIFICATES.

         (a) Interest and principal (as applicable) on the Certificates will be
distributed monthly on each Distribution Date, commencing in August 2004, in an
amount equal to the Available Funds on deposit in the Distribution Account for
such Distribution Date. In addition, on the Distribution Date occurring in
August 2004, the Class R-I Deposit will be distributed to the Holder of the
Class R-I Certificate and the Class R-II Deposit will be distributed to the
Holder of the Class R-II Certificate. On each Distribution Date, the Available
Funds on deposit in the Distribution Account shall be distributed as follows:

                  (i) on each Distribution Date, the Group I Available Funds
will be distributed to the Group I Senior Certificates as follows:

                  FIRST, to the Class I-A-1 Certificates and Class I-A-2
                  Certificates, on a pro rata basis, the Accrued Certificate
                  Interest on such Classes for such Distribution Date. As
                  described below, Accrued Certificate Interest on the Class
                  I-A-1 Certificates and Class I-A-2 Certificates is subject to
                  reduction in the event of certain Net Interest Shortfalls
                  allocable thereto;

                  SECOND, to the Class I-A-1 Certificates and Class I-A-2
                  Certificates, on a pro rata basis, any Accrued Certificate
                  Interest thereon remaining undistributed from previous
                  Distribution Dates, to the extent of remaining Group I
                  Available Funds; and

                  THIRD, to the Class I-A-1 Certificates and Class I-A-2
                  Certificates, on a pro rata basis, in reduction of the Current
                  Principal Amounts thereof, the remaining Group I Senior
                  Optimal Principal Amount for such Distribution Date to the
                  extent of remaining Group I Available Funds, until the Current
                  Principal Amounts of such Classes have been reduced to zero.

                  (ii) on each Distribution Date, the Group II Available Funds
will be distributed to the Group II Senior Certificates as follows:

                  FIRST, to the Class II-A-1 Certificates and Class II-A-2
                  Certificates, on a pro rata basis, the Accrued Certificate
                  Interest on such Class for such Distribution Date. As
                  described below, Accrued Certificate Interest on the Class
                  II-A-1 Certificates and Class II-A-2 Certificates is subject
                  to reduction in the event of certain Net Interest Shortfalls
                  allocable thereto;

                  SECOND, to the Class II-A-1 Certificates and Class II-A-2
                  Certificates, on a pro rata basis, any Accrued Certificate
                  Interest thereon remaining undistributed from previous
                  Distribution Dates, to the extent of remaining Group II
                  Available Funds; and

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                  THIRD, to the Class II-A-1 Certificates and Class II-A-2
                  Certificates, on a pro rata basis, in reduction of the Current
                  Principal Amount thereof, the Group II Senior Optimal
                  Principal Amount for such Distribution Date to the extent of
                  remaining Group II Available Funds, until the Current
                  Principal Amounts of such Classes have been reduced to zero.

                  (iii) on each Distribution Date, the Group III Available Funds
will be distributed to the Group III Senior Certificates as follows:

                  FIRST, to the Class III-A Certificates, the Accrued
                  Certificate Interest on such Class for such Distribution Date.
                  As described below, Accrued Certificate Interest on the Class
                  III-A Certificates is subject to reduction in the event of
                  certain Net Interest Shortfalls allocable thereto;

                  SECOND, to the Class III-A Certificates, any Accrued
                  Certificate Interest thereon remaining undistributed from
                  previous Distribution Dates, to the extent of remaining Group
                  III Available Funds; and

                  THIRD, to the Class III-A Certificates, in reduction of the
                  Current Principal Amount thereof, the Group III Senior Optimal
                  Principal Amount for such Distribution Date to the extent of
                  remaining Group III Available Funds, until the Current
                  Principal Amount of such Class has been reduced to zero.

                  (iv) Except as provided in clauses (v) and (vi) below, on each
Distribution Date on or prior to the Cross-Over Date, an amount equal to the sum
of any remaining Group I, Group II and Group III Available Funds after the
distributions in clauses (i), (ii) and (iii) above will be distributed
sequentially, in the following order, to the Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 Certificates, in each case up to an amount
equal to and in the following order: (A) the Accrued Certificate Interest
thereon for such Distribution Date, (B) any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates and (C) such Class's
Allocable Share for such Distribution Date, in each case, to the extent of
remaining Group I, Group II and Group III Available Funds.

                  (v) On each Distribution Date prior to the Cross-Over Date but
after the reduction of the Current Principal Amount of all of the Senior
Certificates of a Certificate Group to zero, the remaining Class or Classes of
Senior Certificates in the remaining Certificate Groups will be entitled to
receive in reduction of their Current Principal Amounts, pro rata based upon
their Current Principal Amounts immediately prior to such Distribution Date, in
addition to any Principal Prepayments related to such remaining Senior
Certificates' respective Loan Group allocated to such Senior Certificates, 100%
of the Principal Prepayments on any Mortgage Loan in the Loan Group relating to
the Class or Classes of Senior Certificates of the fully repaid Certificate
Group; provided, however, that if (A) the weighted average of the Subordinate
Percentages on such Distribution Date equals or exceeds two times the initial
weighted average of the Subordinate Percentages and (B) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and bankruptcy and
Mortgage Loans with respect to which the related

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Mortgaged Property has been acquired by the Trust), averaged over the last six
months, as a percentage of the aggregate Current Principal Amount of the
Subordinate Certificates does not exceed 100%, then the additional allocation of
Principal Prepayments to the Senior Certificates in accordance with this clause
(vi) will not be made and 100% of the Principal Prepayments on any Mortgage Loan
in the Loan Group relating to the fully repaid Class or Classes of Senior
Certificates will be allocated to the Subordinate Certificates.

                  (vi) If on any Distribution Date on which the aggregate
Current Principal Amount of any Class or Classes of Senior Certificates would be
greater than the aggregate Scheduled Principal Balance of the Mortgage Loans in
the related Loan Group and any Subordinate Certificates are still outstanding,
in each case after giving effect to distributions to be made on such
Distribution Date, (A) 100% of amounts otherwise allocable to the Subordinate
Certificates in respect of principal will be distributed to such Class or
Classes of Senior Certificates in reduction of the Current Principal Amounts
thereof, until the aggregate Current Principal Amount of such Class or Classes
of Senior Certificates is an amount equal to the aggregate Scheduled Principal
Balance of the Mortgage Loans in the related Loan Group, and (B) the Accrued
Certificate Interest otherwise allocable to the Subordinate Certificates on such
Distribution Date will be reduced, if necessary, and distributed to such Class
or Classes of Senior Certificates in an amount equal to the Accrued Certificate
Interest for such Distribution Date on the excess of (x) the aggregate Current
Principal Amount of such Class or Classes of Senior Certificates over (y) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group. Any such reduction in the Accrued Certificate Interest on the Subordinate
Certificates will be allocated in reverse order of the Subordinate Certificates
numerical designations, commencing with the Class B-6 Certificates.

         (b) If, after distributions have been made pursuant to priorities FIRST
and SECOND of clauses (a)(i), (ii) and (iii) above on any Distribution Date, the
remaining Group I, Group II or Group III Available Funds are less than the Group
I, Group II and Group III Senior Optimal Principal Amounts, respectively, the
Senior Optimal Principal Amount for such Loan Group shall be reduced, and such
remaining Available Funds will be distributed on the related Senior
Certificates, on a pro rata basis, on the basis of such reduced amount.

         (c) On each Distribution Date, any Available Funds remaining after
payment of interest and principal to the Classes of Certificates entitled
thereto, as described above, will be distributed to the Class R-II Certificates;
provided that if on any Distribution Date there are any Group I, Group II or
Group III Available Funds remaining after payment of interest and principal to a
Class or Classes of Certificates entitled thereto, such amounts will be
distributed to the other Classes of Senior Certificates, pro rata, based upon
their Current Principal Amounts, until all amounts due to all Classes of Senior
Certificates have been paid in full, before any amounts are distributed to the
Class R-II Certificates.

         (d) For any Distribution Date, "pro rata" distributions among Classes
of Certificates in respect of Accrued Certificate Interest or unpaid Accrued
Certificate Interest will be made in proportion to the amount of Accrued
Certificate Interest or unpaid Accrued Certificate Interest, respectively, due
on such Classes for such Distribution Date. For any Distribution Date, "pro
rata" distributions among Classes of Certificates in respect of principal will
be made in

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proportion to the Current Principal Amount of such Classes immediately prior to
such Distribution Date.

         (e) No Accrued Certificate Interest will be payable with respect to any
Class of Certificates after the Distribution Date on which the Current Principal
Amount of such Certificate has been reduced to zero.

         (f) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfalls and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfalls and/or Realized Losses for such
Distribution Date. In addition, the amount of any interest shortfalls will
constitute unpaid Accrued Certificate Interest and will be distributable to
holders of the Certificates of the related Classes entitled to such amounts on
subsequent Distribution Dates, to the extent of the applicable Available Funds
after current interest distributions as required herein. Any such amounts so
carried forward will not bear interest. Shortfalls in interest payments will not
be offset by a reduction in the servicing compensation of the Master Servicer or
otherwise, except to the extent of applicable Compensating Interest Payments.

         (g) The expenses and fees of the Trust shall be paid by each of the
REMICs, to the extent that such expenses relate to the assets of each of such
respective REMICs, and all other expenses and fees of the Trust shall be paid
pro rata by each of the REMICs.

         Section 6.02  ALLOCATION OF LOSSES.

         (a) On or prior to each Determination Date, the Master Servicer shall
determine the amount of any Realized Loss in respect of each Mortgage Loan that
occurred during the immediately preceding calendar month, based on information
provided by the related Servicer.

         (b) With respect to any Certificates on any Distribution Date, the
principal portion of each Realized Loss on a Mortgage Loan shall be allocated as
follows:

                  FIRST, to the Class B-6 Certificates until the Current
         Principal Amount thereof has been reduced to zero;

                  SECOND, to the Class B-5 Certificates until the Current
         Principal Amount thereof has been reduced to zero;

                  THIRD, to the Class B-4 Certificates until the Current
         Principal Amount thereof has been reduced to zero;

                  FOURTH, to the Class B-3 Certificates until the Current
         Principal Amount thereof has been reduced to zero;

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<PAGE>

                  FIFTH, to the Class B-2 Certificates until the Current
         Principal Amount thereof has been reduced to zero;

                  SIXTH, to the Class B-1 Certificates until the Current
         Principal Amount thereof has been reduced to zero;

                  SEVENTH, if such loss is on (x) a Group I Mortgage Loan, to
         the Class I-A-2 Certificates until the Current Principal Amount thereof
         has been reduced to zero and then to the Class I-A-1 Certificates until
         the Current Principal Amount thereof has been reduced to zero; (y) a
         Group II Mortgage Loan, to the Class II-A-2 Certificates until the
         Current Principal Amount thereof has been reduced to zero and then to
         the Class II-A-1 Certificates until the Current Principal Amount
         thereof has been reduced to zero; or (z) a Group III Mortgage Loan, to
         the Class III-A Certificates until the Current Principal Amount of the
         Class III-A Certificates has been reduced to zero; and

                  EIGHTH, to the Senior Certificates (other than the Class R
         Certificates), on a pro rata basis.

         (c) Notwithstanding the foregoing clause (b), no such allocation of any
Realized Loss shall be made on a Distribution Date to any Class of Certificates
to the extent that such allocation would result in the reduction of the
aggregate Current Principal Amounts of all the Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans on such date, to an amount
less than the aggregate Scheduled Principal Balance of all of the Mortgage Loans
as of the first day of the month of such Distribution Date (such limitation, the
"Loss Allocation Limitation").

         (d) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class in proportion to their respective
Current Principal Amounts. Any allocation of Realized Losses shall be
accomplished by reducing the Current Principal Amount of the related
Certificates on the related Distribution Date.

         (e) Realized Losses shall be allocated on the Distribution Date in the
month following the month in which such loss was incurred and, in the case of
the principal portion thereof, after giving effect to distributions made on such
Distribution Date.

         (f) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee of the Subordinate Certificate Writedown
Amount. Any Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) if prior to the
Cross-Over Date, the Current Principal Amounts of the Subordinate Certificates,
in the reverse order of their numerical Class designations and (ii) from and
after the Cross-Over Date, the Senior Certificates, in accordance with
priorities set forth in clause (b) above, which reduction shall occur on such
Distribution Date after giving effect to distributions made on such Distribution
Date.

         (g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been

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allocated thereto in the absence of such Net Interest Shortfall for such
Distribution Date. The interest portion of any Realized Losses with respect to
the Mortgage Loans occurring on or prior to the Cross-Over Date will not be
allocated among any Certificates, but will reduce the amount of Available Funds
on the related Distribution Date. As a result of the subordination of the
Subordinate Certificates in right of distribution, such Realized Losses on the
Mortgage Loans will be borne by the Subordinate Certificates, in inverse order
of their numerical Class designations. Following the Cross- Over Date, the
interest portion of Realized Losses on the Mortgage Loans will be allocated to
the Senior Certificates in the manner described in the first sentence of this
clause (g).

         (h) In addition, in the event that the Master Servicer receives any
Subsequent Recoveries from a Servicer, the Master Servicer shall deposit such
funds into the Master Servicer Collection Account pursuant to Section 4.02. If,
after taking into account such Subsequent Recoveries, the amount of a Realized
Loss is reduced, the amount of such Subsequent Recoveries will be applied to
increase the Current Principal Amount of the Class of Subordinate Certificates
with the highest payment priority to which Realized Losses have been allocated,
but not by more than the amount of Realized Losses previously allocated to that
Class of Subordinate Certificates pursuant to this Section 6.02. The amount of
any remaining Subsequent Recoveries will be applied to sequentially increase the
Current Principal Amount of the Subordinate Certificates, beginning with the
Class of Subordinate Certificates with the next highest payment priority, up to
the amount of such Realized Losses previously allocated to such Class of
Certificates pursuant to this Section 6.02. Holders of such Certificates will
not be entitled to any payment in respect of current interest on the amount of
such increases for any Interest Accrual Period preceding the Distribution Date
on which such increase occurs. Any such increases shall be applied to the
Current Principal Amount of each Subordinate Certificate of such Class in
accordance with its respective Fractional Undivided Interest.

         Section 6.03  PAYMENTS.

         (a) On each Distribution Date, other than the final Distribution Date,
the Trustee shall distribute to each Certificateholder of record as of the
immediately preceding Record Date the Certificateholder's pro rata share of its
Class (based on the aggregate Fractional Undivided Interest represented by such
Holder's Certificates) of all amounts required to be distributed on such
Distribution Date to such Class, based on information provided to the Trustee by
the Securities Administrator. The Securities Administrator shall calculate the
amount to be distributed to each Class and, based on such amounts, the
Securities Administrator shall determine the amount to be distributed to each
Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer. Neither the Securities Administrator nor
the Trustee shall be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.

         (b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder by wire transfer to a United States

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dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Trustee specified in the
notice to Certificateholders of such final payment.

         Section 6.04  STATEMENTS TO CERTIFICATEHOLDERS.

         (a) Concurrently with each distribution to Certificateholders, the
Securities Administrator shall make available to the parties hereto and each
Certificateholder via the Securities Administrator's internet website as set
forth below, the following information, expressed with respect to clauses (i)
through (vii) in the aggregate and as a Fractional Undivided Interest
representing an initial Current Principal Amount of $1,000, or in the case of
the Residual Certificates, an initial Current Principal Amount of $50:

                  (i) the Current Principal Amount of each Class of Certificates
immediately prior to such Distribution Date;

                  (ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;

                  (iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest Accrual
Period;

                  (iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed with
respect to each Class of Certificates;

                  (v) the amount of the distribution allocable to interest on
each Class of Certificates;

                  (vi) the Pass-Through Rates for each Class of Certificates
with respect to such Distribution Date;

                  (vii) the Current Principal Amount of each Class of
Certificates after such Distribution Date;

                  (viii) the amount of any Monthly Advances, Compensating
Interest Payments and outstanding unreimbursed advances by the Master Servicer
or the Servicer included in such distribution separately stated for each Loan
Group;

                  (ix) the aggregate amount of any Realized Losses (listed
separately for each category of Realized Loss and for each Loan Group) during
the related Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in respect thereof
included in such distribution;

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                  (x) with respect to each Mortgage Loan which incurred a
Realized Loss during the related Prepayment Period, (i) the loan number, (ii)
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
(ii) the Scheduled Principal Balance of such Mortgage Loan as of the beginning
of the related Due Period, (iii) the Net Liquidation Proceeds with respect to
such Mortgage Loan and (iv) the amount of the Realized Loss with respect to such
Mortgage Loan;

                  (xi) with respect to each Loan Group, the amount of Scheduled
Principal and Principal Prepayments, (including but separately identifying the
principal amount of Principal Prepayments, Insurance Proceeds, the purchase
price in connection with the purchase of Mortgage Loans, cash deposits in
connection with substitutions of Mortgage Loans and Net Liquidation Proceeds)
and the number and principal balance of Mortgage Loans purchased or substituted
for during the relevant period and cumulatively since the Cut-off Date;

                  (xii) the number of Mortgage Loans (excluding REO Property) in
each Loan Group remaining in the Trust Fund as of the end of the related
Prepayment Period;

                  (xiii) information for each Loan Group and in the aggregate
regarding any Mortgage Loan delinquencies as of the end of the related
Prepayment Period, including the aggregate number and aggregate Outstanding
Principal Balance of Mortgage Loans (a) delinquent 30 to 59 days on a
contractual basis, (b) delinquent 60 to 89 days on a contractual basis, and (c)
delinquent 90 or more days on a contractual basis, in each case as of the close
of business on the last Business Day of the immediately preceding month;

                  (xiv) for each Loan Group, the number of Mortgage Loans in the
foreclosure process as of the end of the related Due Period and the aggregate
Outstanding Principal Balance of such Mortgage Loans;

                  (xv) for each Loan Group, the number and aggregate Outstanding
Principal Balance of all Mortgage Loans as to which the Mortgaged Property was
REO Property as of the end of the related Due Period;

                  (xvi) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property in each Loan
Group; provided that, in the event that such information is not available to the
Securities Administrator on the Distribution Date, such information shall be
furnished promptly after it becomes available;

                  (xvii) the amount of Realized Losses allocated to each Class
of Certificates since the prior Distribution Date and in the aggregate for all
prior Distribution Dates; and

                  (xviii) the Average Loss Severity Percentage for each Loan
Group; and

                  (xix) the then applicable Group I, Group II and Group III
Senior Percentage, Group I, Group II and Group III Senior Prepayment Percentage,
Group I, Group II and Group III

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Subordinate Percentage and Group I, Group II and Group III Subordinate
Prepayment Percentage.

         The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.

         The Securities Administrator may make available each month, to any
interested party, the monthly statement to Certificateholders via the Securities
Administrator's website initially located at "www.ctslink.com." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (301) 815-6600. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the Securities Administrator's customer service desk
and indicating such. The Securities Administrator shall have the right to change
the way such reports are distributed in order to make such distribution more
convenient and/or more accessible to the parties, and the Securities
Administrator shall provide timely and adequate notification to all parties
regarding any such change.

         To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at
"https://trustinvestorreporting.usbank.com". Assistance in using the Trustee's
website service can be obtained by calling the Trustee's customer service desk
at (800) 934-6802.

         (b) By April 30 of each year beginning in 2005, the Trustee will
furnish such report to each Holder of the Certificates of record at any time
during the prior calendar year as to the aggregate of amounts reported pursuant
to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator or the
Trustee pursuant to the requirements of the Code.

         Section 6.05  MONTHLY ADVANCES.

         If the Scheduled Payment on a Mortgage Loan that was due on a related
Due Date is delinquent other than as a result of application of the Relief Act
and for which the related Servicer was required to make an advance pursuant to
the related Servicing Agreement exceeds the amount deposited in the Master
Servicer Collection Account which will be used for an advance with respect to
such Mortgage Loan, the Master Servicer will deposit in the Master Servicer
Collection Account not later than the Distribution Account Deposit Date
immediately preceding the related Distribution Date an amount equal to such
deficiency, net of the Servicing

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Fee for such Mortgage Loan except to the extent the Master Servicer determines
any such advance to be a Nonrecoverable Advance. Subject to the foregoing, the
Master Servicer shall continue to make such advances through the date that the
related Servicer is required to do so under its Servicing Agreement. If the
Master Servicer deems an advance to be a Nonrecoverable Advance, on the
Distribution Account Deposit Date, the Master Servicer shall present an
Officer's Certificate to the Trustee (i) stating that the Master Servicer elects
not to make a Monthly Advance in a stated amount and (ii) detailing the reason
it deems the advance to be a Nonrecoverable Advance.

         Section 6.06 COMPENSATING INTEREST PAYMENTS.

         The Master Servicer shall deposit in the Master Servicer Collection
Account not later than each Distribution Account Deposit Date an amount equal to
the lesser of (i) the sum of the aggregate amounts required to be paid by the
Servicers under the Servicing Agreements with respect to subclauses (a) and (b)
of the definition of Interest Shortfall with respect to the Mortgage Loans for
the related Distribution Date, and not so paid by the related Servicers and (ii)
the Master Servicer Compensation for such Distribution Date (such amount, the
"Compensating Interest Payment"). The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.

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                                  ARTICLE VII
                               The Master Servicer

         Section 7.01 LIABILITIES OF THE MASTER SERVICER.

         The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by it herein.

         Section 7.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER.

         (a) The Master Servicer will keep in full force and effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement.

(b) Any Person into which the Master Servicer may be merged or consolidated, or
any corporation resulting from any merger or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
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.

         Section 7.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND
THE SECURITIES ADMINISTRATOR.

         (a) The Master Servicer agrees to indemnify the Indemnified Persons
for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Servicing Agreements, the Assignment
Agreements or the Certificates or the powers of attorney delivered by the
Trustee hereunder (i) related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or by reason of
reckless disregard of its obligations and duties hereunder, provided, in each
case, that with respect to any such claim or legal action (or pending or
threatened claim or legal action), the Trustee shall have given the Master
Servicer and the Depositor written notice thereof promptly after the Trustee
shall have with respect to such claim or legal action knowledge thereof. The
Master Servicer's failure to receive any such notice shall not affect the
Trustee's right to indemnification hereunder, except to the extent the Master
Servicer is materially prejudiced by such failure to give notice. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.

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         (b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.

         Section 7.04 LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND
OTHERS.

         Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:

         (a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Trust Fund or the Certificateholders for
taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.

         (b) The Master Servicer and any director, officer, employee or agent of
the Master 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.

         (c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer is indemnified by the Servicer
thereunder), other than (i) any such loss, liability or expense related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement), or to the Custodian's failure to
perform its duties under the Custodial Agreement, respectively, or (ii) any such
loss, liability or expense incurred by reason of the Master Servicer's or the
Custodian's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or under the Custodial Agreement, as applicable,
or by reason of reckless disregard of obligations and duties hereunder or under
the Custodial Agreement, as applicable.

         (d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably withheld),
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the

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Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 4.03. Nothing in this
Subsection 7.04(d) shall affect the Master Servicer's obligation to supervise,
or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Subsection 3.01(a).

         (e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.

         (f) The Master Servicer shall not be liable for any acts or omissions
of any Servicer, except as otherwise expressly provided herein.

         Section 7.05  MASTER SERVICER NOT TO RESIGN.

         Except as provided in Section 7.07, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it except upon a
determination that any such duties hereunder are no longer permissible under
applicable law and such impermissibility cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Independent Counsel addressed to the Trustee to such effect delivered
to the Trustee. No such resignation by the Master Servicer shall become
effective until the Company or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 8.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer.

         Section 7.06  SUCCESSOR MASTER SERVICER.

         In connection with the appointment of any successor master servicer or
the assumption of the duties of the Master Servicer, the Company or the Trustee
may make such arrangements for the compensation of such successor master
servicer out of payments on the Mortgage Loans as the Company or the Trustee and
such successor master servicer shall agree. If the successor master servicer
does not agree that such market value is a fair price, such successor master
servicer shall obtain two quotations of market value from third parties actively
engaged in the servicing of single-family mortgage loans. Notwithstanding the
foregoing, the compensation payable to a successor master servicer may not
exceed the compensation which the Master Servicer would have been entitled to
retain if the Master Servicer had continued to act as Master Servicer hereunder.

         Section 7.07  SALE AND ASSIGNMENT OF MASTER SERVICING.

         The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement
and the Company may terminate the Master Servicer without cause and select a new
Master Servicer; provided, however, that: (i) the purchaser or transferee
accepting such assignment and delegation (a) shall be a Person which

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shall be qualified to service mortgage loans for Fannie Mae or Freddie Mac; (b)
shall have a net worth of not less than $10,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee);
and (d) shall execute and deliver to the Trustee an agreement, in form and
substance reasonably satisfactory to the Trustee, which contains an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as master servicer
under this Agreement, any custodial agreement from and after the effective date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; (iii) the Master
Servicer assigning and selling the master servicing shall deliver to the Trustee
an Officer's Certificate and an Opinion of Independent Counsel addressed to the
Trustee, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by the Company, the Company shall pay the terminated
Master Servicer a termination fee equal to 0.25% of the aggregate Scheduled
Principal Balance of the Mortgage Loans at the time the master servicing of the
Mortgage Loans is transferred to the successor Master Servicer. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.

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                                  ARTICLE VIII
                                     Default

         Section 8.01 EVENTS OF DEFAULT.

         "Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) and only with respect to the
defaulting Master Servicer:

                  (i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to this
Agreement (other than a Monthly Advance), and such failure continues unremedied
for a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer; or

                  (ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues unremedied
for a period of 60 days after the date on which written notice of such failure,
properly requiring the same to be remedied, shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the Holders
of Certificates evidencing Fractional Undivided Interests aggregating not less
than 25% of the Trust Fund; or

                  (iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, 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, and
the continuance of any such decree or order is unstayed and in effect for a
period of 60 consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization statute and
the petition is not dismissed within 60 days after the commencement of the case;
or

                  (iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or substantially all of its property; or the Master Servicer
admits in writing its inability to pay its debts generally as they become due,
files a petition to take advantage of any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations;

                  (v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07; or

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                  (vi) The Master Servicer fails to deposit, or cause to be
deposited, in the Distribution Account any Monthly Advance (other than a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the Distribution
Account Deposit Date.

In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of the Company, may
terminate all of the rights and obligations (but not the liabilities) of the
Master Servicer under this Agreement and in and to the Mortgage Loans and/or the
REO Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
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. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.

         Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.

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         Section 8.02  TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         (a) Upon the receipt by the Master Servicer of a notice of termination
pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to
Section 7.05 to the effect that the Master Servicer is legally unable to act or
to delegate its duties to a Person which is legally able to act, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided, however, that the Company
shall have the right to either (a) immediately assume the duties of the Master
Servicer or (b) select a successor Master Servicer; provided further, however,
that the Trustee shall have no obligation whatsoever with respect to any
liability (other than advances deemed recoverable and not previously made)
incurred by the Master Servicer at or prior to the time of termination. As
compensation therefor, but subject to Section 7.06, the Trustee shall be
entitled to compensation which the Master Servicer would have been entitled to
retain if the Master Servicer had continued to act hereunder, except for those
amounts due the Master Servicer as reimbursement permitted under this Agreement
for advances previously made or expenses previously incurred. Notwithstanding
the above, the Trustee may, if it shall be unwilling so to act, or shall, if it
is legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution
which is a Fannie Mae- or Freddie Mac-approved servicer, and with respect to a
successor to the Master Servicer only, having a net worth of not less than
$10,000,000, as the successor to the Master Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder; provided, that the Trustee shall obtain a letter from each
Rating Agency that the ratings, if any, on each of the Certificates will not be
lowered as a result of the selection of the successor to the Master Servicer.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall 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 the Mortgage Loans as it and
such successor shall agree; provided, however, that the provisions of Section
7.06 shall apply, the compensation shall not be in excess of that which the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder, and that such successor shall undertake and assume the
obligations of the Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.

         (b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.

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         Section 8.03  NOTIFICATION TO CERTIFICATEHOLDERS.

         Upon any termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Rating Agencies.

         Section 8.04  WAIVER OF DEFAULTS.

         The Trustee shall transmit by mail to all Certificateholders, within 60
days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default. The Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund may, on behalf of all Certificateholders, waive any default by the
Master Servicer in the performance of its obligations hereunder and the
consequences thereof, except a default in the making of or the causing to be
made any required distribution on the Certificates, which default may only be
waived by Holders of Certificates evidencing Fractional Undivided Interests
aggregating 100% of the Trust Fund. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.

         Section 8.05  LIST OF CERTIFICATEHOLDERS.

         Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Trustee will afford such Certificateholders
access during business hours to the most recent list of Certificateholders held
by the Trustee.

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                                   ARTICLE IX
             Concerning the Trustee and the Securities Administrator

         Section 9.01  DUTIES OF TRUSTEE.

         (a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred, and
the Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own affairs.

         (b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished hereunder; provided, further, that neither
the Trustee nor the Securities Administrator shall be responsible for the
accuracy or verification of any calculation provided to it pursuant to this
Agreement.

         (c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.01 and 10.01 herein based
solely on the report of the Securities Administrator.

         (d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:

                  (i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator shall be
determined solely by the express provisions of this Agreement, neither the
Trustee nor the Securities Administrator shall be liable except for the
performance of their respective duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee or the Securities Administrator and, in the
absence of bad faith on the part of the Trustee or the Securities Administrator,
respectively, the Trustee or the Securities Administrator, respectively, may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee or the Securities Administrator, respectively, and conforming to the
requirements of this Agreement;

                  (ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or

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Responsible Officers of the Trustee or an officer of the Securities
Administrator, respectively, unless it shall be proved that the Trustee or the
Securities Administrator, respectively, was negligent in ascertaining the
pertinent facts;

                  (iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the directions of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
25% of the Trust Fund, if such action or non-action relates to the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or the Securities Administrator, respectively, or exercising any trust or other
power conferred upon the Trustee or the Securities Administrator, respectively,
under this Agreement;

                  (iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have actual
knowledge thereof. In the absence of such notice, the Trustee may conclusively
assume there is no such default or Event of Default;

                  (v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such insufficiency
(except to the extent that the Trustee is obligor and has defaulted thereon);

                  (vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities Administrator
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Trustee or
the Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action;

                  (vii) None of the Securities Administrator, the Depositor, the
Company or the Trustee shall be responsible for the acts or omissions of the
other, it being understood that this Agreement shall not be construed to render
them partners, joint venturers or agents of one another and

                  (viii) Neither the Trustee nor the Securities Administrator
shall be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under the Servicing Agreements, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.

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         (e) All funds received by the Master Servicer and the Trustee and
required to be deposited in the Master Servicer Collection Account or
Distribution Account pursuant to this Agreement will be promptly so deposited by
the Master Servicer and the Trustee.

         (f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.

         Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES
ADMINISTRATOR.

         Except as otherwise provided in Section 9.01:

                  (i) The Trustee and the Securities Administrator may rely and
shall be protected in acting or refraining from acting in reliance on any
resolution, certificate of the Depositor, the Master Servicer or a Servicer,
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 and the Securities Administrator may consult
with counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action taken
or suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel:

                  (iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers vested in
it by this Agreement, other than its obligation to give notices pursuant to this
Agreement, or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby. Nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge (which has not been
cured or waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise, as a
prudent person would exercise under the circumstances in the conduct of his own
affairs;

                  (iv) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiver of all Events of Default which may have occurred,
neither the Trustee nor the Securities Administrator shall be liable in its
individual capacity 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;

                  (v) Neither the Trustee nor the Securities Administrator shall
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement,

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instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
25% of the Trust Fund and provided that the payment within a reasonable time to
the Trustee or the Securities Administrator, as applicable, of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee or the Securities Administrator,
as applicable, reasonably assured to the Trustee or the Securities
Administrator, as applicable, by the security afforded to it by the terms of
this Agreement. The Trustee or the Securities Administrator may require
reasonable indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall be paid
by the Certificateholders requesting the investigation;

                  (vi) The Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however, that the
Trustee may not appoint any agent to perform its custodial functions with
respect to the Mortgage Files or paying agent functions under this Agreement
without the express written consent of the Master Servicer, which consent will
not be unreasonably withheld. Neither the Trustee nor the Securities
Administrator shall be liable or responsible for the misconduct or negligence of
any of the Trustee's or the Securities Administrator's agents or attorneys or a
custodian or paying agent appointed hereunder by the Trustee or the Securities
Administrator with due care and, when required, with the consent of the Master
Servicer;

                  (vii) Should the Trustee or the Securities Administrator deem
the nature of any action required on its part, other than a payment or transfer
under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action that it
be provided by the Depositor with reasonable further instructions;

                  (viii) The right of the Trustee or the Securities
Administrator to perform any discretionary act enumerated in this Agreement
shall not be construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence or willful
misconduct in the performance of any such act;

                  (ix) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety with respect to the execution of
the trust created hereby or the powers granted hereunder, except as provided in
Subsection 9.07; and

                  (x) Neither the Trustee nor the Securities Administrator shall
have any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by the Seller
pursuant to this Agreement or the Mortgage Loan Purchase Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.

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         Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS.

         The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Depositor, and neither the Trustee, or the
Custodian on its behalf, nor the Securities Administrator shall have any
responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) or of any Mortgage Loan except as expressly provided in
Sections 2.02 and 2.05 hereof; provided, however, that the foregoing shall not
relieve the Trustee, or the Custodian on its behalf, of the obligation to review
the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's signature
and countersignature (or countersignature of its agent) on the Certificates
shall be solely in its capacity as Trustee and shall not constitute the
Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing statement or continuation statement in
any public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to record this
Agreement.

         Section 9.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES.

         The Trustee and the Securities Administrator in its individual capacity
or in any capacity other than as Trustee hereunder may become the owner or
pledgee of any Certificates with the same rights it would have if it were not
Trustee or the Securities Administrator, as applicable, and may otherwise deal
with the parties hereto.

         Section 9.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND
EXPENSES.

         The fees and expenses of the Trustee and the Securities Administrator
shall be paid in accordance with a side letter agreement between the Trustee and
the Master Servicer. In addition, the Trustee and the Securities Administrator
will be entitled to recover from the Master Servicer Collection Account pursuant
to Section 4.03(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,

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respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor and the Depositor hereby agrees to pay
such expenses, disbursements or advances upon demand. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

         Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR.

         The Trustee and any successor Trustee and the Securities Administrator
and any successor Securities Administrator shall during the entire duration of
this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by S&P with respect to their long-term rating and
rated "BBB" or higher by S&P and "Baa2" or higher by Moody's with respect to any
outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant to
Section 9.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies. If the Trustee 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 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee or the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.

         Section 9.07 INSURANCE.

         The Trustee and the Securities Administrator, at their own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Trustee or the
Securities Administrator as to the Trustee's or the Securities Administrator's,
respectively, compliance with this Section 9.07 shall be furnished to any
Certificateholder upon reasonable written request.

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         Section 9.08 RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES
ADMINISTRATOR.

         (a) The Trustee and the Securities Administrator may at any time resign
and be discharged from the Trust hereby created by giving written notice thereof
to the Depositor and the Master Servicer, with a copy to the Rating Agencies.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor Trustee or successor Securities Administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee or Securities Administrator, as
applicable, the successor Trustee or Securities Administrator, as applicable. If
no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator.

         (b) If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 9.06 and shall
fail to resign after written request therefor by the Depositor or if at any time
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.

         (c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Depositor, the Master
Servicer, the Securities Administrator (if the Trustee is removed), the Trustee
(if the Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee or
successor Securities Administrator, in excess of the amount paid to the
predecessor Trustee or predecessor Securities Administrator, as applicable.

         (d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.

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         Section 9.09 SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR.

         (a) Any successor Trustee or Securities Administrator appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the Depositor
and to its predecessor Trustee or Securities Administrator an instrument
accepting such appointment hereunder. The resignation or removal of the
predecessor Trustee or Securities Administrator shall then become effective and
such successor Trustee or Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee or Securities Administrator herein. The predecessor
Trustee or Securities Administrator shall after payment of its outstanding fees
and expenses promptly deliver to the successor Trustee or Securities
Administrator, as applicable, all assets and records of the Trust held by it
hereunder, and the Depositor and the predecessor Trustee or Securities
Administrator, as applicable, shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee or Securities Administrator, as
applicable, all such rights, powers, duties and obligations.

         (b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.

         (c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. The Company
shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.

         Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.

         Any state bank or trust company or national banking association into
which the Trustee or the Securities Administrator may be merged or converted or
with which it may be consolidated or any state bank or trust company or national
banking association resulting from any merger, conversion or consolidation to
which the Trustee or the Securities Administrator, respectively, shall be a
party, or any state bank or trust company or national banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee or the Securities Administrator, respectively, shall be the successor of
the Trustee or the Securities Administrator, respectively, hereunder, provided
such state bank or trust company or national banking association shall be
eligible under the provisions of Section 9.06. Such succession shall be valid
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

         Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         (a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property

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constituting the same may at the time be located, the
Depositor 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 and the Depositor 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, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 9.11, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable.

         (b) If the Depositor shall not have joined in such appointment within
15 days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.

         (c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.

         (d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
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 or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

         (e) 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 IX. 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.

         (f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
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.

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         (g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Depositor and the Trustee acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee.

         Section 9.12 FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; REMIC ADMINISTRATION.

         (a) For federal income tax purposes, the taxable year of each REMIC
shall be a calendar year and the Securities Administrator shall maintain or
cause the maintenance of the books of each such REMIC on the accrual method of
accounting.

         (b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each REMIC, the Trust Fund, if applicable, and the Certificates containing such
information and at the times and in the manner as may be required by the Code or
applicable Treasury regulations, and shall furnish to each Holder of
Certificates at any time during the calendar year for which such returns or
reports are made such statements or information at the times and in the manner
as may be required thereby, including, without limitation, reports relating to
interest, original issue discount and market discount or premium (using a
constant prepayment assumption of 25% CPR). The Securities Administrator will
apply for an Employee Identification Number from the IRS under Form SS-4 or any
other acceptable method for all tax entities. In connection with the foregoing,
the Securities Administrator shall timely prepare and file, and the Trustee
shall sign, IRS Form 8811, which shall provide the name and address of the
person who can be contacted to obtain information required to be reported to the
holders of regular interests in each REMIC (the "REMIC Reporting Agent"). The
Trustee shall make elections to treat each REMIC as a REMIC (which elections
shall apply to the taxable period ending December 31, 2004 and each calendar
year thereafter) in such manner as the Code or applicable Treasury regulations
may prescribe, and as described by the Securities Administrator. The Trustee
shall sign all tax information returns filed pursuant to this Section and any
other returns as may be required by the Code. The Holder of the Class R-I
Certificate is hereby designated as the "Tax Matters Person" (within the meaning
of Treas. Reg. ss.ss.1.860F-4(d)) for REMIC I and the Holder of the Class R-II
Certificate is hereby designated as the "Tax Matters Person" for REMIC II. The
Securities Administrator is hereby designated and appointed as the agent of each
such Tax Matters Person. Any Holder of a Residual Certificate will by acceptance
thereof appoint the Securities Administrator as agent and attorney-in-fact for
the purpose of acting as Tax Matters Person for each REMIC during such time as
the Securities Administrator does not own any such Residual Certificate. In the
event that the Code or applicable Treasury regulations prohibit the Trustee from
signing tax or information returns or other statements, or the Securities
Administrator from acting as agent for the Tax Matters Person, the Trustee and
the Securities Administrator shall take whatever action that in its sole good
faith judgment is necessary for the proper filing of such information returns or
for the provision of a tax matters person, including designation of the Holder
of a Residual Certificate to sign such returns or act as tax matters person.
Each Holder of a Residual Certificate shall be bound by this Section.

                                      104
<PAGE>

         (c) The Securities Administrator shall provide upon request and receipt
of reasonable compensation, such information as required in Section
860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person
purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding
an interest in a pass-through entity described in Section 860E(e)(6) of the
Code, any record holder of which is not a transferee permitted by Section
5.05(b) (or which is deemed by statute to be an entity with a disqualified
member).

         (d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required under
Applicable State Law with respect to each REMIC or the Trust Fund.

         (e) Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.

         (f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants and the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.

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<PAGE>

                                    ARTICLE X
                                   Termination

         Section 10.01 TERMINATION UPON REPURCHASE BY THE DEPOSITOR OR ITS
DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS.

         (a) Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:

                  (i) the repurchase by or at the direction of the Depositor or
its designee of all of the Mortgage Loans and all related REO Property remaining
in the Trust at a price (in each case, the "Termination Purchase Price") equal
to the sum of (a) 100% of the Outstanding Principal Balance of each Mortgage
Loan (other than a Mortgage Loan related to REO Property) as of the date of
repurchase, net of the principal portion of any unreimbursed Monthly Advances
made by the purchaser, together with interest at the applicable Mortgage
Interest Rate accrued but unpaid to, but not including, the first day of the
month of repurchase, (b) the appraised value of any related REO Property, less
the good faith estimate of the Depositor of liquidation expenses to be incurred
in connection with its disposal thereof (but not more than the Outstanding
Principal Balance of the related Mortgage Loan, together with interest at the
applicable Mortgage Interest Rate accrued on that balance but unpaid to, but not
including, the first day of the month of repurchase), such appraisal to be
calculated by an appraiser mutually agreed upon by the Depositor and the Trustee
at the expense of the Depositor, (c) unreimbursed out-of pocket costs of the
Master Servicer, including unreimbursed servicing advances and the principal
portion of any unreimbursed Monthly Advances, made on the Mortgage Loans prior
to the exercise of such repurchase right and (d) any unreimbursed costs and
expenses of the Trustee and the Securities Administrator payable pursuant to
Section 9.05; or

                  (ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage Loan
remaining in the Trust Fund or the disposition of all property acquired with
respect to any Mortgage Loan; provided, however, that in the event that an
advance has been made, but not yet recovered, at the time of such termination,
the Person having made such advance shall be entitled to receive,
notwithstanding such termination, any payments received subsequent thereto with
respect to which such advance was made; or

                  (iii) the payment to the Certificateholders of all amounts
required to be paid to them pursuant to this Agreement.

         (b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.

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         (c) The right of the Depositor or its designee to repurchase all the
assets of the Trust Fund as described in Subsection 10.01(a)(i) above shall be
exercisable only if (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans at the time of any such repurchase is less than 10% of the
Cut-Off Date Balance, or (ii) the Depositor, based upon an Opinion of Counsel
addressed to the Depositor, the Trustee and the Securities Administrator, has
determined that the REMIC status of REMIC I or REMIC II has been lost or that a
substantial risk exists that such REMIC status will be lost for the then-current
taxable year. At any time thereafter, in the case of (i) or (ii) above, the
Depositor may elect to terminate REMIC I and REMIC II at any time, and upon such
election, the Depositor or its designee, shall repurchase all the assets of the
Trust Fund described in Subsection 10.01(a)(i) above.

         (d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed not
earlier than the l5th day and not later than the 25th day of the month next
preceding the month of such final distribution, and shall specify (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of the Certificates at the office of the Trustee
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Trustee therein specified.

         (e) If the option of the Depositor to repurchase or cause the
repurchase of all the assets in the Trust Fund as described in Subsection
10.01(a)(i) above, is exercised, the Depositor and/or its designee shall deliver
to the Trustee for deposit in the Distribution Account, by the Business Day
prior to the applicable Distribution Date, an amount equal to the Termination
Purchase Price. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to such Certificateholders as
directed by the Securities Administrator in writing an amount determined as
follows: with respect to each Certificate (other than the Class R Certificates),
the outstanding Current Principal Amount, plus with respect to each Certificate
(other than the Class R Certificates), one month's interest thereon at the
applicable Pass-Through Rate; and with respect to the Class R Certificates, the
percentage interest evidenced thereby multiplied by the difference, if any,
between the above described repurchase price and the aggregate amount to be
distributed to the Holders of the Certificates in such Certificate Group (other
than the Class R Certificates). If the proceeds with respect to the Mortgage
Loans of a Loan Group are not sufficient to pay all of the Senior Certificates
of the related Certificate Group in full, any such deficiency shall be allocated
first, to the Subordinate Certificates, in inverse order of their numerical
designation and then to the Senior Certificates of the related Certificate Group
on a pro rata basis. Upon deposit of the Termination Purchase Price and
following such final Distribution Date, the Trustee shall release promptly to
the Depositor and/or its designee the Mortgage Files for the remaining Mortgage
Loans, and the Accounts with respect thereto shall terminate, subject to the
Trustee's obligation to hold any amounts payable to the Certificateholders in
trust without interest pending final distributions pursuant to Subsection
10.01(g). Any other amounts remaining in the Accounts will belong to the
Depositor.

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<PAGE>

         (f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Distribution
Account all distributable amounts remaining in the Master Servicer Collection
Account. Upon the presentation and surrender of the Certificates, the Trustee
shall distribute to the remaining Certificateholders, pursuant to the written
direction of the Securities Administrator and in accordance with their
respective interests, all distributable amounts remaining in the Distribution
Account. Upon deposit by the Master Servicer of such distributable amounts, and
following such final Distribution Date, the Trustee shall release promptly to
the Depositor or its designee the Mortgage Files for the remaining Mortgage
Loans, and the Master Servicer Collection Account and the Distribution Account
shall terminate, subject to the Trustee's obligation to hold any amounts payable
to the Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 10.01(f).

         (g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time 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, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any 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 which remain subject to this Agreement.

         Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS.

         (a) If the option of the Depositor to repurchase all of the Mortgage
Loans under Subsection 10.01(a)(i) above is exercised, the Trust Fund and each
REMIC shall be terminated in accordance with the following additional
requirements, unless the Trustee has been furnished with an Opinion of Counsel
addressed to the Trustee to the effect that the failure of the Trust to comply
with the requirements of this Section 10.02 will not (i) result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code on any REMIC or (ii) cause any REMIC to fail to qualify as a REMIC at
any time that any Regular Certificates are outstanding:

                  (i) within 90 days prior to the final Distribution Date, at
the written direction of the Depositor, the Trustee, as agent for the respective
Tax Matters Persons, shall adopt a plan of complete liquidation of each REMIC in
the case of a termination under Subsection 10.01(a)(i), provided to it by the
Depositor, which meets the requirements of a "qualified liquidation" under
Section 860F of the Code and any regulations thereunder;

                  (ii) the Depositor shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell or
otherwise dispose of all of the remaining assets of the Trust Fund in accordance
with the terms hereof; and

                                      108
<PAGE>

                  (iii) at or after the time of adoption of such a plan of
complete liquidation of each REMIC, and at or prior to the final Distribution
Date relating thereto, the Trustee shall sell for cash all of the assets of the
Trust to or at the direction of the Depositor, and each REMIC shall terminate at
such time.

         (b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
related REMIC upon the written request of the Depositor, and to take such action
in connection therewith as may be reasonably requested by the Depositor and (ii)
appoint the Depositor as their attorney-in-fact, with full power of
substitution, for purposes of adopting such a plan of complete liquidation. The
Trustee shall adopt such plan of liquidation by filing the appropriate statement
on the final tax return of each REMIC. Upon complete liquidation or final
distribution of all of the assets of the Trust Fund, the Trust Fund and each
REMIC shall terminate.

                                      109
<PAGE>

                                   ARTICLE XI

                            Miscellaneous Provisions

         Section 11.01 INTENT OF PARTIES.

         The parties intend that each of REMIC I and REMIC II shall be treated
as a REMIC for federal income tax purposes and that the provisions of this
Agreement should be construed in furtherance of this intent.

         Section 11.02 AMENDMENT.

         (a) This Agreement may be amended from time to time by the Company, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee,
without notice to or the consent of any of the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions herein or therein that may be
defective or inconsistent with any other provisions herein or therein, to comply
with any changes in the Code or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Independent Counsel, addressed
to the Trustee, adversely affect in any material respect the interests of any
Certificateholder.

         (b) This Agreement may also be amended from time to time by the
Company, the Master Servicer, the Depositor, the Securities Administrator and
the Trustee, with the consent of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
or of the applicable Class or Classes, if such amendment affects only such Class
or Classes, 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 Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding, or (iii) cause any REMIC to fail to qualify as a
REMIC for federal income tax purposes, as evidenced by an Opinion of Independent
Counsel addressed to the Trustee which shall be provided to the Trustee other
than at the Trustee's expense. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.02(b), Certificates registered in the name of or held for the
benefit of the Depositor, the Securities Administrator, the Master Servicer, or
the Trustee or any Affiliate thereof shall be entitled to vote their Fractional
Undivided Interests with respect to matters affecting such Certificates.

         (c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agencies.

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<PAGE>

         (d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. 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.

         (e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
addressed to the Trustee stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee and the Securities
Administrator may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's or the Securities Administrator's own respective
rights, duties or immunities under this Agreement.

         Section 11.03 RECORDATION OF AGREEMENT.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Depositor shall effect such recordation, at the expense
of the Trust upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.

         Section 11.04 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

         (a) The death or incapacity of any Certificateholder shall not
terminate this Agreement or the Trust, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

         (b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, 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 establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

         (c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Depositor, the Securities Administrator, the Master Servicer or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the

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Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs and expenses and liabilities to be incurred
therein or thereby, and (iii) 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.

         (d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

         Section 11.05 ACTS OF CERTIFICATEHOLDERS.

         (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is expressly required, to the
Depositor. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 11.05.

         (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.

         (c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Securities Administrator, the Depositor, the Master Servicer nor
any successor to any such parties shall be affected by any notice to the
contrary.

         (d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the holder of any Certificate shall bind every future
holder of the same Certificate and

                                      112
<PAGE>

the holder of every Certificate issued upon the registration of transfer or
exchange thereof, if applicable, or in lieu thereof with respect to anything
done, omitted or suffered to be done by the Trustee, the Securities
Administrator, the Depositor, the Master Servicer or any successor to any such
party in reliance thereon, whether or not notation of such action is made upon
such Certificates.

         (e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any Affiliate thereof shall be disregarded, except as
otherwise provided in Section 11.02(b) and except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the Trustee,
the Securities Administrator, the Depositor, the Master Servicer or any
Affiliate thereof may be regarded as outstanding if the pledgor establishes to
the satisfaction of the Trustee the pledgor's right to act with respect to such
Certificates and that the pledgor is not an Affiliate of the Trustee, the
Securities Administrator, the Depositor, or the Master Servicer, as the case may
be.

         Section 11.06 GOVERNING LAW.

         THIS AGREEMENT AND THE CERTIFICATES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, WHICH THE
PARTIES HERETO EXPRESSLY RELY UPON IN THE CHOICE OF SUCH LAW AS THE GOVERNING
LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         Section 11.07 NOTICES.

         All demands and notices hereunder shall be in writing and shall be
deemed given when delivered at (including delivery by facsimile) or mailed by
registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, to (i) in the case of the Depositor, 383 Madison Avenue, New
York, New York 10179, Attention: Vice President-Servicing, telecopier number:
(212) 272-5591, or to such other address as may hereafter be furnished to the
other parties hereto in writing; (ii) in the case of the Trustee, at its
Corporate Trust Office, or such other address as may hereafter be furnished to
the other parties hereto in writing; (iii) in the case of the Company, 383
Madison Avenue, New York, New York 10179, Attention: Vice President-Servicing,
telecopier number: (212) 272-5591, or to such other address as may hereafter be
furnished to the other parties hereto in writing; (iv) in the case of the Master
Servicer or Securities Administrator, Wells Fargo Bank, National Association,
P.O. Box 98, Columbia Maryland 21046 (or, in the case of overnight deliveries,
9062 Old Annapolis Road, Columbia, Maryland 21045) (Attention: Corporate Trust
Services - BART 2004-6), facsimile no.: (410) 715-2380, or such other address as
may hereafter be furnished to the other parties

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<PAGE>

hereto in writing; or (v) in the case of the Rating Agencies, Moody's Investors
Service, Inc., 99 Church Street, New York, New York 10007 and Standard & Poor's,
a division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New
York 10041. Any notice delivered to the Depositor, the Master Servicer, the
Securities Administrator or the Trustee under this Agreement shall be effective
only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.

         Section 11.08 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 severed from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the holders thereof.

         Section 11.09 SUCCESSORS AND ASSIGNS.

         The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto.

Section 11.10  ARTICLE AND SECTION HEADINGS.

         The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.

         Section 11.11 COUNTERPARTS.

         This Agreement may be executed in two or more counterparts each of
which when so executed and delivered shall be an original but all of which
together shall constitute one and the same instrument.

         Section 11.12 NOTICE TO RATING AGENCIES.

         The article and section headings herein are for convenience of
reference only, and shall not limited or otherwise affect the meaning hereof.
The Trustee shall promptly provide notice to each Rating Agency with respect to
each of the following of which a Responsible Officer of the Trustee has actual
knowledge:

         1. Any material change or amendment to this Agreement or the Servicing
Agreements;

         2. The occurrence of any Event of Default that has not been cured;

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<PAGE>

         3. The resignation or termination of the Master Servicer, the Trustee
or the Securities Administrator;

         4. The repurchase or substitution of Mortgage Loans;

         5. The final payment to Certificateholders; and

         6. Any change in the location of the Master Servicer Collection Account
or the Distribution Account.

                                      115
<PAGE>

         IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and
the Securities Administrator have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.

                            STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., as
                            Depositor

                            By: /S/ BARON SILVERSTEIN
                               -------------------------------------------------
                            Name: Baron Silverstein
                            Title:   Vice President

                            U.S. BANK NATIONAL
                            ASSOCIATION, as Trustee

                            By: /S/ VANETA I. BERNARD
                               -------------------------------------------------
                            Name:  Vaneta I. Bernard
                            Title: Vice President

                            WELLS FARGO BANK, NATIONAL ASSOCIATION, as Master
                            Servicer

                            By: /S/ STACEY TAYLOR
                               -------------------------------------------------
                            Name:  Stacey Taylor
                            Title: Assistant Vice President

                            WELLS FARGO BANK, NATIONAL ASSOCIATION, as
                            Securities Administrator

                            By: /S/ STACEY TAYLOR
                               -------------------------------------------------
                            Name:  Stacey Taylor
                            Title: Assistant Vice President

                                      116
<PAGE>

                            EMC MORTGAGE CORPORATION

                            By: /s/ Dana Dillard
                               -------------------------------------------------
                            Name:  Dana Dillard
                            Title: Senior Vice President

Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)

in its capacity as Seller

EMC MORTGAGE CORPORATION

By: /s/ Dana Dillard
    ---------------------------------
Name:  Dana Dillard
Title: Senior Vice President

                                      117
<PAGE>

STATE OF NEW YORK )
                                    ) ss.:
COUNTY OF NEW YORK                  )

         On the ___ day of July, 2004 before me, a notary public in and for said
State, personally appeared Baron Silverstein, known to me to be a Vice President
of Structured Asset Mortgage Investments II Inc., the corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                   __________________________
                                                   Notary Public

[Notarial Seal]

                                      118
<PAGE>

STATE OF MASSACHUSETTS                      )
                                            ) ss.:
COUNTY OF SUFFOLK          )

         On the ___ day of July, 2004 before me, a notary public in and for said
State, personally appeared Vaneta I. Bernard, known to me to be a Vice President
of U.S. Bank National Association, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                   __________________________
                                                   Notary Public

[Notarial Seal]

                                      119
<PAGE>

STATE OF MARYLAND                   )
                                    ) ss.:
COUNTY OF         HOWARD   )

         On the ____ day of July, 2004 before me, a notary public in and for
said State, personally appeared Stacey Taylor, known to me to be an Assistant
Vice President of Wells Fargo Bank, National Association, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                   __________________________
                                                   Notary Public

[Notarial Seal]

                                      120
<PAGE>

STATE OF MARYLAND                   )
                                    ) ss.:
COUNTY OF         HOWARD   )

         On the ___ day of July, 2004 before me, a notary public in and for said
State, personally appeared _____________________, known to me to be a(n)
_____________________of Wells Fargo Bank, National Association, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                   __________________________
                                                   Notary Public

[Notarial Seal]

                                      121
<PAGE>

STATE OF TEXAS             )
                                    ) ss.:
COUNTY OF DALLAS                    )

         On the ___ day of July, 2004 before me, a notary public in and for said
State, personally appeared Dana Dillard, known to me to be a Senior Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                   __________________________
                                                   Notary Public

[Notarial Seal]

                                      122
<PAGE>

STATE OF TEXAS             )
                                    ) ss.:
COUNTY OF DALLAS                    )

         On the ___ day of July, 2004 before me, a notary public in and for said
State, personally appeared Dana Dillard, known to me to be a Senior Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                   __________________________
                                                   Notary Public

[Notarial Seal]

                                      123
<PAGE>

                                                                     EXHIBIT A-1

                       FORM OF CLASS [_-[A]-_] CERTIFICATE

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL
BE REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL
BE MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

                                      A-1-1

<PAGE>

<TABLE>
<CAPTION>
<S>           <C>
Certificate No.1                                          [Variable] Pass-Through Rate

Class [_-[A]-_] Senior

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date:                                             this Senior Certificate as of the Cut-off Date:
July 1, 2004                                              $[_____________]

First Distribution Date:                                  Initial Current Principal Amount of this Senior
August 25, 2004                                           Certificate as of the Cut-off Date:
                                                          $[-------------]

Master Servicer:
Wells Fargo Bank, National Association                    CUSIP: [____________]

Assumed Final Distribution Date:
September 25, 2034
</TABLE>

                          BEAR STEARNS ARM TRUST 2004-6
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-6

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [_-[A]-_] Certificates with respect to a Trust
         Fund consisting primarily of a pool of adjustable rate mortgage loans
         secured by first liens on one-to-four family residential properties
         sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments II Inc., the Master Servicer or the Trustee referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any
governmental entity or by Structured Asset Mortgage Investments II Inc., the
Master Servicer or the Trustee or any of their affiliates or any other person.
None of Structured Asset Mortgage Investments II Inc., the Master Servicer or
any of their affiliates will have any obligation with respect to any certificate
or other obligation secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("SAMI
II"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI
II. Wells Fargo Bank, National Association ("Wells Fargo") will act as master
servicer of the Mortgage Loans (the "Master Servicer", which term includes any
successors thereto under the Agreement referred to below). The

                                      A-1-2

<PAGE>

Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among EMC Mortgage
Corporation, as seller and company (the "Seller"), SAMI II, as depositor (the
"Depositor"), Wells Fargo Bank, National Association as master servicer and
securities administrator (in such capacity, the "Securities Administrator") and
U.S. Bank National Association, as trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, capitalized terms used herein shall have the meaning ascribed to
them in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

                  Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial Current Principal Amount of this Certificate is set
forth above. The Current Principal Amount hereof will be reduced to the extent
of distributions allocable to principal hereon and any Realized Losses allocable
hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in thirteen Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                                      A-1-3

<PAGE>

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the

                                      A-1-4

<PAGE>

Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-1-5

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: __________, 20__          U.S. BANK NATIONAL ASSOCIATION
                                 Not in its individual capacity but solely as
                                 Trustee

                                 By:
                                      ------------------------------------------
                                          Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class [_-[A]-_] Certificates referred to in
the within-mentioned Agreement.

                                 U.S. BANK NATIONAL ASSOCIATION Authorized
                                 signatory of U.S. Bank National Association,
                                 not in its individual capacity but solely as
                                 Trustee

                                 By:
                                      ------------------------------------------
                                          Authorized Signatory

                                      A-1-6

<PAGE>

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:
                            ___________________________________________
                              Signature by or on behalf of assignor

                            ___________________________________________
                              Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

                                      A-1-7

<PAGE>

                                                                     EXHIBIT A-2

                         FORM OF CLASS[B-_] CERTIFICATE

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES, [AND THE CLASS [B-[_] CERTIFICATES] , AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE
HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED HEREIN.

                  [FOR CLASS B-1, CLASS B-2,CLASS AND CLASS B-3] [UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, ANY CERTIFICATE ISSUED WILL BE REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT WILL BE MADE TO CEDE & CO. ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

                  [FOR CLASS B-1, CLASS B-2,CLASS AND CLASS B-3][EACH BENEFICIAL
OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE OR
INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR INVESTING WITH
ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED FROM TIME TO TIME
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD &
POOR'S, FITCH, INC. OR MOODY'S

                                      A-2-1

<PAGE>

INVESTORS SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST HEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT", AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.]

         [FOR CLASS B-4, CLASS B-5 AND CLASS B-6][THIS CERTIFICATE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
ANY OTHER APPLICABLE JURISDICTION.]

         [FOR CLASS B-4, CLASS B-5 AND CLASS B-6] [THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT
RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR
CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60
OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY

                                      A-2-2

<PAGE>

ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR
UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.]

                                      A-2-3

<PAGE>

<TABLE>
<CAPTION>
<S>           <C>
Certificate No.1                                          Variable Pass-Through Rate

Class [B-_] Subordinate

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date: July 1, 2004                                this Subordinate Certificate as of the Cut-off
                                                          Date: $[_________]

First Distribution Date:                                  Initial Current Principal Amount of this
August 25, 2004                                           Subordinate Certificate as of the Cut-off Date:
                                                          $[---------]

Master Servicer:
Wells Fargo Bank, National Association                    CUSIP: [____________]

Assumed Final Distribution Date:
September 25, 2034
</TABLE>

                          BEAR STEARNS ARM TRUST 2004-6
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-6

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [B-_] Certificates with respect to a Trust Fund
         consisting primarily of a pool of adjustable rate mortgage loans
         secured by first liens on one-to-four family residential properties
         sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments II Inc., the Master Servicer or the Trustee referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any
governmental entity or by Structured Asset Mortgage Investments II Inc., the
Master Servicer or the Trustee or any of their affiliates or any other person.
None of Structured Asset Mortgage Investments II Inc., the Master Servicer or
any of their affiliates will have any obligation with respect to any certificate
or other obligation secured by or payable from payments on the Certificates.

                  This certifies that [_______] is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of adjustable rate mortgage loans secured by
first liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("SAMI
II"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI
II. Wells Fargo Bank, National Association ("Wells Fargo") will act as master
servicer of the Mortgage Loans (the "Master Servicer", which term includes any
successors thereto under the Agreement referred to below). The

                                      A-2-4

<PAGE>

Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among EMC as seller and
company (the "Seller"), SAMI II, as depositor (the "Depositor"), Wells Fargo
Bank, National Association as master servicer and securities administrator (in
such capacity, the "Securities Administrator") and U.S. Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

                  Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial Current Principal Amount of this Certificate is set
forth above. The Current Principal Amount hereof will be reduced to the extent
of distributions allocable to principal hereon and any Realized Losses allocable
hereto.

                  [For Class B-4, Class B-5 and Class][No transfer of this Class
[B-_] Certificate will be made unless such transfer is (i) exempt from the
registration requirements of the Securities act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws
and (ii) made in accordance with Section 5.02 of the Agreement. In the event
that such transfer is to be made the Trustee shall register such transfer if,
(i) made to a transferee who has provided the Trustee with evidence as to its
QIB status; or (ii) (A) the transferor has advised the Trustee in writing that
the Certificate is being transferred to an Institutional Accredited Investor and
(B) prior to such transfer the transferee furnishes to the Trustee an Investment
Letter; provided that if based upon an Opinion of Counsel to the effect that (A)
and (B) above are not sufficient to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable laws, the
Trustee shall as a condition of the registration of any such transfer require
the transferor to furnish such other

                                      A-2-5

<PAGE>

certifications, legal opinions or other information prior to registering the
transfer of this Certificate as shall be set forth in such Opinion of Counsel.]

                  [For Class B-1, Class B-2 and Class B-3] [Each beneficial
owner of this Certificate or any interest herein shall be deemed to have
represented, by virtue of its acquisition or holding of this certificate or
interest herein, that either (i) it is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or section 4975
of the Internal Revenue Code of 1986, as amended ("Plan"), or investing with
assets of a Plan or (ii) it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption 90-30, as amended from time to time
("Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption, including that the certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's, Fitch, Inc. or Moody's Investors Service, Inc., and the certificate is
so rated or (iii) (1) it is an insurance company, (2) the source of funds used
to acquire or hold the certificate or interest therein is an "insurance company
general account", as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.]

         [For Class B-4, Class B-5 and Class B-6] [This Certificate may not be
acquired directly or indirectly by, or on behalf of, an employee benefit plan or
other retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended, unless the transferee certifies or
represents that the proposed transfer and holding of a Certificate and the
servicing, management and operation of the trust and its assets: (i) will not
result in any prohibited transaction which is not covered under an individual or
class prohibited transaction exemption, including, but not limited to,
Prohibited Transaction Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60
or PTE 96-23 and (ii) will not give rise to any additional obligations on the
part of the Depositor, the Securities Administrator, the Master Servicer or the
Trustee, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate or unless the opinion specified in section
5.07 of the Agreement is provided.]

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in thirteen Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and

                                      A-2-6

<PAGE>

the Trustee and the rights of the Certificateholders under the Agreement from
time to time by the parties thereto with the consent of the Holders of
Certificates, evidencing Fractional Undivided Interests aggregating not less
than 51% of the Trust Fund (or in certain cases, Holders of Certificates of
affected Classes evidencing such percentage of the Fractional Undivided
Interests thereof). Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.

                                      A-2-7

<PAGE>

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-2-8

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _________, 20__

                                    U.S. BANK NATIONAL ASSOCIATION Not in its
                                    individual capacity but solely as Trustee

                                    By:
                                         ---------------------------------------
                                             Authorized Signatory

                                           CERTIFICATE OF AUTHENTICATION

                  This is one of the Class [B-_] Certificates referred to in the
within-mentioned Agreement.

                                    U.S. BANK NATIONAL ASSOCIATION Authorized
                                    signatory of U.S. Bank National Association,
                                    not in its individual capacity but solely as
                                    Trustee

                                    By:
                                         ---------------------------------------
                                             Authorized Signatory

                                      A-2-9

<PAGE>

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:

                               _________________________________________________
                                    Signature by or on behalf of assignor

                               _________________________________________________
                                    Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to ______________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

                                     A-2-10

<PAGE>

                                                                     EXHIBIT A-3

                         FORM OF CLASS R-[_] CERTIFICATE

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A
DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL ADDRESSED TO THE DEPOSITOR, TRUSTEE, THE DEPOSITOR, MASTER SERVICER AND
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE
TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER
APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART
OF THE DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
TRUSTEE.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE OBTAINS THE PRIOR WRITTEN CONSENT OF
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC. AND THE SECURITIES ADMINISTRATOR
AND PROVIDES A TRANSFER AFFIDAVIT TO STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC., THE SECURITIES ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS
NOT (A) 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, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B) OR (C) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR
(D) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS
TO

                                      A-3-1

<PAGE>

IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

                                      A-3-2

<PAGE>

<TABLE>
<CAPTION>
Certificate No.1

<S>     <C>
Class R-[_]

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date: July 1, 2004                                this Certificate as of the Cut-off Date:
                                                          $-----------

First Distribution Date:                                  Initial Current Principal Amount of this
August 25, 2004                                           Certificate as of the Cut-off Date: $_________

Master Servicer:
Wells Fargo Bank, National Association                    CUSIP: [_____________]

Assumed Final Distribution Date:
September 25, 2034
</TABLE>

                                           BEAR STEARNS ARM TRUST 2004-6
                                        MORTGAGE PASS-THROUGH CERTIFICATE
                                                   SERIES 2004-6

         evidencing a fractional undivided interest in the distributions
         allocable to the Class R-[_] Certificates with respect to a Trust Fund
         consisting primarily of a pool of adjustable rate mortgage loans
         secured by first liens on one-to-four family residential properties
         sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments II Inc., the Master Servicer or the Trustee referred
to below or any of their affiliates or any other person. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any
governmental entity or by Structured Asset Mortgage Investments II Inc., the
Master Servicer or the Trustee or any of their affiliates or any other person.
None of Structured Asset Mortgage Investments II Inc., the Master Servicer or
any of their affiliates will have any obligation with respect to any certificate
or other obligation secured by or payable from payments on the Certificates.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of the Fractional Undivided Interest evidenced hereby in the
beneficial ownership interest of Certificates of the same Class as this
Certificate in a trust (the "Trust Fund") primarily consisting of adjustable
rate mortgages loans secured by first liens on one- to four- family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments II Inc. ("SAMI II"). The Mortgage Loans were sold by EMC
Mortgage Corporation ("EMC") to SAMI II. Wells Fargo Bank, National Association
("Wells Fargo") will act as master servicer of the Mortgage Loans (the "Master
Servicer", which term includes any successors thereto under the Agreement
referred to below). The Trust Fund was created pursuant to the Pooling and
Servicing Agreement dated as of the Cut-off

                                      A-3-3

<PAGE>

Date specified above (the "Agreement'), among EMC Mortgage Corporation as seller
and company (the "Seller"), SAMI II, as depositor(the "Depositor"), Wells Fargo
Bank, National Association as master servicer and securities administrator (in
such capacity, the "Securities Administrator") and U.S. Bank National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered at
the close of business on the last Business Day of the calendar month preceding
the month of such Distribution Date, an amount equal to the product of the
Fractional Undivided Interest evidenced by this Certificate and the amount (of
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register, or if such Person so requests
by notifying the Trustee in writing as specified in the Agreement by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial Current Principal Amount of this Certificate is set
forth above. The Current Principal Amount hereof will be reduced to the extent
of distributions allocable to principal hereon and any Realized Losses allocable
hereto.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to SAMI II, the Trustee and the Securities Administrator of, among other things,
an affidavit to the effect that it is a United States Person and Permitted
Transferee, (iii) any attempted or purported transfer of any Ownership Interest
in this Certificate in violation of such restrictions will be absolutely null
and void and will vest no rights in the purported transferee, and (iv) if any
person other than a United States Person and a Permitted Transferee acquires any
Ownership Interest in this Certificate in violation of such restrictions, then
the Depositor will have the right, in its sole discretion and without notice to
the Holder of this Certificate, to sell this Certificate to a purchaser selected
by the Depositor, which purchaser may be the Depositor, or any affiliate of the
Depositor, on such terms and conditions as the Depositor may choose.

                                      A-3-4

<PAGE>

                  This certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to title I of the Employee Retirement Income Security Act of
1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transferee provides the Trustee with an opinion of
counsel addressed to the Trustee, the Depositor, Master Servicer and the
Securities Administrator and on which they may rely (which shall not be at the
expense of the Trustee, the Depositor, the Master Servicer or the Securities
Administrator) which is acceptable to the Trustee, that the purchase of this
Certificate will not result in or constitute a nonexempt prohibited transaction,
is permissible under applicable law and will not give rise to any additional
fiduciary obligations on the part of the Depositor, the Master Servicer or the
Trustee.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in thirteen Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

                  This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Fractional Undivided
Interest will be issued to the designated transferee.

                                      A-3-5

<PAGE>

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as requested
by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than the
percentage of the aggregate Outstanding Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however, will
the Trust Fund created by the Agreement continue beyond the expiration of 21
years after the death of certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                      A-3-6

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated: _________, 20__

                                    U.S. BANK NATIONAL ASSOCIATION Not in its
                                    individual capacity but solely as Trustee

                                    By:
                                         ---------------------------------------
                                             Authorized Signatory

                                           CERTIFICATE OF AUTHENTICATION

                  This is one of the Class R-[_] Certificates referred to in the
within-mentioned Agreement.

                                    U.S. BANK NATIONAL ASSOCIATION Authorized
                                    signatory of U.S. Bank National Association,
                                    not in its individual capacity but solely as
                                    Trustee

                                    By:
                                         ---------------------------------------
                                             Authorized Signatory

                                      A-3-7

<PAGE>

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Fractional
Undivided Interest evidenced by the within Mortgage Pass-Through Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

Dated:

                               _________________________________________________
                                    Signature by or on behalf of assignor

                               _________________________________________________
                                    Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

                                      A-3-8

<PAGE>

                                                                       EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                  The Preliminary and Final Mortgage Loan Schedules shall set
forth the following information with respect to each Mortgage Loan:

(a) the loan number;

(b) the Mortgagor's name;

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

(d) the property type;

(e) the Mortgage Rate;

(f) the Servicer;

(g) the Servicing Rate;

(h) the Net Rate;

(i) the original term;

(j) the maturity date;

(k) the stated remaining term to maturity;

(l) the original principal balance;

(m) the first payment date;

(n) the principal and interest payment in effect as of the Cut-off Date;

(o) the unpaid principal balance as of the Cut-off Date;

(p) the Loan-to-Value Ratio at origination;

(q) paid-through date;

(r) the insurer of any Primary Mortgage Insurance Policy;

(s) the Gross Margin, if applicable;

(t) the Maximum Lifetime Mortgage Rate, if applicable;

                                       B-1

<PAGE>

(u) the Minimum Lifetime Mortgage Rate, if applicable;

(v) the Periodic Rate Cap, if applicable;

(w) the number of days delinquent, if any;

(x) which Mortgage Loans adjust after an initial fixed-rate period of three,
five, seven or ten years;

(y) The Loan Group; and

(z) The Prepayment Charge Loans.

Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.

                                       B-2

<PAGE>

                                                                       EXHIBIT C

                                   [RESERVED]

                                       C-1

<PAGE>

                                                                       EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

To:      Wells Fargo Bank, N.A.
         1015 10th Avenue S.E.
         Minneapolis, MN  55414-0031
         Attn:   Inventory Control

RE:      Pooling and Servicing Agreement, dated as of
         July 1, 2004, among SAMI II,
         Wells Fargo Bank,
         National Association, as Master Servicer
          and Securities Administrator,
         EMC Mortgage Corporation, as Seller
         and company and U.S. Bank National Association, as Trustee

         In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned 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:

<TABLE>
<CAPTION>
Reason for Requesting Documents (check one):

<S>               <C>
_____             1.       Mortgage Paid in Full and proceeds have been deposited into the Custodial
                           Account

_____             2.       Foreclosure

_____             3.       Substitution

_____             4.       Other Liquidation

_____             5.       Nonliquidation                              Reason: ____________________________________

_____             6.       California Mortgage Loan paid in full

                                                              By:
                                                                  -------------------------------------------------
                                                                       (authorized signer)

                                                              Issuer:
                                                                       --------------------------------------------
                                                              Address:
                                                                        -------------------------------------------
</TABLE>

                                       D-1

<PAGE>

                                      Date:
                                           -------------------------------------

                                       D-2

<PAGE>

                                                                       EXHIBIT E

FORM OF AFFIDAVIT

                                    Affidavit pursuant to Section 860E(e)(4) of
                                    the Internal Revenue Code of 1986, as
                                    amended, and for other purposes

STATE OF                   )
                           ) ss:
COUNTY OF                  )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ] [the United States], on behalf of which he
makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments II Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates,
Series 2004-6 Class R-I Certificates and Class R-II Certificates (the "Residual
Certificates") for the account of a disqualified organization; (iii) it consents
to any amendment of the Pooling and Servicing Agreement that shall be deemed
necessary by Structured Asset Mortgage Investments II Inc. (upon advice of
counsel) to constitute a reasonable arrangement to ensure that the Residual
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same four representations and (b) as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

                                       E-1

<PAGE>

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.

                      [NAME OF INVESTOR]

                      By:
                            ----------------------------------------------------
                            [Name of Officer]
                            [Title of Officer]
                            [Address of Investor for receipt of distributions]

                            Address of Investor
                            for receipt of tax
                            information:

                                       E-2

<PAGE>

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, and acknowledged to me that he
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 _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

                                       E-3

<PAGE>

                                                                     EXHIBIT F-1

                            FORM OF INVESTMENT LETTER

                                                                          [Date]
[SELLER]

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110

Structured Asset Mortgage Investments II Inc.
383 Madison Avenue
New York, New York 10179

         Re:      Structured Asset Mortgage Investments II Inc., Bear Stearns
                  ARM Trust, Series 2004-6 Mortgage Pass-Through Certificates
                  (the "Certificates"), including the Class B-4, Class B-5 and
                  Class B-6 Certificates (the "Privately Offered Certificates")

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

                  (i)      we understand that the Privately Offered Certificates
                           are not being registered under the Securities Act of
                           1933, as amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Privately Offered
                           Certificates, the trust in which the Certificates
                           represent the entire beneficial ownership interest
                           (the "Trust") or any other matter we deemed relevant
                           to our decision to purchase Privately Offered
                           Certificates has been made available to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Privately Offered Certificates; we are an
                           institutional "accredited investor" as defined in
                           Section 501(a) of Regulation D promulgated under the
                           Act and a sophisticated institutional investor;

                  (iv)     we are acquiring Privately Offered Certificates for
                           our own account, not as nominee for any other person,
                           and not with a present view to any distribution or
                           other disposition of the Privately Offered
                           Certificates;

                                      F-1-1

<PAGE>

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)
                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration requirements of the
                           Act and any applicable state securities or "Blue Sky"
                           laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the
                           Privately Offered Certificates (such disposition or
                           exchange not being currently foreseen or
                           contemplated), we will not transfer or exchange any
                           of the Privately Offered Certificates unless:

                                    (A) (1) the sale is to an Eligible Purchaser
                           (as defined below), (2) if required by the Pooling
                           and Servicing Agreement (as defined below) a letter
                           to substantially the same effect as either this
                           letter or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Trustee) is
                           executed promptly by the purchaser and delivered to
                           the addressees hereof and (3) all offers or
                           solicitations in connection with the sale, whether
                           directly or through any agent acting on our behalf,
                           are limited only to Eligible Purchasers and are not
                           made by means of any form of general solicitation or
                           general advertising whatsoever; and

                                    (B) if the Privately Offered Certificate is
                           not registered under the Act (as to which we
                           acknowledge you have no obligation), the Privately
                           Offered Certificate is sold in a transaction that
                           does not require registration under the Act and any
                           applicable state securities or "blue sky" laws and,
                           if U.S. Bank National Association(the "Trustee") so
                           requests, a satisfactory Opinion of Counsel is
                           furnished to such effect, which Opinion of Counsel
                           shall be an expense of the transferor or the
                           transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate directly or indirectly by, or on
                           behalf of, an employee benefit plan or other
                           retirement arrangement which is subject to Title I of
                           the Employee Retirement Income Security Act of 1974,
                           as amended, or section 4975 of the Internal Revenue
                           Code of 1986, as amended, or (ii) are providing a
                           representation to the effect that the proposed
                           transfer and holding of a Privately Offered
                           Certificate and the servicing, management and
                           operation of the Trust and its assets: (I) will not
                           result in any prohibited transaction which is not
                           covered under an

                                      F-1-2

<PAGE>

                           individual or class prohibited transaction exemption,
                           including, but not limited to, Prohibited Transaction
                           Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE
                           95-60, or PTE 96-23 and (II) will not give rise to
                           any additional obligations on the part of the
                           Depositor, the Master Servicer, the Securities
                           Administrator or the Trustee or (iii) have attached
                           hereto the opinion specified in Section 5.07 of the
                           Agreement.

                  (ix)     We understand that each of the Privately Offered
                           Certificates bears, and will continue to bear, a
                           legend to substantiate the following effect: "THIS
                           CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
                           UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                           "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
                           LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
                           CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
                           REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
                           ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
                           APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
                           UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
                           THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
                           INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                           (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
                           PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
                           HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
                           PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                           RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
                           REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
                           FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
                           THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
                           (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
                           WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
                           PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
                           VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
                           RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
                           THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
                           RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
                           ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
                           PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
                           SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
                           CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
                           LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
                           JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED
                           DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN
                           EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
                           WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
                           RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED,
                           OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
                           AS AMENDED, UNLESS THE PROPOSED TRANSFER AND

                                      F-1-3

<PAGE>

                           HOLDING OF A CERTIFICATE AND THE SERVICING,
                           MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS:
                           (1) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION
                           WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
                           PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
                           LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE")
                           84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23
                           AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
                           OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE MASTER
                           SERVICER, THE SECURITIES ADMINISTRATOR OR THE
                           TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
                           OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE
                           OR UNLESS THE OPINION PROVIDED IN SECTION 5.07 OF THE
                           AGREEMENT IS PROVIDED."

         "Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of July 1, 2004, among
Structured Asset Mortgage Investments II Inc., Wells Fargo Bank, National
Association as master servicer and securities administrator, EMC Mortgage
Corporation, as seller and company and U.S. Bank National Association, as
Trustee (the "Pooling and Servicing Agreement').

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):
                          ---------------------------------

                                      F-1-4

<PAGE>

         IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.

                    Very truly yours,

                    [PURCHASER]

                    By:
                         ------------------------------------------------
                             (Authorized Officer)

                    [By:
                        -------------------------------------------------
                             Attorney-in-fact]

                                      F-1-5

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                  [NAME OF NOMINEE]

                                  By:
                                     ------------------------------
                                           (Authorized Officer)

                                  [By:
                                        ---------------------------
                                           Attorney-in-fact]

                                      F-1-6

<PAGE>

                                                                     EXHIBIT F-2

                  FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

[SELLER]                                                                [Date]

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110

Structured Asset Mortgage Investments II Inc.
383 Madison Avenue
New York, New York 10179

                  Re:      Structured Asset Mortgage Investments II Inc., Bear
                           Stearns ARM Trust, Series 2004-6 Mortgage
                           Pass-Through Certificates, Class B-4, Class B-5,
                           Class B-6 Certificates (the "Privately Offered
                           Certificates")

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:

1.       It owned and/or invested on a discretionary basis eligible securities
         (excluding affiliate's securities, bank deposit notes and CD's, loan
         participations, repurchase agreements, securities owned but subject to
         a repurchase agreement and swaps), as described below:

         Date: ______________, 20__ (must be on or after the close of its most
         recent fiscal year)

         Amount: $ _____________________; and

2. The dollar amount set forth above is:

         a. greater than $100 million and the undersigned is one of the
following entities:

                  (x) |_| an insurance company as defined in Section 2(13) of
the Act 1/; or

--------

1/       A purchase by an insurance company for one or more of its separate
         accounts, as defined by Section 2(a)(37) of the Investment Company Act
         of 1940, which are neither registered nor required to be registered
         thereunder, shall be deemed to be a purchase for the account of such
         insurance company.

                                      F-2-1

<PAGE>

                  (y)               |_| an investment company registered under
                                    the Investment Company Act or any business
                                    development company as defined in Section
                                    2(a)(48) of the Investment Company Act of
                                    1940; or

                  (z)               |_| 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; or

                  (aa)              |_| a plan (i) established and maintained by
                                    a state, its political subdivisions, or any
                                    agency or instrumentality of a state or its
                                    political subdivisions, the laws of which
                                    permit the purchase of securities of this
                                    type, for the benefit of its employees and
                                    (ii) the governing investment guidelines of
                                    which permit the purchase of securities of
                                    this type; or

                  (bb)              |_| a business development company as
                                    defined in Section 202(a)(22) of the
                                    Investment Advisers Act of 1940; or

                  (cc)              |_| a corporation (other than a U.S. bank,
                                    savings and loan association or equivalent
                                    foreign institution), partnership,
                                    Massachusetts or similar business trust, or
                                    an organization described in Section
                                    501(c)(3) of the Internal Revenue Code; or

                  (dd)              |_| a U.S. bank, savings and loan
                                    association or equivalent foreign
                                    institution, which has an audited net worth
                                    of at least $25 million as demonstrated in
                                    its latest annual financial statements; or

                  (ee)              |_| an investment adviser registered under
                                    the Investment Advisers Act; or

         b.                |_| greater than $10 million, and the undersigned is
                           a broker-dealer registered with the SEC; or

         c.                |_| less than $ 10 million, and the undersigned is a
                           broker-dealer registered with the SEC and will only
                           purchase Rule 144A securities in transactions in
                           which it acts as a riskless principal (as defined in
                           Rule 144A); or

         d.                |_| less than $100 million, and the undersigned is an
                           investment company registered under the Investment
                           Company Act of 1940, which, together with one or more
                           registered investment companies having the same or an
                           affiliated investment adviser, owns at least $100
                           million of eligible securities; or

         e.                |_| less than $100 million, and the undersigned is an
                           entity, all the equity owners of which are qualified
                           institutional buyers.

                                      F-2-2

<PAGE>

         The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed 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 in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.

         The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of July 1, 2004, among Structured Asset Mortgage
Investments II Inc., Wells Fargo Bank, National Association, EMC Mortgage
Corporation and U.S. Bank National Association, as Trustee, pursuant to
Certificates were issued.

         The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, or section
4975 of the Internal Revenue Code of 1986, as amended, or (ii) is providing a
representation or an opinion of counsel to the effect that the proposed transfer
and holding of a Privately Offered Certificate and the servicing, management and
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under a prohibited transaction exemption,
including, but not limited to, Prohibited Transaction Exemption ("PTE") 84-14,
PTE 91- 38, PTE 90-1, PTE 95-60, PTE 96-23 and (II) will not give rise to any
additional obligations on the part of the Depositor, the Master Servicer, the
Securities Administrator or the Trustee or (iii) has attached hereto the opinion
specified in Section 5.07 of the Agreement.

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

                                      F-2-3

<PAGE>

Name of Nominee (if any):

IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 20___.

                              Very truly yours,

                              [PURCHASER]

                              By:
                                  -------------------------------------------
                                       (Authorized Officer)

                              [By:
                                   ------------------------------------------
                                       Attorney-in-fact]

                                      F-2-4

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                   [NAME OF NOMINEE]

                                   By:
                                       ----------------------------------------
                                            (Authorized Officer)

                                   [By:
                                        ---------------------------------------
                                            Attorney-in-fact]

                                      F-2-5

<PAGE>

                                                                       EXHIBIT G

                           FORM OF CUSTODIAL AGREEMENT

                  THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of July 30, 2004, by and among U.S.
BANK NATIONAL ASSOCIATION, not individually but solely as trustee under the
Pooling and Servicing Agreement defined below (including its successors under
the Pooling and Servicing Agreement defined below, the "Trustee"), STRUCTURED
ASSET MORTGAGE INVESTMENTS II INC., as depositor (together with any successor in
interest, the "Depositor"), WELLS FARGO BANK, NATIONAL ASSOCIATION, as master
servicer and securities administrator (together with any successor in interest
or successor under the Pooling and Servicing Agreement referred to below, the
"Master Servicer") and WELLS FARGO BANK, NATIONAL ASSOCIATION, as custodian
(together with any successor in interest or any successor appointed hereunder,
the "Custodian").

                                WITNESSETH THAT:
                                 ---------------

                  WHEREAS, the Depositor, the Master Servicer, the Trustee and
EMC Mortgage Corporation (the "Seller") have entered into a Pooling and
Servicing Agreement, dated as of July 1, 2004, relating to the issuance of Bear
Stearns ARM Trust 2004-6, Mortgage Pass-Through Certificates, Series 2004-6 (as
in effect on the date of this agreement, the "Original Pooling and Servicing
Agreement," and as amended and supplemented from time to time, the "Pooling and
Servicing Agreement'); and

                  WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Depositor or the Master Servicer under the Pooling
and Servicing Agreement and the Servicers under their respective Servicing
Agreements, all upon the terms and conditions and subject to the limitations
hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the
Depositor, the Master Servicer and the Custodian hereby agree as follows:

                  I.   DEFINITIONS

                  Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.

                                       G-1

<PAGE>

                  II. CUSTODY OF MORTGAGE DOCUMENTS

                  2.1. Custodian to Act as Agent: Acceptance of Mortgage Files.
         The Custodian, as the duly appointed custodial agent of the Trustee for
         these purposes, acknowledges (subject to any exceptions noted in the
         Initial Certification referred to in Section 2.3(a)), receipt of the
         Mortgage Files relating to the Mortgage Loans identified on the
         schedule attached hereto (the "Mortgage Files") and declares that it
         holds and will hold such Mortgage Files as agent for the Trustee, in
         trust, for the use and benefit of all present and future
         Certificateholders.

                  2.2. Recordation of Assignments. If any Mortgage File includes
         one or more assignments of Mortgage to the Trustee in a state which is
         specifically excluded from the Opinion of Counsel delivered by the
         Seller to the Trustee and the Custodian pursuant to the provisions of
         Section 2.01 of the Pooling and Servicing Agreement, each such
         assignment shall be delivered by the Custodian to the Depositor for the
         purpose of recording it in the appropriate public office for real
         property records, and the Depositor, at no expense to the Custodian,
         shall promptly cause to be recorded in the appropriate public office
         for real property records each such assignment of Mortgage and, upon
         receipt thereof from such public office, shall return each such
         assignment of Mortgage to the Custodian.

                  2.3. Review of Mortgage Files.

                  (a) On or prior to the Closing Date, in accordance with
         Section 2.02 of the Pooling and Servicing Agreement, the Custodian
         shall deliver to the Trustee an Initial Certification in the form
         annexed hereto as Exhibit One evidencing receipt (subject to any
         exceptions noted therein) of a Mortgage File for each of the Mortgage
         Loans listed on the Schedule attached hereto (the "Mortgage Loan
         Schedule").

                  (b) Within 90 days of the Closing Date, the Custodian agrees,
         for the benefit of Certificateholders, to review, in accordance with
         the provisions of Section 2.02 of the Pooling and Servicing Agreement,
         each such document, and shall deliver to the Depositor and the Trustee
         an Interim Certification in the form annexed hereto as Exhibit Two to
         the effect that all such documents have been executed and received and
         that such documents relate to the Mortgage Loans identified on the
         Mortgage Loan Schedule, except for any exceptions listed on Schedule A
         attached to such Interim Certification. The Custodian shall be under no
         duty or obligation to inspect, review or examine said documents,
         instruments, certificates or other papers to determine that the same
         are genuine, enforceable, or appropriate for the represented purpose or
         that they have actually been recorded or that they are other than what
         they purport to be on their face.

                  (c) Not later than 180 days after the Closing Date, the
         Custodian shall review the Mortgage Files as provided in Section 2.02
         of the Pooling and Servicing Agreement and deliver to the Depositor and
         the Trustee a Final Certification in the form annexed hereto as Exhibit
         Three evidencing the completeness of the Mortgage Files.

                  (d) In reviewing the Mortgage Files as provided herein and in
         the Pooling and Servicing Agreement, the Custodian shall make no
         representation as to and shall not be

                                       G-2

<PAGE>

         responsible to verify (i) the validity, legality, enforceability, due
         authorization, recordability, sufficiency or genuineness of any of the
         documents included in any Mortgage File or (ii) the collectibility,
         insurability, effectiveness or suitability of any of the documents in
         any Mortgage File.

         Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.

                  2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor as set forth in the Pooling and Servicing
Agreement with respect to a Mortgage Loan relating to a Mortgage File, the
Custodian shall give prompt written notice to the Depositor, the related
Servicer and the Trustee.

                  2.5. Custodian to Cooperate: Release of Mortgage Files. Upon
receipt of written notice from the Trustee that the Seller has repurchased a
Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement, and
that the purchase price therefore has been deposited in the Master Servicer
Collection Account or the Distribution Account, then the Custodian agrees to
promptly release to the Seller the related Mortgage File.

                  Upon the Custodian's receipt of a request for release (a
"Request for Release") substantially in the form of Exhibit D to the Pooling and
Servicing Agreement signed by a Servicing Officer of the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the related Servicer the related Mortgage File.
The Depositor shall deliver to the Custodian and the Custodian agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Substitute Mortgage Loan.

                  From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy, the related Servicer (or if the Servicer does not,
the Master Servicer) shall deliver to the Custodian a Request for Release signed
by a Servicing Officer requesting that possession of all of the Mortgage File be
released to the related Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the Insurance Policies.
Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File to
the related Servicer. The related Servicer shall cause each Mortgage File or any
document therein so released to be returned to the Custodian when the need
therefore by the related Servicer no longer exists, unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document has 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 either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.

                                       G-3

<PAGE>

                  At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be followed by an assignment of mortgage, without recourse, representation or
warranty from the Trustee to the Seller and the related Mortgage Note shall be
endorsed without recourse by the Trustee and be returned to the Seller. In
connection with any Request for Release of a Mortgage File because of the
payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the related Servicer.

                  2.6. Assumption Agreements. In the event that any assumption
agreement, substitution of liability agreement or sale of servicing agreement is
entered into with respect to any Mortgage Loan subject to this Agreement in
accordance with the terms and provisions of the Pooling and Servicing Agreement,
the Master Servicer, to the extent provided in the related Servicing Agreement,
shall cause the related Servicer to notify the Custodian that such assumption or
substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution agreement, which shall be added to
the related Mortgage File and, for all purposes, shall be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting parts thereof.

                  III. CONCERNING THE CUSTODIAN

                  3.1. Custodian as Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and custodial agent of the Trustee and has no instructions to hold
any Mortgage Note or Mortgage for the benefit of any person other than the
Trustee and the Certificateholders and undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement and in the
Pooling and Servicing Agreement. Except upon compliance with the provisions of
Section 2.5 of this Agreement, no Mortgage Note, Mortgage or Mortgage File shall
be delivered by the Custodian to the Depositor, the Servicers or the Master
Servicer or otherwise released from the possession of the Custodian.

                  3.2. Reserved.

                  3.3. Custodian May Own Certificates. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.

                  3.4. Master Servicer to Pay Custodian's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the

                                       G-4

<PAGE>

reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ), except any such expense, disbursement
or advance as may arise from its negligence or bad faith or to the extent that
such cost or expense is indemnified by the Depositor pursuant to the Pooling and
Servicing Agreement.

                  3.5. Custodian May Resign Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such written notice of resignation, the Trustee shall
either take custody of the Mortgage Files itself and give prompt written notice
thereof to the Depositor, the Master Servicer and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such written notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.

                  The Trustee may remove the Custodian at any time with the
consent of the Master Servicer. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority, shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicer or the Depositor.

                  Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Depositor
and the Master Servicer.

                  3.6. Merger or Consolidation of Custodian. Any Person into
which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
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.

                  3.7. Representations of the Custodian. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.

                                       G-5

<PAGE>

                  IV. MISCELLANEOUS PROVISIONS

                  4.1. Notices. All notices, requests, consents and demands and
other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.

                  4.2. Amendments. No modification or amendment of or supplement
to this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and neither the Depositor, the Master Servicer nor
the Trustee shall enter into any amendment hereof except as permitted by the
Pooling and Servicing Agreement. The Trustee shall give prompt notice to the
Custodian of any amendment or supplement to the Pooling and Servicing Agreement
and furnish the Custodian with written copies thereof.

                  4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

                  4.4. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Depositor and at the Trust's expense, but
only upon direction accompanied by an Opinion of Counsel reasonably satisfactory
to the Depositor to the effect that the failure to effect such recordation is
likely to materially and adversely affect the interests of the
Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  4.5. 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.

                                       G-6

<PAGE>

                  IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.

Address:                          U.S. BANK NATIONAL ASSOCIATION,
                                  not individually but solely as Trustee
One Federal Street
3rd Floor
Boston, Massachusetts 02110       By:
                                  Name: Vaneta I. Bernard
Attention:                        Title:   Vice President
Telecopy:
Confirmation:
Address:                          STRUCTURED ASSET MORTGAGE
                                  INVESTMENTS II INC.
383 Madison Avenue
New York, New York 10179
                                  By:
                                  Name:    Baron Silverstein
                                  Title:   Vice President

Address:                          WELLS FARGO BANK,
                                  NATIONAL ASSOCIATION, as Master
9062 Old Annapolis Road           Servicer
Columbia, Maryland 21045

                                  By:
                                  Name:     Stacey Taylor
                                  Title:   Assistant Vice President

Address:                          WELLS FARGO BANK,
                                  NATIONAL ASSOCIATION, as Custodian
9062 Old Annapolis Road
Columbia, Maryland 21045          By:
                                  Name:    Stacey Taylor
                                  Title:   Assistant Vice President

                                       G-7

<PAGE>

STATE OF MASSACHUSETTS     )
                                   )ss.:
COUNTY OF BOSTON           )

                  On the 30th day of July 2004 before me, a notary public in and
for said State, personally appeared Vaneta I. Bernard, known to me to be a Vice
President of U.S. Bank National Association, a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ____________________________
                                                   Notary Public

[SEAL]

                                       G-8

<PAGE>

STATE OF MARYLAND              )
                                    ) ss.:
COUNTY OF HOWARD               )

                  On the 30th day of July 2004 before me, a notary public in and
for said State, personally appeared Stacey Taylor, known to me to be an
Assistant Vice President of Wells Fargo Bank, National Association, a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said national banking association,
and acknowledged to me that such national banking association executed the
within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ____________________________
                                                   Notary Public

[SEAL]

                                       G-9

<PAGE>

STATE OF NEW YORK              )
                                    )ss.:
COUNTY OF NEW YORK             )

                  On the 30th day of July 2004 before me, a notary public in and
for said State, personally appeared Baron Silverstein, known to me to be a Vice
President of Structured Asset Mortgage Investments II Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ____________________________
                                                   Notary Public

[SEAL]

                                      G-10

<PAGE>

STATE OF MARYLAND              )
                                    )ss.:
 COUNTY OF HOWARD              )

                  On the 30th day of July 2004 before me, a notary public in and
for said State, personally appeared Stacey Taylor, known to me to be an
Assistant Vice President of Wells Fargo Bank, National Association, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ____________________________
                                                   Notary Public

[SEAL]

                                      G-11

<PAGE>

                                  EXHIBIT ONE

                    FORM OF CUSTODIAN INITIAL CERTIFICATION

                                  July __, 2004

U.S. Bank National Association Structured Asset Mortgage Investments II Inc. One
Federal Street, 3rd Floor 383 Madison Avenue Boston, Massachusetts 02110 New
York, New York 10179

Attention: Structured Asset Mortgage Investments II Inc.
Bear Stearns ARM Trust 2004-6, Mortgage Pass-Through Certificates, Series 2004-6

              Re: Custodial Agreement, dated as of July 30, 2004, by and
                  among U.S. Bank National Association, Structured Asset
                  Mortgage Investments II Inc. and Wells Fargo Bank , National
                  Association relating to Bear Stearns ARM Trust 2004-6,
                  Mortgage Pass-Through Certificates, Series 2004-6

Ladies and Gentlemen:

                  In accordance with Section 2.3(a) of the above-captioned
Custodial Agreement and, subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                                             WELLS FARGO BANK, NATIONAL
                                             ASSOCIATION

                                             By:
                                                --------------------------------
                                             Name:
                                             Title:

                                      G-12

<PAGE>

                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                               ___________, 20__

U.S. Bank National Association Structured Asset Mortgage Investments II Inc. One
Federal Street, 3rd Floor 383 Madison Avenue Boston, Massachusetts 02110 New
York, New York 10179

Attention:  Structured Asset Mortgage Investments II Inc.
Bear Stearns ARM Trust 2004-6, Mortgage Pass-Through Certificates, Series 2004-6

              Re:   Custodial Agreement, dated as of July 30, 2004, by and among
                    U.S. Bank National Association, Structured Asset
                    Mortgage Investments II Inc. and Wells Fargo Bank ,
                    National Association relating to Bear Stearns ARM Trust
                    2004-6, Mortgage Pass-Through Certificates, Series
                    2004-6

Ladies and Gentlemen:

                  In accordance with Section 2.3(b) of the above-captioned
Custodial Agreement and, subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                              WELLS FARGO BANK, NATIONAL
                              ASSOCIATION

                              By:
                                 ---------------------------------------------
                              Name:
                                   -------------------------------------------
                              Title:
                                    ------------------------------------------

                                      G-13

<PAGE>

                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                                                  _______, 20__

U.S. Bank National Association Structured Asset Mortgage Investments II Inc. One
Federal Street, 3rd Floor 383 Madison Avenue Boston, Massachusetts 02110 New
York, New York 10179

Attention: Structured Asset Mortgage Investments II Inc.
Bear Stearns ARM Trust 2004-6, Mortgage Pass-Through Certificates, Series 2004-6

               Re: Custodial Agreement, dated as of July 30, 2004, by and among
                   U.S. Bank National Association, Structured Asset
                   Mortgage Investments II Inc. and Wells Fargo Bank ,
                   National Association relating to Bear Stearns ARM Trust
                   2004-6, Mortgage Pass-Through Certificates, Series
                   2004-6

Ladies and Gentlemen:

                  In accordance with Section 2.3(c) of the above-captioned
Custodial Agreement and, subject to Section 2.02(b) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement
or in the Pooling and Servicing Agreement, as applicable.

                               WELLS FARGO BANK, NATIONAL ASSOCIATION

                               By:
                                  --------------------------------------------
                               Name:
                                    ------------------------------------------
                               Title:
                                     -----------------------------------------

                                      G-14

<PAGE>

                                                                     EXHIBIT H-1

                               SERVICING AGREEMENT

                                   COUNTRYWIDE
                             [provided upon request]

                                      H-1-1

<PAGE>

                                   EXHIBIT H-2

                                    EVERHOME
                             [provided upon request]

                                      H-2-1

<PAGE>

                                                                     EXHIBIT H-3

                                  NATIONAL CITY
                             [provided upon request]

                                      H-3-1

<PAGE>

                                                                       EXHIBIT I

                              ASSIGNMENT AGREEMENTS

                             [provided upon request]

                                       I-1

<PAGE>

                                                                       EXHIBIT J

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 30, 2004,
as amended and supplemented by any and all amendments hereto (collectively, the
"Agreement"), by and between EMC MORTGAGE CORPORATION, a Delaware corporation
(the "Mortgage Loan Seller") and STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
a Delaware corporation (the "Purchaser").

                  Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties, an interest in shares issued by a
cooperative apartment corporation and the related proprietary lease and
individual condominium units (collectively, the "Mortgage Loans") as described
herein. The Purchaser intends to deposit the Mortgage Loans into a trust fund
(the "Trust Fund") and create Bear Stearns ARM Trust 2004-6, Mortgage
Pass-Through Certificates, Series 2004-6 (the "Certificates"), under a pooling
and servicing agreement, to be dated as of July 1, 2004 (the "Pooling and
Servicing Agreement"), among the Purchaser, as depositor, Wells Fargo Bank,
National Association, as master servicer and securities administrator, U.S. Bank
National Association, as trustee (the "Trustee") and EMC Mortgage Corporation,
as seller and company.

                  The Purchaser has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Number
333-115122) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "Securities Act"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "Public Offering"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus," respectively. The "Prospectus Supplement" shall mean that
supplement, dated July 28, 2004, to the Prospectus, dated May 14, 2004, relating
to certain classes of the Certificates. With respect to the Public Offering of
certain classes of the Certificates, the Purchaser and Bear, Stearns & Co. Inc.
("Bear Stearns") have entered into a terms agreement dated as of July 28, 2004
to an underwriting agreement dated July 29, 2003, between the Purchaser and Bear
Stearns (collectively, the "Underwriting Agreement").

                  Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:

                                       J-1

<PAGE>

                  SECTION 1. Definitions. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:

                  Acquisition Price: Cash in an amount equal to $______ (plus
$______ in accrued interest) 2/.

                  Bear Stearns: Bear, Stearns & Co. Inc.

                  Closing Date: July 30, 2004.

                  Cut-off Date: July 1, 2004.

                  Cut-off Date Balance: $740,955,084.

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

                  Due Date: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due if such due date is the first day of
a month and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing Agreement.

                  Master Servicer: Wells Fargo Bank, National Association.

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

                  MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.

                  Moody's: Moody's Investors Service, Inc., or its successors in
interest.

                  Mortgage: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.

                  Mortgage File: The items referred to in Exhibit 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.

                  Mortgage Interest Rate: The annual rate of interest borne by a
Mortgage Note as stated therein.

                  Mortgagor: The obligor(s) on a Mortgage Note.

----------
   2/Please contact Bear, Stearns & Co. Inc. for Purchase Price.

                                       J-2

<PAGE>

                  Net Rate: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate and the Lender-Paid PMI Rate
(if applicable).

                  Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.

                  Person: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

                  Purchase Price: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement or Article II of the Pooling and
Servicing Agreement, an amount equal to the sum of (i)(a) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the related Mortgaged Property was acquired with respect thereto, 100% of
the Outstanding Principal Balance at the date of the acquisition), plus (b)
accrued but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase, plus (c) any unreimbursed Monthly Advances and servicing advances
payable to the Servicer of the Mortgage Loan and (ii) any costs and damages (if
any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.

                  Rating Agencies: Standard & Poor's and Moody's, each a "Rating
Agency."

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

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

                  Servicing Agreements: Shall have the meaning assigned to such
term in the Pooling and Servicing Agreement.

                  Standard & Poor's: Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. or its successors in interest.

                  Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.

                  Value: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.

                                       J-3

<PAGE>

                  SECTION 2. Purchase and Sale of the Mortgage Loans and Related
Rights. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.

                  (b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.

                  (c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.

                  (d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the Servicing Agreements (other than its right to enforce the
representations and warranties set forth therein).

                  SECTION 3. Mortgage Loan Schedules. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "Preliminary Mortgage Loan Schedule") setting forth
the information listed on Exhibit 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "Final
Mortgage Loan Schedule") setting forth the information listed on Exhibit 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "Amendment"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.

                  SECTION  4.  Mortgage Loan Transfer.

                  (a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest due on or before the Cut-off Date but received
after the Cut-off Date. The Mortgage Loan Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereon, other than scheduled principal and interest due after
the Cut-off Date but received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.

                                       J-4

<PAGE>

                  (b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "Mortgage File Delivery Date"), the
items of each Mortgage File, provided, however, that in lieu of the foregoing,
the Mortgage Loan Seller may deliver the following documents, under the
circumstances set forth below: (w) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Mortgage Loan Seller in time to permit their delivery as specified above, the
Mortgage Loan Seller may deliver a true copy thereof with a certification by the
Mortgage Loan Seller, on the face of such copy, substantially as follows:
"Certified to be a true and correct copy of the original, which has been
transmitted for recording"; (x) in lieu of the Security Instrument, assignments
to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Mortgage Loan Seller to such effect) the Mortgage Loan
Seller may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
5, the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; and (z) the Mortgage Loan Seller shall not be required
to deliver intervening assignments or Mortgage Note endorsements between the
related Underlying Seller and the Mortgage Loan Seller, between the Mortgage
Loan Seller and the Depositor, and between the Depositor and the Trustee; and
provided further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Mortgage Loan Seller, in lieu of delivering the above documents, may deliver to
the Trustee a certification by the Mortgage Loan Seller or the Master Servicer
to such effect and shall deposit all amounts paid in respect of such Mortgage
Loans in the Master Servicer Collection Account on the Closing Date. The
Mortgage Loan Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
or such certified copies to the Trustee promptly after they are received. The
Mortgage Loan Seller shall cause the Mortgage and intervening assignments, if
any, and the assignment of the Security Instrument to be recorded not later than
180 days after the Closing Date, unless such assignment is not required to be
recorded under the terms set forth in Section 6(a) hereof.

                  (c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the Purchaser
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in

                                       J-5

<PAGE>

connection with such Mortgage Loans. The Mortgage Loan Seller further agrees
that it will not, and will not permit any Servicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of the Pooling
and Servicing Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Pooling and Servicing Agreement.

                  (d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing will
ultimately be assigned to U.S. Bank National Association, as Trustee for the
Certificateholders, on the date hereof.

                  SECTION  5.  Examination of Mortgage Files.

                  (a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Pooling and Servicing Agreement. In addition, upon request of the Purchaser,
the Mortgage Loan Seller agrees to provide to the Purchaser, Bear Stearns and to
any investors or prospective investors in the Certificates information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser, Bear Stearns and to such investors or prospective investors
(which may be at the offices of the Mortgage Loan Seller and/or the Mortgage
Loan Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Stearns and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Stearns and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.

                  (b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Custodian, on behalf of the Trustee, for the benefit of the
Certificateholders, will acknowledge receipt of each Mortgage Loan, by delivery
to the Mortgage Loan Seller, the Purchaser and the Trustee of an initial
certification in the form attached as Exhibit One to the Custodial Agreement.

                  (c) Pursuant to the Pooling and Servicing Agreement, within 90
days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian
thereof), the Trustee will review or shall cause the Custodian to review items
of the Mortgage Files as set forth on Exhibit 1 and will deliver to the Mortgage
Loan Seller, the Purchaser and the Trustee an interim certification
substantially in the form of Exhibit Two to the Custodial Agreement. If the
Trustee or Custodian, as its agent, finds any document listed on Exhibit 1 not
to have been executed or received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in the Final Mortgage Loan Schedule or to appear
defective on its face (a "Material Defect"), the Trustee or the Custodian, as
its agent, shall promptly notify the Mortgage Loan Seller of such

                                       J-6

<PAGE>

Material Defect. The Mortgage Loan Seller shall correct or cure any such
Material Defect within 90 days from the date of notice from the Trustee or the
Custodian, as its agent, of the Material Defect and if the Mortgage Loan Seller
fails to correct or cure such Material Defect within such period and such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Mortgage Loan Seller will, in accordance with the
terms of the Pooling and Servicing Agreement, within 90 days of the date of
notice, provide the Trustee with a Substitute Mortgage Loan (if within two years
of the Closing Date) or purchase the related Mortgage Loan at the applicable
Purchase Price; provided that, if such defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure, repurchase or substitution must occur within 90 days from
the date such breach was discovered; provided, however, that if such defect
relates solely to the inability of the Mortgage Loan Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy because the originals of such documents, or a certified copy, have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.

                  (d) Pursuant to the Pooling and Servicing Agreement, within
180 days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian thereof)
the Trustee will review or cause the Custodian to review items of the Mortgage
Files as set forth on Exhibit 1 and will deliver to the Mortgage Loan Seller,
the Purchaser and the Trustee a final certification substantially in the form of
Exhibit Three to the Custodial Agreement. If the Trustee or Custodian, as its
agent, finds a Material Defect, the Trustee or the Custodian, as its agent,
shall promptly notify the Mortgage Loan Seller of such Material Defect. The
Mortgage Loan Seller shall correct or cure any such Material Defect within 90
days from the date of notice from the Trustee or the Custodian, as its agent, of
the Material Defect and if the Mortgage Loan Seller fails to correct or cure
such Material Defect within such period and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Mortgage Loan Seller will, in accordance with the terms of the Pooling and
Servicing Agreement, within 90 days of the date of notice, provide the Trustee
with a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the applicable Purchase Price; provided
that, if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
repurchase or substitution must occur within 90 days from the date such breach
was discovered; provided, however, that if such defect relates solely to the
inability of the Mortgage Loan Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Mortgage Loan Seller shall not be required to
purchase such Mortgage Loan if the Mortgage Loan Seller delivers such original
documents or certified copy promptly upon receipt, but

                                       J-7

<PAGE>

in no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Mortgage Loan Seller cannot
deliver such original or copy of any document submitted for recording to the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage Loan
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Trustee or the Custodian, as
its agent, shall be effected by the Mortgage Loan Seller within thirty days of
its receipt of the original recorded document.

                  (e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Pooling and Servicing Agreement.
At the time of any purchase or substitution, the Trustee in accordance with the
terms of the Pooling and Servicing Agreement shall (i) assign to the Mortgage
Loan Seller and cause the Custodian to release the documents (including, but not
limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File)
in the possession of the Custodian relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Mortgage Loan Seller
title to such Deleted Mortgage Loan.

                  SECTION  6.  Recordation of Assignments of Mortgage.

                  (a) The Mortgage Loan Seller shall cause each assignment of
the Security Instrument from the Mortgage Loan Seller to the Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agencies or an Opinion of Counsel has
been provided to the Trustee (with a copy to the Custodian) which states that
the recordation of such assignments is not necessary to protect the interests of
the Certificateholders in the related Mortgage Loans or (b) MERS is identified
on the Mortgage or a properly recorded assignment of the Mortgage, as the
Mortgagee of record solely as nominee for the Mortgage Loan Seller and its
successors and assigns; provided, however, notwithstanding the foregoing, each
assignment shall be submitted for recording by the Mortgage Loan Seller in the
manner described above, at no expense to the Trust or Trustee, upon the earliest
to occur of (i) reasonable direction by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust, (ii)
the occurrence of a Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 of the Pooling
and Servicing Agreement.

                  While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee a certified copy of such Mortgage or assignment. All customary recording
fees and reasonable expenses relating to the recordation of the assignments of
mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be
borne by the Mortgage Loan Seller.

                  (b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be

                                       J-8

<PAGE>

deemed a pledge of the Mortgage Loans by the Mortgage Loan Seller to the
Purchaser to secure a debt or other obligation of the Mortgage Loan Seller.
However, in the event that, notwithstanding the intent of the parties, the
Mortgage Loans are held by a court to continue to be property of the Mortgage
Loan Seller, then (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the applicable Uniform
Commercial Code; (b) the transfer of the Mortgage Loans provided for herein
shall be deemed to be a grant by the Mortgage Loan Seller to the Purchaser of a
security interest in all of the Mortgage Loan Seller's right, title and interest
in and to the Mortgage Loans and all amounts payable to the holders of the
Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, to the extent the Purchaser would otherwise be
entitled to own such Mortgage Loans and proceeds pursuant to Section 4 hereof,
including all amounts, other than investment earnings, from time to time held or
invested in any accounts created pursuant to the Pooling and Servicing
Agreement, whether in the form of cash, instruments, securities or other
property; (c) the possession by the Purchaser or the Trustee of Mortgage Notes
and such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-313 (or comparable provision) of the applicable Uniform Commercial Code; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to any provision hereof or
pursuant to the Pooling and Servicing Agreement shall also be deemed to be an
assignment of any security interest created hereby. The Mortgage Loan Seller and
the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be reasonably necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, 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
Pooling and Servicing Agreement.

                  SECTION 7. Representations and Warranties of Mortgage Loan
Seller Concerning the Mortgage Loans. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:

                  (i) the information set forth in the Mortgage Loan Schedule
         hereto is true and correct in all material respects and the information
         provided to the Rating Agencies, including the Mortgage Loan level
         detail, is true and correct according to the Rating Agency
         requirements;

                  (ii) immediately prior to the transfer to the Purchaser, the
         Mortgage Loan Seller was the sole owner of beneficial title and holder
         of each Mortgage and Mortgage Note relating to the Mortgage Loans and
         is conveying the same free and clear of any and all liens, claims,
         encumbrances, participation interests, equities, pledges, charges or
         security interests of any nature and the Mortgage Loan Seller has full
         right and authority to sell or assign the same pursuant to this
         Agreement;

                                       J-9

<PAGE>

                  (iii) Each Mortgage Loan at the time it was made complied in
         all material respects with all applicable laws and regulations,
         including, without limitation, usury, equal credit opportunity,
         disclosure and recording laws and all predatory lending laws; and each
         Mortgage Loan has been serviced in all material respects in accordance
         with all applicable laws and regulations, including, without
         limitation, usury, equal credit opportunity, disclosure and recording
         laws and all predatory lending laws and the terms of the related
         Mortgage Note, the Mortgage and other loan documents;

                  (iv) there is no monetary default existing under any Mortgage
         or the related Mortgage Note and there is no material event which, with
         the passage of time or with notice and the expiration of any grace or
         cure period, would constitute a default, breach or event of
         acceleration; and neither the Mortgage Loan Seller, any of its
         affiliates nor any servicer of any related Mortgage Loan has taken any
         action to waive any default, breach or event of acceleration; no
         foreclosure action is threatened or has been commenced with respect to
         the Mortgage Loan;

                  (v) the terms of the Mortgage Note and the Mortgage have not
         been impaired, waived, altered or modified in any respect, except by
         written instruments, (i) if required by law in the jurisdiction where
         the Mortgaged Property is located, or (ii) to protect the interests of
         the Trustee on behalf of the Certificateholders;

                  (vi) no selection procedure reasonably believed by the
         Mortgage Loan Seller to be adverse to the interests of the
         Certificateholders was utilized in selecting the Mortgage Loans;

                  (vii) each Mortgage is a valid and enforceable first lien on
         the property securing the related Mortgage Note and each Mortgaged
         Property is owned by the Mortgagor in fee simple (except with respect
         to common areas in the case of condominiums, PUDs and de minimis PUDs)
         or by leasehold for a term longer than the term of the related
         Mortgage, subject only to (i) the lien of current real property taxes
         and assessments, (ii) covenants, conditions and restrictions, rights of
         way, easements and other matters of public record as of the date of
         recording of such Mortgage, such exceptions being acceptable to
         mortgage lending institutions generally or specifically reflected in
         the appraisal obtained in connection with the origination of the
         related Mortgage Loan or referred to in the lender's title insurance
         policy delivered to the originator of the related Mortgage Loan and
         (iii) other matters to which like properties are commonly subject which
         do not materially interfere with the benefits of the security intended
         to be provided by such Mortgage;

                  (viii) there is no mechanics' lien or claim for work, labor or
         material affecting the premises subject to any Mortgage which is or may
         be a lien prior to, or equal with, the lien of such Mortgage except
         those which are insured against by the title insurance policy referred
         to in (xiiii) below;

                  (ix) as of the Cut-off Date, to the best of the Mortgage Loan
         Seller's knowledge, there was no delinquent tax or assessment lien
         against the property subject to any Mortgage,

                                      J-10

<PAGE>

         except where such lien was being contested in good faith and a stay had
         been granted against levying on the property;

                  (x) there is no valid offset, defense or counterclaim to any
         Mortgage Note or Mortgage, including the obligation of the Mortgagor to
         pay the unpaid principal and interest on such Mortgage Note;

                  (xi) to the best of the Mortgage Loan Seller's knowledge,
         except to the extent insurance is in place which will cover such
         damage, the physical property subject to any Mortgage is free of
         material damage and is in good repair and there is no proceeding
         pending or threatened for the total or partial condemnation of any
         Mortgaged Property;

                  (xii) to the best of the Mortgage Loan Seller's knowledge, the
         Mortgaged Property and all improvements thereon comply with all
         requirements of any applicable zoning and subdivision laws and
         ordinances;

                  (xiii) a lender's title insurance policy (on an ALTA or CLTA
         form) or binder, or other assurance of title customary in the relevant
         jurisdiction therefor in a form acceptable to Fannie Mae or Freddie
         Mac, was issued on the date that each Mortgage Loan was created by a
         title insurance company which, to the best of the Mortgage Loan
         Seller's knowledge, was qualified to do business in the jurisdiction
         where the related Mortgaged Property is located, insuring the Mortgage
         Loan Seller and its successors and assigns that the Mortgage is a first
         priority lien on the related Mortgaged Property in the original
         principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
         sole insured under such lender's title insurance policy, and such
         policy, binder or assurance is valid and remains in full force and
         effect, and each such policy, binder or assurance shall contain all
         applicable endorsements including a negative amortization endorsement,
         if applicable;

                  (xiv) at the time of origination, each Mortgaged Property was
         the subject of an appraisal which conformed to the underwriting
         requirements of the originator of the Mortgage Loan and, the appraisal
         is in a form acceptable to Fannie Mae or Freddie Mac;

                  (xv) as of the Closing Date, the improvements on each
         Mortgaged Property securing a Mortgage Loan is insured (by an insurer
         which is acceptable to the Mortgage Loan Seller) against loss by fire
         and such hazards as are covered under a standard extended coverage
         endorsement in the locale in which the Mortgaged Property is located,
         in an amount which is not less than the lesser of the maximum insurable
         value of the improvements securing such Mortgage Loan or the
         outstanding principal balance of the Mortgage Loan, but in no event in
         an amount less than an amount that is required to prevent the Mortgagor
         from being deemed to be a co-insurer thereunder; if the improvement on
         the Mortgaged Property is a condominium unit, it is included under the
         coverage afforded by a blanket policy for the condominium project; if
         upon origination of the related Mortgage Loan, the improvements on the
         Mortgaged Property were in an area identified as a federally designated
         flood area, a flood insurance policy is in effect in an amount
         representing coverage not less than the least of (i) the outstanding
         principal balance of the Mortgage Loan, (ii) the restorable cost of
         improvements located on such Mortgaged Property or (iii) the maximum
         coverage available

                                      J-11

<PAGE>

         under federal law; and each Mortgage obligates the Mortgagor thereunder
         to maintain the insurance referred to above at the Mortgagor's cost and
         expense;

                  (xvi) each Mortgage Loan constitutes a "qualified mortgage"
         under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
         1.860G-2(a)(1);

                  (xvii) each Mortgage Loan was originated or funded by (a) a
         savings and loan association, savings bank, commercial bank, credit
         union, insurance company or similar institution which is supervised and
         examined by a federal or state authority (or originated by (i) a
         subsidiary of any of the foregoing institutions which subsidiary is
         actually supervised and examined by applicable regulatory authorities
         or (ii) a mortgage loan correspondent of any of the foregoing and that
         was originated pursuant to the criteria established by any of the
         foregoing) or (b) a mortgagee approved by the Secretary of Housing and
         Urban Development pursuant to sections 203 and 211 of the National
         Housing Act, as amended;

                  (xviii) none of the Mortgage Loans are (a) loans subject to 12
         CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation
         Z, the regulation implementing TILA, which implements the Home
         Ownership and Equity Protection Act of 1994, as amended or (b)
         classified and/or defined as a "high cost home loan" under any federal,
         state or local law, including, but not limited to, the States of
         Georgia or North Carolina;

                  (xix) the information set forth in Schedule A of the
         Prospectus Supplement with respect to the Mortgage Loans is true and
         correct in all material respects;

                  (xx) no Mortgage Loan is a High Cost Loan or Covered Loan, as
         applicable (as such terms are defined in Standard & Poor's LEVELS
         Glossary, Version 5.6 Revised, Appendix E, attached hereto as Exhibit 6
         and no Mortgage Loan originated on or after Appendix October 1, 2002
         through March 6, 2003 is governed by the "Georgia Fair Lending Act";

                  (xxi) each Mortgage Loan was originated in accordance with the
         underwriting guidelines of the related originator;

                  (xxii) each original Mortgage has been recorded or is in the
         process of being recorded in accordance with the requirements of
         Section 2.01 of the Pooling and Servicing Agreement in the appropriate
         jurisdictions wherein such recordation is required to perfect the lien
         thereof for the benefit of the Trust Fund;

                  (xxiii) the related Mortgage File contains each of the
         documents and instruments listed in Section 2.01 of the Pooling and
         Servicing Agreement, subject to any exceptions, substitutions and
         qualifications as are set forth in such Section;

                  (xxiv) the Mortgage Loans are currently being serviced in
         accordance with accepted servicing practices; and

                  (xxv) at the time of origination, each Mortgaged Property was
         the subject of an appraisal which conformed to the underwriting
         requirements of the originator of the

                                      J-12

<PAGE>

         Mortgage Loan, and the appraisal is in a form which was acceptable to
         Fannie Mae or FHLMC at the time of origination.

                  It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.

                  Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. In the
case of any such breach of a representation or warranty set forth in this
Section 7, within 90 days from the date of discovery by the Mortgage Loan
Seller, or the date the Mortgage Loan Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Mortgage Loan Seller will (i) cure such breach in all material respects, (ii)
purchase the affected Mortgage Loan at the applicable Purchase Price or (iii) if
within two years of the Closing Date, substitute a qualifying Substitute
Mortgage Loan in exchange for such Mortgage Loan. The obligations of the
Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute
Mortgage Loan shall constitute the Purchaser's, the Trustee's and the
Certificateholder's sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect to
the Mortgage Loans, except for the obligation of the Mortgage Loan Seller to
indemnify the Purchaser for such breach as set forth in and limited by Section
13 hereof.

                  Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

                  SECTION 8. Representations and Warranties Concerning the
Mortgage Loan Seller. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:

                  (i) the Mortgage Loan Seller (i) is a corporation duly
         organized, validly existing and in good standing under the laws of the
         State of Delaware and (ii) is qualified and in good standing to do
         business in each jurisdiction where such qualification is necessary,
         except where the failure so to qualify would not reasonably be expected
         to have a material adverse effect on the Mortgage Loan Seller's
         business as presently conducted or on the Mortgage Loan Sellers ability
         to enter into this Agreement and to consummate the transactions
         contemplated hereby;

                                      J-13

<PAGE>

                  (ii) the Mortgage Loan Seller has full power to own its
         property, to carry on its business as presently conducted and to enter
         into and perform its obligations under this Agreement;

                  (iii) the execution and delivery by the Mortgage Loan Seller
         of this Agreement have been duly authorized by all necessary action on
         the part of the Mortgage Loan Seller; and neither the execution and
         delivery of this Agreement, nor the consummation of the transactions
         herein contemplated, nor compliance with the provisions hereof, will
         conflict with or result in a breach of, or constitute a default under,
         any of the provisions of any law, governmental rule, regulation,
         judgment, decree or order binding on the Mortgage Loan Seller or its
         properties or the charter or by-laws of the Mortgage Loan Seller,
         except those conflicts, breaches or defaults which would not reasonably
         be expected to have a material adverse effect on the Mortgage Loan
         Seller's ability to enter into this Agreement and to consummate the
         transactions contemplated hereby;

                  (iv) the execution, delivery and performance by the Mortgage
         Loan Seller of this Agreement and the consummation of the transactions
         contemplated hereby do not require the consent or approval of, the
         giving of notice to, the registration with, or the taking of any other
         action in respect of, any state, federal or other governmental
         authority or agency, except those consents, approvals, notices,
         registrations or other actions as have already been obtained, given or
         made and, in connection with the recordation of the Mortgages, powers
         of attorney or assignments of Mortgages not yet completed;

                  (v) this Agreement has been duly executed and delivered by the
         Mortgage Loan Seller and, assuming due authorization, execution and
         delivery by the Purchaser, constitutes a valid and binding obligation
         of the Mortgage Loan Seller enforceable against it in accordance with
         its terms (subject to applicable bankruptcy and insolvency laws and
         other similar laws affecting the enforcement of the rights of creditors
         generally);

                  (vi) there are no actions, suits or proceedings pending or, to
         the knowledge of the Mortgage Loan Seller, threatened against the
         Mortgage Loan Seller, before or by any court, administrative agency,
         arbitrator or governmental body (i) with respect to any of the
         transactions contemplated by this Agreement or (ii) with respect to any
         other matter which in the judgment of the Mortgage Loan Seller will be
         determined adversely to the Mortgage Loan Seller and will if determined
         adversely to the Mortgage Loan Seller materially and adversely affect
         the Mortgage Loan Seller's ability to perform its obligations under
         this Agreement; and the Mortgage Loan Seller is not in default with
         respect to any order of any court, administrative agency, arbitrator or
         governmental body so as to materially and adversely affect the
         transactions contemplated by this Agreement; and

                  (vii) the Mortgage Loan Seller's Information (as defined in
         Section 13(a) hereof) does not include any untrue statement of a
         material fact or omit to state a material fact necessary in order to
         make the statements made, in light of the circumstances under which
         they were made, not misleading.

                                      J-14

<PAGE>

                  SECTION 9. Representations and Warranties Concerning the
Purchaser. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:

                  (i) the Purchaser (i) is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware
         and (ii) is qualified and in good standing as a foreign corporation to
         do business in each jurisdiction where such qualification is necessary,
         except where the failure so to qualify would not reasonably be expected
         to have a material adverse effect on the Purchaser's business as
         presently conducted or on the Purchaser's ability to enter into this
         Agreement and to consummate the transactions contemplated hereby;

                  (ii) the Purchaser has full corporate power to own its
         property, to carry on its business as presently conducted and to enter
         into and perform its obligations under this Agreement;

                  (iii) the execution and delivery by the Purchaser of this
         Agreement have been duly authorized by all necessary corporate action
         on the part of the Purchaser; and neither the execution and delivery of
         this Agreement, nor the consummation of the transactions herein
         contemplated, nor compliance with the provisions hereof, will conflict
         with or result in a breach of, or constitute a default under, any of
         the provisions of any law, governmental rule, regulation, judgment,
         decree or order binding on the Purchaser or its properties or the
         articles of incorporation or by-laws of the Purchaser, except those
         conflicts, breaches or defaults which would not reasonably be expected
         to have a material adverse effect on the Purchaser's ability to enter
         into this Agreement and to consummate the transactions contemplated
         hereby;

                  (iv) the execution, delivery and performance by the Purchaser
         of this Agreement and the consummation of the transactions contemplated
         hereby do not require the consent or approval of, the giving of notice
         to, the registration with, or the taking of any other action in respect
         of, any state, federal or other governmental authority or agency,
         except those consents, approvals, notices, registrations or other
         actions as have already been obtained, given or made;

                  (v) this Agreement has been duly executed and delivered by the
         Purchaser and, assuming due authorization, execution and delivery by
         the Mortgage Loan Seller, constitutes a valid and binding obligation of
         the Purchaser enforceable against it in accordance with its terms
         (subject to applicable bankruptcy and insolvency laws and other similar
         laws affecting the enforcement of the rights of creditors generally);

                  (vi) there are no actions, suits or proceedings pending or, to
         the knowledge of the Purchaser, threatened against the Purchaser,
         before or by any court, administrative agency, arbitrator or
         governmental body (i) with respect to any of the transactions
         contemplated by this Agreement or (ii) with respect to any other matter
         which in the judgment of the Purchaser will be determined adversely to
         the Purchaser and will if determined adversely to the Purchaser
         materially and adversely affect the Purchaser's ability to perform its
         obligations under this Agreement; and the Purchaser is not in default
         with respect to any

                                      J-15

<PAGE>

         order of any court, administrative agency, arbitrator or governmental
         body so as to materially and adversely affect the transactions
         contemplated by this Agreement; and

                  (vii) the Purchaser's Information (as defined in Section 13(b)
         hereof) does not include any untrue statement of a material fact or
         omit to state a material fact necessary in order to make the statements
         made, in light of the circumstances under which they were made, not
         misleading.

                  SECTION  10.  Conditions to Closing.

                  (i) The obligations of the Purchaser under this Agreement will
         be subject to the satisfaction, on or prior to the Closing Date, of the
         following conditions:

                                    (1) Each of the obligations of the Mortgage
                  Loan Seller required to be performed at or prior to the
                  Closing Date pursuant to the terms of this Agreement shall
                  have been duly performed and complied with in all material
                  respects; all of the representations and warranties of the
                  Mortgage Loan Seller under this Agreement shall be true and
                  correct as of the date or dates specified in all material
                  respects; and no event shall have occurred which, with notice
                  or the passage of time, would constitute a default under this
                  Agreement, or the Pooling and Servicing Agreement; and the
                  Purchaser shall have received certificates to that effect
                  signed by authorized officers of the Mortgage Loan Seller.

                                    (2) The Purchaser shall have received all of
                  the following closing documents, in such forms as are agreed
                  upon and reasonably acceptable to the Purchaser, duly executed
                  by all signatories (other than the Purchaser) as required
                  pursuant to the respective terms thereof:

                                    (a) If required pursuant to Section 3
                  hereof, the Amendment dated as of the Closing Date and any
                  documents referred to therein;

                                    (b) If required pursuant to Section 3
                  hereof, the Final Mortgage Loan Schedule containing the
                  information set forth on Exhibit 2 hereto, one copy to be
                  attached to each counterpart of the Amendment;

                                    (c) The Pooling and Servicing Agreement,
                  in form and substance reasonably satisfactory to the Trustee
                  and the Purchaser, and all documents required thereby duly
                  executed by all signatories;

                                    (d) A certificate of an officer of the
                  Mortgage Loan Seller dated as of the Closing Date, in
                  a form reasonably acceptable to the Purchaser, and attached
                  thereto the resolutions of the Mortgage Loan Seller
                  authorizing the transactions contemplated by this Agreement,
                  together with copies of the charter and by-laws of the
                  Mortgage Loan Seller;

                                      J-16

<PAGE>

                                    (e) One or more opinions of counsel from the
                  Mortgage Loan Seller's counsel otherwise in form and
                  substance reasonably satisfactory to the Purchaser, the
                  Trustee and each Rating Agency;

                                    (f) A letter from each of the Rating
                 Agencies giving each Class of Certificates set forth
                 on Schedule A the rating set forth on Schedule A; and

                                    (g) Such other documents, certificates
                  (including additional representations and warranties)
                  and opinions as may be reasonably necessary to secure
                  the intended ratings from each Rating Agency for the
                  Certificates.

                           (3) The Certificates to be sold to Bear Stearns
         pursuant to the Underwriting Agreement and the Purchase Agreement shall
         have been issued and sold to Bear Stearns.

                           (4) The Mortgage Loan Seller shall have furnished to
         the Purchaser such other certificates of its officers or others and
         such other documents and opinions of counsel to evidence fulfillment of
         the conditions set forth in this Agreement and the transactions
         contemplated hereby as the Purchaser and its counsel may reasonably
         request.

                  (ii) The obligations of the Mortgage Loan Seller under this
         Agreement shall be subject to the satisfaction, on or prior to the
         Closing Date, of the following conditions:

                           (1) The obligations of the Purchaser required to be
         performed by it on or prior to the Closing Date pursuant to the terms
         of this Agreement shall have been duly performed and complied with in
         all material respects, and all of the representations and warranties of
         the Purchaser under this Agreement shall be true and correct in all
         material respects as of the date hereof and as of the Closing Date, and
         no event shall have occurred which would constitute a breach by it of
         the terms of this Agreement, and the Mortgage Loan Seller shall have
         received a certificate to that effect signed by an authorized officer
         of the Purchaser.

                           (2) The Mortgage Loan Seller shall have received
         copies of all of the following closing documents, in such forms as are
         agreed upon and reasonably acceptable to the Mortgage Loan Seller, duly
         executed by all signatories other than the Mortgage Loan Seller as
         required pursuant to the respective terms thereof:

                                    (a) If required pursuant to Section 3
                           hereof, the Amendment dated as of the Closing Date
                           and any documents referred to therein;

                                    (b) The Pooling and Servicing Agreement, in
                           form and substance reasonably satisfactory to the
                           Mortgage Loan Seller, and all documents required
                           thereby duly executed by all signatories;

                                    (c) A certificate of an officer of the
                           Purchaser dated as of the Closing Date, in a form
                           reasonably acceptable to the Mortgage Loan Seller,
                           and attached

                                      J-17

<PAGE>

         thereto the resolutions of the Purchaser authorizing the transactions
         contemplated by this Agreement and the Pooling and Servicing Agreement,
         together with copies of the Purchaser's articles of incorporation, and
         evidence as to the good standing of the Purchaser dated as of a recent
         date;

                                    (d) One or more opinions of counsel from the
                           Purchaser's counsel in form and substance reasonably
                           satisfactory to the Mortgage Loan Seller;

                                    (e) Such other documents, certificates
                           (including additional representations and warranties)
                           and opinions as may be reasonably necessary to secure
                           the intended rating from each Rating Agency for the
                           Certificates;

                  SECTION 11. Fees and Expenses. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including counsel's fees and
expenses in connection with any "blue sky" and legal investment matters, (v) the
fees and expenses of the Trustee which shall include without limitation the fees
and expenses of the Trustee (and the fees and disbursements of its counsel) with
respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance at
the Closing and (C) review of the Mortgage Loans to be performed by the
Custodian, (vi) the expenses for printing or otherwise reproducing the
Certificates, the Prospectus and the Prospectus Supplement, (vii) the fees and
expenses of each Rating Agency (both initial and ongoing), (viii) the fees and
expenses relating to the preparation and recordation of mortgage assignments
(including intervening assignments, if any and if available, to evidence a
complete chain of title from the originator to the Trustee) from the Mortgage
Loan Seller to the Trustee or the expenses relating to the Opinion of Counsel
referred to in Section 6(a) hereof, as the case may be, and (ix) Mortgage File
due diligence expenses and other out-of-pocket expenses incurred by the
Purchaser in connection with the purchase of the Mortgage Loans and by Bear
Stearns in connection with the sale of the Certificates. The Mortgage Loan
Seller additionally agrees to pay directly to any third party on a timely basis
the fees provided for above which are charged by such third party and which are
billed periodically.

                  SECTION  12.  Accountants' Letters.

                  (i) Deloitte & Touche LLP will review the characteristics of a
         sample of the Mortgage Loans described in the Final Mortgage Loan
         Schedule and will compare those characteristics to the description of
         the Mortgage Loans contained in the Prospectus Supplement under the
         captions "Summary of Prospectus Supplement--The Mortgage Loans" and
         "The Mortgage Pool" and in Schedule A thereto. The Mortgage Loan Seller
         will cooperate with the Purchaser in making available all information
         and taking all steps reasonably necessary to permit such accountants to
         complete the review and to deliver the letters required of them under
         the Underwriting Agreement. Deloitte & Touche LLP will also

                                      J-18

<PAGE>

         confirm certain calculations as set forth under the caption "Yield On
         The Certificates" in the Prospectus Supplement.

                  (ii) To the extent statistical information with respect to the
         Master Servicer's or a Servicer's servicing portfolio is included in
         the Prospectus Supplement under the caption "The Master Servicer and
         the Servicers," a letter from the certified public accountant for the
         Master Servicer and such Servicer or Servicers will be delivered to the
         Purchaser dated the date of the Prospectus Supplement, in the form
         previously agreed to by the Mortgage Loan Seller and the Purchaser,
         with respect to such statistical information.

                  SECTION  13.  Indemnification.

                  (i) The Mortgage Loan Seller shall indemnify and hold harmless
         the Purchaser and its directors, officers and controlling persons (as
         defined in Section 15 of the Securities Act) from and against any loss,
         claim, damage or liability or action in respect thereof, to which they
         or any of them may become subject, under the Securities Act or
         otherwise, insofar as such loss, claim, damage, liability or action
         arises out of, or is based upon (i) any untrue statement of a material
         fact contained in the Mortgage Loan Seller's Information as identified
         in Exhibit 3, the omission to state in the Prospectus Supplement or
         Prospectus (or any amendment thereof or supplement thereto approved by
         the Mortgage Loan Seller and in which additional Mortgage Loan Seller's
         Information is identified), in reliance upon and in conformity with
         Mortgage Loan Seller's Information a material fact required to be
         stated therein or necessary to make the statements therein in light of
         the circumstances in which they were made, not misleading, (ii) any
         representation or warranty assigned or made by the Mortgage Loan Seller
         in Section 7 or Section 8 hereof being, or alleged to be, untrue or
         incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
         its obligations under this Agreement; and the Mortgage Loan Seller
         shall reimburse the Purchaser and each other indemnified party for any
         legal and other expenses reasonably incurred by them in connection with
         investigating or defending or preparing to defend against any such
         loss, claim, damage, liability or action.

         The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.

                  (ii) The Purchaser shall indemnify and hold harmless the
         Mortgage Loan Seller and its respective directors, officers and
         controlling persons (as defined in Section 15 of the Securities Act)
         from and against any loss, claim, damage or liability or action in
         respect thereof, to which they or any of them may become subject, under
         the Securities Act or otherwise, insofar as such loss, claim, damage,
         liability or action arises out of, or is based upon (i) any untrue
         statement of a material fact contained in the Purchaser's Information
         as identified in Exhibit 4, the omission to state in the Prospectus
         Supplement or Prospectus (or any amendment thereof or supplement
         thereto approved by the Purchaser and in which additional Purchaser's
         Information is identified), in reliance upon and in conformity with the
         Purchaser's Information, a material fact required to be stated therein
         or necessary to make the statements therein in light of the
         circumstances in which they were made, not misleading, (ii) any
         representation or warranty made by the Purchaser in Section 9 hereof
         being, or

                                      J-19

<PAGE>

         alleged to be, untrue or incorrect, or (iii) any failure by the
         Purchaser to perform its obligations under this Agreement; and the
         Purchaser shall reimburse the Mortgage Loan Seller, and each other
         indemnified party for any legal and other expenses reasonably incurred
         by them in connection with investigating or defending or preparing to
         defend any such loss, claim, damage, liability or action. The foregoing
         indemnity agreement is in addition to any liability which the Purchaser
         otherwise may have to the Mortgage Loan Seller, or any other such
         indemnified party,

                  (iii) Promptly after receipt by an indemnified party under
         subsection (a) or (b) above of notice of the commencement of any
         action, such indemnified party shall, if a claim in respect thereof is
         to be made against the indemnifying party under such subsection, notify
         each party against whom indemnification is to be sought in writing of
         the commencement thereof (but the failure so to notify an indemnifying
         party shall not relieve it from any liability which it may have under
         this Section 13 except to the extent that it has been prejudiced in any
         material respect by such failure or from any liability which it may
         have otherwise). In case any such action is brought against any
         indemnified party, and it notifies an indemnifying party of the
         commencement thereof, the indemnifying party will be entitled to
         participate therein and, to the extent it may elect by written notice
         delivered to the indemnified party promptly (but, in any event, within
         30 days) after receiving the aforesaid notice from such indemnified
         party, to assume the defense thereof with counsel reasonably
         satisfactory to such indemnified party. Notwithstanding the foregoing,
         the indemnified party or parties shall have the right to employ its or
         their own counsel in any such case, but the fees and expenses of such
         counsel shall be at the expense of such indemnified party or parties
         unless (i) the employment of such counsel shall have been authorized in
         writing by one of the indemnifying parties in connection with the
         defense of such action, (ii) the indemnifying parties shall not have
         employed counsel to have charge of the defense of such action within a
         reasonable time after notice of commencement of the action, or (iii)
         such indemnified party or parties shall have reasonably concluded that
         there is a conflict of interest between itself or themselves and the
         indemnifying party in the conduct of the defense of any claim or that
         the interests of the indemnified party or parties are not substantially
         co-extensive with those of the indemnifying party (in which case the
         indemnifying parties shall not have the right to direct the defense of
         such action on behalf of the indemnified party or parties), in any of
         which events such fees and expenses shall be borne by the indemnifying
         parties (provided, however, that the indemnifying party shall be liable
         only for the fees and expenses of one counsel in addition to one local
         counsel in the jurisdiction involved. Anything in this subsection to
         the contrary notwithstanding, an indemnifying party shall not be liable
         for any settlement or any claim or action effected without its written
         consent; provided, however, that such consent was not unreasonably
         withheld.

                  (iv) If the indemnification provided for in paragraphs (a) and
         (b) of this Section 13 shall for any reason be unavailable to an
         indemnified party in respect of any loss, claim, damage or liability,
         or any action in respect thereof, referred to in Section 13, then the
         indemnifying party shall in lieu of indemnifying the indemnified party
         contribute to the amount paid or payable by such indemnified party as a
         result of such loss, claim, damage or liability, or action in respect
         thereof, in such proportion as shall be appropriate to reflect the
         relative benefits received by the Mortgage Loan Seller on the one hand
         and the Purchaser on

                                      J-20

<PAGE>

         the other from the purchase and sale of the Mortgage Loans, the
         offering of the Certificates and the other transactions contemplated
         hereunder. No person found liable for a fraudulent misrepresentation
         (within the meaning of Section 11(f) of the Securities Act) shall be
         entitled to contribution from any person who is not also found liable
         for such fraudulent misrepresentation.

                  (v) The parties hereto agree that reliance by an indemnified
         party on any publicly available information or any information or
         directions furnished by an indemnifying party shall not constitute
         negligence, bad faith or willful misconduct by such indemnified party.

                  SECTION 14. Notices. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, Mac Arthur Ridge II, 909 Hidden Ridge
Drive, Suite 200, Irving, Texas 75038 (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments II
Inc., 383 Madison Avenue, New York, New York 10179 (Telecopy: (212-272-7206)),
Attention: Baron Silverstein; or to any other address as may hereafter be
furnished by one party to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.

                  SECTION 15. Transfer of Mortgage Loans. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; provided, however, the Purchaser shall
remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and
as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the purchase or
substitution obligations of the Mortgage Loan Seller contained in Sections 5 and
7 hereof.

                  SECTION 16. Termination. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of- pocket expenses incurred by the other in connection with the
transactions contemplated by this Agreement. In the event of a termination
pursuant to clause (a), each party shall be responsible for its own expenses.

                                      J-21

<PAGE>

                  SECTION 17. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, the Mortgage Loan Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.

                  SECTION 18. Severability. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.

                  SECTION 19. Counterparts. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.

                  SECTION 20. Amendment. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.

                  SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, INCLUDING SECTIONS 5-1401 AND 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.

                  SECTION 22. Further Assurances. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.

                  SECTION  23.  Successors and Assigns.

         This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Stearns, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper

                                      J-22

<PAGE>

or any further act or consent on the part of any party hereto. Except as
provided in the two preceding sentences, this Agreement cannot be assigned,
pledged or hypothecated by either party hereto without the written consent of
the other parties to this Agreement and any such assignment or purported
assignment shall be deemed null and void.

                  SECTION 24. The Mortgage Loan Seller. The Mortgage Loan Seller
will keep in full effect all rights as are necessary to perform their respective
obligations under this Agreement.

                  SECTION 25. Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.

                  SECTION 26. No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.

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                                      J-23

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.

EMC MORTGAGE CORPORATION

By:
    --------------------------------------------
Name:    Sue Stepanek
Title:   Executive Vice President

STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC.

By:
    --------------------------------------------
Name: Baron Silverstein
Title:   Vice President

                                      J-24

<PAGE>

                                    EXHIBIT 1
                            CONTENTS OF MORTGAGE FILE

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of the Agreement.

         (a) with respect to each Mortgage Loan:

                  (a) The original Mortgage Note, endorsed without recourse to
         the order of the Trustee and showing an unbroken chain of endorsements
         from the originator thereof to the Person endorsing it to the Trustee,
         or a lost note affidavit together with a copy of the related Mortgage
         Note;

                  (b) The original Mortgage and, if the related Mortgage Loan is
         a MOM Loan, noting the presence of the MIN and language indicating that
         such Mortgage Loan is a MOM Loan, which shall have been recorded (or if
         the original is not available, a copy), with evidence of such recording
         indicated thereon (or if the original is not available, a copy), with
         evidence of such recording indicated thereon (or if the original
         Security Instrument, assignments to the Trustee or intervening
         assignments thereof which have been delivered, are being delivered or
         will, upon receipt of recording information relating to the Security
         Instrument required to be included thereon, be delivered to recording
         offices for recording and have not been returned to the Seller in time
         to permit their recording as specified in Section 2.01(b) of the
         Pooling and Servicing Agreement, shall be in recordable form);

                  (c) unless the Mortgage Loan is a MOM Loan, a certified copy
         of the assignment (which may be in the form of a blanket assignment if
         permitted in the jurisdiction in which the Mortgaged Property is
         located) to "U.S. Bank National Association, as Trustee", with evidence
         of recording with respect to each Mortgage Loan in the name of the
         Trustee thereon (or if (A) the original Security Instrument,
         assignments to the Trustee or intervening assignments thereof which
         have been delivered, are being delivered or will, upon receipt of
         recording information relating to the Security Instrument required to
         be included thereon, be delivered to recording offices for recording
         and have not been returned to the Seller in time to permit their
         delivery as specified in Section 2.01(b) of the Pooling and Servicing
         Agreement, the Seller may deliver a true copy thereof with a
         certification by the Seller, on the face of such copy, substantially as
         follows: "Certified to be a true and correct copy of the original,
         which has been transmitted for recording" or (B) the related Mortgaged
         Property is located in a state other than Maryland and an Opinion of
         Counsel has been provided as set forth in Section 2.01(b) of the
         Pooling and Servicing Agreement, shall be in recordable form);

                  (iv) all intervening assignments of the Security Instrument,
         if applicable and only to the extent available to the Mortgage Loan
         Seller with evidence of recording thereon;

                  (v) the original or a copy of the policy or certificate of
         primary mortgage guaranty insurance, to the extent available, if any;

                                      J-25

<PAGE>

                  (vi) the original policy of title insurance or mortgagee's
         certificate of title insurance or commitment or binder for title
         insurance; and

                  (vii) originals of all modification agreements, if applicable
         and available.

                                      J-26

<PAGE>

                                    EXHIBIT 2

                       MORTGAGE LOAN SCHEDULE INFORMATION

         The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:

(a) the loan number;

(b) the Mortgagor's name;

(c) the city, state and zip code of the Mortgaged Property;

(d) the property type;

(e) the Mortgage Interest Rate;

(f) the Servicing Rate;

(g) the Net Rate;

(h) the original term;

(i) the maturity date;

(j) the stated remaining term to maturity;

(k) the original principal balance;

(1) the first payment date;

(m) the principal and interest payment in effect as of the Cut-off Date;

(n) the unpaid principal balance as of the Cut-off Date;

(o) the Loan-to-Value Ratio at origination;

(p) paid-through date;

(q) the insurer of any Primary Mortgage Insurance Policy;

(r) the Gross Margin, if applicable;

(s) the Maximum Lifetime Mortgage Rate, if applicable;

(t) the Minimum Lifetime Mortgage Rate, if applicable;

                                      J-27

<PAGE>

(u) the Periodic Rate Cap, if applicable;

(v) the number of days delinquent, if any;

(w) which Mortgage Loans adjust after an initial fixed-rate period of three,
five, seven or ten years;

(x) the Loan Group;

(y) the Prepayment Charge Loans; and

(z) the Servicer.

Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.

                                      J-28

<PAGE>

                                    EXHIBIT 3

                       MORTGAGE LOAN SELLER'S INFORMATION

         All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loans,"
"THE MORTGAGE POOL" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."

                                      J-29

<PAGE>

                                    EXHIBIT 4

                             PURCHASER'S INFORMATION

         All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.

                                      J-30

<PAGE>

                                    EXHIBIT 5

                             SCHEDULE OF LOST NOTES

                             Available Upon Request

                                      J-31

<PAGE>

                                    EXHIBIT 6

          Appendix E of the Standard & Poor's Glossary For File Format
                        For LEVELS(R) Version 5.6 Revised

Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.

                                      J-32

<PAGE>

STANDARD & POOR'S
HIGH COST LOAN CATEGORIZATION

<TABLE>
<CAPTION>
Maine         High Rate High Fee Mortgage

State/Jurisdiction                                   Name of Anti-Predatory                  Category under
                                                     Lending Law/Effective Date              Applicable Anti-Predatory
                                                                                             Lending Law

<S>                                               <C>                                        <C>
Arkansas                                          Arkansas Home Loan Protection               High Cost Home Loan
                                                  Act, Ark. Code Ann.ss.ss.23-53-101
                                                  et seq.
                                                  Effective July 16, 2003
Cleveland Heights, OH                             OH Ordinance No. 72-2003                    Covered Loan
                                                  (PSH), Mun. Codess.ss.757.01 et
                                                  seq. Effective June 2, 2003
Colorado                                          Consumer Equity Protection, Colo.           Covered Loan
                                                  Stat. Ann.ss.ss.5-3.5-101 et seq.
                                                  Effective for covered loans offered
                                                  or entered into on or after January
                                                  1, 2003. Other provisions of the
                                                  Act took effect on June 7, 2002
Connecticut                                       Connecticut Abusive Home Loan               High Cost Home Loan
                                                  Lending Practices Act, Conn. Gen.
                                                  Stat.ss.ss.36a-746 et seq.
                                                  Effective October 1, 2001
District of Columbia                              Home Loan Protection Act, D.C.              Covered Loan
                                                  Code ss.ss. 26-1151.01 et seq.
                                                  Effective for loans closed on or
                                                  after January 28, 2003
Florida                                           Fair Lending Act, Fla. Stat. Ann.           High Cost Home Loan
                                                  ss.ss.494.0078 et seq.
                                                  Effective October 2, 2002
Georgia (Oct 1, 2002 - Mar 6, 2003)               Georgia Fair Lending Act, Ga.               High Cost Home Loan
                                                  Code Ann.ss.ss.7-6A-1 et seq.
                                                  Effective October 1, 2002 - March
                                                  6, 2003
Georgia as amended (Mar 7, 2003 - current)        Georgia Fair Lending Act, Ga.               High Cost Home Loan
                                                  Code Ann.ss.ss.7-6A-1 et seq.
                                                  Effective for loans closed on or
                                                  after March 7, 2003
HOEPA Section 32                                  Home Ownership and Equity                   High Cost Loan
                                                  Protection Act of 1994, 15 U.S.C.
                                                  ss. 1639, 12 C.F.R.ss.ss.226.32 and
                                                  226.34 Effective October 1, 1995,
                                                  amendments October 1, 2002

</TABLE>

                                      J-33

<PAGE>

<TABLE>
<CAPTION>
<S>                                              <C>
Illinois                                          High Risk Home Loan Act, Ill.               High Risk Home Loan
                                                  Comp. Stat. tit. 815,ss.ss.137/5 et
                                                  seq. Effective January 1, 2004
                                                  (prior to this date, regulations
                                                  under Residential Mortgage
                                                  License Act effective from May
                                                  14, 2001)
Kansas                                            Consumer Credit Code, Kan. Stat.            High Loan to Value
                                                  Ann.ss.ss.16a-1-101 et seq.                   Consumer Loan and;
                                                  Sections 16a-1-301 and 16a-3-207            High APR Consumer
                                                  became effective April 14, 1999;            Loan
                                                  Section 16a-3-308a became
                                                  effective July 1, 1999
Kentucky                                          2003 KY H.B. 287 - High Cost                High Cost Home Loan
                                                  Home Loan Act, Ky. Rev. Stat.ss.ss.
                                                  360.100 et seq. Effective June 24,
                                                  2003
Maine                                             Truth in Lending, Me. Rev. Stat.            High Rate High Fee
                                                  tit. 9-A, ss.ss. 8-101 et seq.
                                                  Mortgage Effective September
                                                  29, 1995 and as amended from
                                                  time to time
Massachusetts                                     Part 40 and Part 32, 209 C.M.R.             High Cost Home Loan
                                                  ss.ss.32.00 et seq. and 209 C.M.R.
                                                  ss.ss.40.01 et seq. Effective March
                                                  22, 2001 and amended from time
                                                  to time
Nevada                                            Assembly Bill No. 284, Nev. Rev.            Home Loan
                                                  Stat.ss.ss.598D.010 et seq.
                                                  Effective October 1, 2003
New Jersey                                        New Jersey Home Ownership                   High Cost Home Loan
                                                  Security Act of 2002, N.J. Rev.
                                                  Stat.ss.ss.46:10B-22 et seq.
                                                  Effective for loans closed on or
                                                  after November 27, 2003
New York                                          N.Y. Banking Law Article 6-l                High Cost Home Loan
                                                  Effective for applications made on
                                                  or after April 1, 2003
New Mexico                                        Home Loan Protection Act, N.M.              High Cost Home Loan
                                                  Rev. Stat.ss.ss.58-21A-1 et seq.
                                                  Effective as of January 1, 2004;
                                                  Revised as of February 26, 2004
North Carolina                                    Restrictions and Limitations on             High Cost Home Loan
                                                  High Cost Home Loans, N.C. Gen.
                                                  Stat.ss.ss.24-1.1E et seq.
                                                  Effective July 1, 2000;
                                                  amended October 1, 2003
                                                  (adding open-end lines of
                                                  credit)
</TABLE>

                                      J-34

<PAGE>

<TABLE>
<CAPTION>
<S>                                                    <C>
Ohio                                              H.B. 386 (codified in various               Covered Loan
                                                  sections of the Ohio Code), Ohio
                                                  Rev. Code Ann.ss.ss.1349.25 et seq.
                                                  Effective May 24, 2002
Oklahoma                                          Consumer Credit Code (codified in           Subsection 10 Mortgage
                                                  various sections of Title 14A)
                                                  Effective July 1, 2000; amended
                                                  effective January 1, 2004
South Carolina                                    South Carolina High Cost and                High Cost Home Loan
                                                  Consumer Home Loans Act, S.C.
                                                  Code Ann.ss.ss.37-23-10 et seq.
                                                  Effective for loans taken on or
                                                  after January 1, 2004
West Virginia                                     West Virginia Residential                   West Virginia Mortgage
                                                  Mortgage Lender, Broker and                 Loan Act Loan
                                                  Servicer Act, W. Va. Code Ann.
                                                  ss.ss.31-17-1 et seq.
                                                  Effective June 5, 2002

STANDARD & POOR'S
COVERED LOAN CATEGORIZATION

State/Jurisdiction                                 Name of Anti-Predatory                    Category under
                                                   Lending Law/Effective Date                Applicable Anti-Predatory
                                                                                             Lending Law

Georgia (Oct 1, 2002 - Mar 6, 2003)               Georgia Fair Lending Act, Ga.               Covered Loan
                                                  Code Ann.ss.ss.7-6A-1 et seq.
                                                  Effective October 1, 2002 - March
                                                  6, 2003

New Jersey                                        New Jersey Home Ownership                   Covered Home Loan
                                                  Security Act of 2002, N.J. Rev.
                                                  Stat. ss.ss. 46:10B-22 et seq.
                                                  Effective November 27, 2003 -
                                                  July 5, 2004
</TABLE>

                                      J-35

<PAGE>

<TABLE>
<CAPTION>
STANDARD & POOR'S
HOME LOAN CATEGORIZATION

<S>                                              <C>
State/Jurisdiction                                   Name of Anti-Predatory                  Category under
                                                     Lending Law/Effective Date              Applicable Anti-Predatory
                                                                                             Lending Law

Georgia (Oct 1, 2002 - Mar 6, 2003)               Georgia Fair Lending Act,                   Home Loan
                                                  Ga. Code Ann.ss.ss.7-6A-1 et
                                                  seq. Effective October 1,
                                                  2002 - March 6, 2003
New Jersey                                        New Jersey Home                             Home Loan
                                                  Ownership Security Act of
                                                  2002, N.J. Rev. Stat.ss.ss.
                                                  46:10B-22 et seq.
                                                  Effective for loans closed on
                                                  or after November 27, 2003
New Mexico                                        Home Loan Protection Act,                   Home Loan
                                                  N.M. Rev. Stat.ss.ss.58-21A-1
                                                  et seq.
                                                  Effective as of January 1,
                                                  2004; Revised as of February
                                                  26, 2004
North Carolina                                    Restrictions and Limitations                Consumer Home Loan
                                                  on High Cost Home Loans,
                                                  N.C. Gen. Stat.ss.ss.24-1.1E
                                                  et seq. Effective July 1,
                                                  2000; amended October 1,
                                                  2003 (adding open-end lines
                                                  of credit)

South Carolina                                    South Carolina High Cost                    Consumer Home Loan
                                                  and Consumer Home Loans
                                                  Act, S.C. Code Ann.ss.ss.
                                                  37-23-10 et seq. Effective
                                                  for loans taken on or after
                                                  January 1, 2004
</TABLE>

                                      J-36

<PAGE>

                                   SCHEDULE A

                 REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATE

                               Public Certificates

                 Class                            S&P                      Moody
--------------------------------------------------------------------------------
Class I-A-1............................           AAA                        Aaa
Class I-A-2............................           AAA                        Aa1
Class II-A-1...........................           AAA                        Aaa
Class II-A-2...........................           AAA                        Aa1
Class III-A............................           AAA                        Aaa
Class R-I..............................           AAA                        NR
Class R-II.............................           AAA                        NR
Class B-1..............................            AA                        NR
Class B-2..............................            A                         NR
Class B-3..............................           BBB                        NR

None of the above ratings has been lowered since the respective dates of such
letters.

                                      J-37

<PAGE>

                              Private Certificates

                 Class                 S&P                       Moody's
--------------------------------------- ----------------------------------------
Class B-4..............................           BB                         NR
Class B-5..............................            B                         NR
Class B-6..............................           NR                         NR

None of the above ratings has been lowered since the respective dates of such
letters.

                                      J-38

<PAGE>

                                   SCHEDULE B

                             MORTGAGE LOAN SCHEDULE

                             [Provided upon request]

                                      J-39-8-

                                   Exhibit 4.1
<PAGE>

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

                                    Depositor

                           HOMEQ SERVICING CORPORATION

                                    Servicer

                                       and

                         U.S. BANK NATIONAL ASSOCIATION

                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                            Dated as of July 1, 2004

                  MASTR Asset Backed Securities Trust 2004-FRE1
                       Mortgage Pass-Through Certificates

                                Series 2004-FRE1

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                     ARTICLE I

                                                    DEFINITIONS
<S>                        <C>                                                                                <C>
         SECTION 1.01.     Defined Terms........................................................................-2-
         SECTION 1.02.     Allocation of Certain Interest Shortfalls...........................................-56-
         SECTION 1.03      Rights of the NIMS Insurer..........................................................-58-

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES
         SECTION 2.01.     Conveyance of the Mortgage Loans....................................................-59-
         SECTION 2.02.     Acceptance of REMIC I by Trustee....................................................-61-
         SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Originator or
                           the Seller..........................................................................-63-
         SECTION 2.04.     Reserved............................................................................-66-
         SECTION 2.05.     Representations, Warranties and Covenants of the Servicer...........................-66-
         SECTION 2.06.     Conveyance of REMIC Regular Interests and Acceptance of
                           REMIC I, REMIC II, REMIC III, REMIC IV and REMIC V  by the
                           Trustee; Issuance of Certificates...................................................-68-
         SECTION 2.07.     Issuance of Class R Certificates and Class R-X Certificates.........................-69-

                                                    ARTICLE III

         SECTION 3.01.     Servicer to Act as Servicer.........................................................-70-
         SECTION 3.02.     Sub-Servicing Agreements Between Servicer and Sub-Servicers
                            ...................................................................................-72-
         SECTION 3.03.     Successor Sub-Servicers.............................................................-73-
         SECTION 3.04.     Liability of the Servicer...........................................................-73-
         SECTION 3.05.     No Contractual Relationship Between Sub-Servicers and the NIMS
                           Insurer, Trustee or Certificateholders..............................................-73-
         SECTION 3.06.     Assumption or Termination of Sub-Servicing Agreements by
                           Trustee.............................................................................-74-
         SECTION 3.07.     Collection of Certain Mortgage Loan Payments........................................-74-
         SECTION 3.08.     Sub-Servicing Accounts..............................................................-75-
         SECTION 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing
                           Accounts............................................................................-75-
         SECTION 3.10.     Collection Account and Distribution Account.........................................-76-
         SECTION 3.11.     Withdrawals from the Collection Account and Distribution
                           Account.............................................................................-78-
         SECTION 3.12.     Investment of Funds in the Collection Account and the Distribution
                           Account.............................................................................-81-

                                                        -i-

<PAGE>

         SECTION 3.13.     [Reserved]..........................................................................-82-
         SECTION 3.14.     Maintenance of Hazard Insurance and Errors and Omissions and
                           Fidelity Coverage...................................................................-82-
         SECTION 3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements
                            ...................................................................................-83-
         SECTION 3.16.     Realization Upon Defaulted Mortgage Loans...........................................-84-
         SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files.....................................-86-
         SECTION 3.18.     Servicing Compensation..............................................................-88-
         SECTION 3.19.     Reports to the Trustee; Collection Account Statements...............................-88-
         SECTION 3.20.     Statement as to Compliance..........................................................-88-
         SECTION 3.21.     Independent Public Accountants' Servicing Report....................................-89-
         SECTION 3.22.     Access to Certain Documentation; Filing of Reports by Trustee
                            ...................................................................................-89-
         SECTION 3.23.     Title, Management and Disposition of REO Property...................................-90-
         SECTION 3.24.     Obligations of the Servicer in Respect of Prepayment Interest
                           Shortfalls..........................................................................-93-
         SECTION 3.25.     [Reserved]..........................................................................-93-
         SECTION 3.26.     Obligations of the Servicer in Respect of Mortgage Rates and
                           Monthly Payments....................................................................-93-
         SECTION 3.27.     [Reserved]..........................................................................-93-
         SECTION 3.28.     [Reserved]..........................................................................-93-
         SECTION 3.29.     Advance Facility....................................................................-93-

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS
         SECTION 4.01.     Distributions.......................................................................-96-
         SECTION 4.02.     Statements to Certificateholders...................................................-108-
         SECTION 4.03.     Remittance Reports; Advances.......................................................-111-
         SECTION 4.04.     Allocation of Realized Losses......................................................-112-
         SECTION 4.05.     Compliance with Withholding Requirements...........................................-114-
         SECTION 4.06.     Exchange Commission; Additional Information........................................-114-
         SECTION 4.07.     Net WAC Rate Carryover Reserve Account.............................................-116-

                                                     ARTICLE V

                                                 THE CERTIFICATES
         SECTION 5.01.     The Certificate....................................................................-118-
         SECTION 5.02.     Registration of Transfer and Exchange of Certificates..............................-120-
         SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates..................................-124-
         SECTION 5.04.     Persons Deemed Owners..............................................................-125-
         SECTION 5.05.     Certain Available Information......................................................-125-

                                                    ARTICLE VI

                                                       -ii-

<PAGE>

         THE DEPOSITOR AND THE SERVICER.......................................................................-126-
         SECTION 6.01.     Liability of the Servicer and the Depositor........................................-126-
         SECTION 6.02.     Merger or Consolidation of, or Assumption of the Obligations of,
                           the Servicer or the Depositor......................................................-126-
         SECTION 6.03.     Limitation on Liability of the Servicer and Others.................................-126-
         SECTION 6.04.     Servicer Not to Resign.............................................................-127-
         SECTION 6.05.     Delegation of Duties...............................................................-128-
         SECTION 6.06.     Reserved...........................................................................-128-
         SECTION 6.07.     Inspection.........................................................................-128-
         SECTION 6.09.     Limitation Upon Liability of the Credit Risk Manager...............................-128-
         SECTION 6.10.     Removal of the Credit Risk Manager.................................................-129-

                                                    ARTICLE VII
         DEFAULT..............................................................................................-130-
         SECTION 7.01.     Servicer Events of Default.........................................................-130-
         SECTION 7.02.     Trustee to Act; Appointment of Successor...........................................-132-
         SECTION 7.03.     Notification to Certificateholders.................................................-134-
         SECTION 7.04.     Waiver of Servicer Events of Default...............................................-134-
         SECTION 7.05.     Survivability of Servicer Liabilities..............................................-134-

                                                   ARTICLE VIII

         CONCERNING THE TRUSTEE...............................................................................-135-
         SECTION 8.01.     Duties of Trustee..................................................................-135-
         SECTION 8.02.     Certain Matters Affecting the Trustee..............................................-136-
         SECTION 8.03.     Trustee not Liable for Certificates or Mortgage Loans..............................-137-
         SECTION 8.04.     Trustee May Own Certificates.......................................................-137-
         SECTION 8.05.     Trustee's Fees and Expenses........................................................-137-
         SECTION 8.06.     Eligibility Requirements for Trustee...............................................-138-
         SECTION 8.07.     Resignation and Removal of the Trustee.............................................-138-
         SECTION 8.08.     Successor Trustee..................................................................-139-
         SECTION 8.09.     Merger or Consolidation of Trustee.................................................-140-
         SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee......................................-140-
         SECTION 8.11.     Appointment of Office or Agency; Appointment of Custodian
                            ..................................................................................-141-
         SECTION 8.12.     Representations and Warranties.....................................................-141-

                                                    ARTICLE IX

                                                    TERMINATION
         SECTION 9.01.     Termination Upon Repurchase or Liquidation of All Mortgage
                           Loans..............................................................................-143-
         SECTION 9.02.     Additional Termination Requirements................................................-145-

                                                     ARTICLE X

                                     -iii-

<PAGE>

                                                 REMIC PROVISIONS
         SECTION 10.01.             REMIC Administration......................................................-147-
         SECTION 10.02.             Prohibited Transactions and Activities....................................-149-
         SECTION 10.03.             Servicer and Trustee Indemnification......................................-150-

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS
         SECTION 11.01.             Amendment.................................................................-152-
         SECTION 11.02.             Recordation of Agreement; Counterparts....................................-153-
         SECTION 11.03.             Limitation on Rights of Certificateholders................................-153-
         SECTION 11.04.             Governing Law.............................................................-154-
         SECTION 11.05.             Notices...................................................................-154-
         SECTION 11.06.             Severability of Provisions................................................-155-
         SECTION 11.07.             Notice to Rating Agencies.................................................-155-
         SECTION 11.08.             Article and Section References............................................-156-
         SECTION 11.09.             Grant of Security Interest................................................-156-
         SECTION 11.10.             Third Party Rights........................................................-157-

</TABLE>

                                                       -iv-

<PAGE>

Exhibits

Exhibit A-1       Form of Class A-1 Certificate
Exhibit A-2       Form of Class A-2 Certificate
Exhibit A-3       Form of Class A-IO Certificate
Exhibit A-4       Form of Class M-1 Certificate
Exhibit A-5       Form of Class M-2 Certificate
Exhibit A-6       Form of Class M-3 Certificate
Exhibit A-7       Form of Class M-4 Certificate
Exhibit A-8       Form of Class M-5 Certificate
Exhibit A-9       Form of Class M-6 Certificate
Exhibit A-10      Form of Class M-7 Certificate
Exhibit A-11      Form of Class M-8 Certificate
Exhibit A-12      Form of Class M-9 Certificate
Exhibit A-13      Form of Class M-10 Certificate
Exhibit A-14      Form of Class CE Certificate
Exhibit A-15      Form of Class P Certificate
Exhibit A-16      Form of Class R Certificate
Exhibit A-17      Form of Class R-X Certificate
Exhibit B         [Reserved]
Exhibit C-1       Form of Trustee's Initial Certification
Exhibit C-2       Form of Trustee's Final Certification
Exhibit C-3       Form of Trustee's Receipt of Mortgage Notes
Exhibit D         Form of Mortgage Loan Purchase Agreement
Exhibit E         Request for Release
Exhibit F-1       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of the Private Certificates Pursuant to Rule 144A Under the
                  1933 Act
Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of
                  Transferor Affidavit in Connection with Transfer of Residual
                  Certificates
Exhibit G         Form of Certification with respect to ERISA and the Code
Exhibit H         Form of Report Pursuant to Section 4.06 Exhibit I Form of Lost
                  Note Affidavit
Exhibit J-1       Form of Certification to Be Provided by the Trustee with
                  Form 10-K
Exhibit           J-2 Form of Backup Certification to Be Provided by the
                  Servicer with respect to the Form 10-K
Exhibit K         Form of Custodial Agreement
Exhibit L         Annual Statement of Compliance pursuant to Section 3.20
Exhibit M         Forms of Cap Contracts

Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule

                                       -v-

<PAGE>

     This Pooling and Servicing Agreement,  is dated and effective as of July 1,
2004, among MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC. as Depositor, HOMEQ
SERVICING CORPORATION as Servicer and U.S. BANK NATIONAL ASSOCIATION as Trustee.

                             PRELIMINARY STATEMENT:

     The  Depositor  intends  to sell  pass-through  certificates  to be  issued
hereunder in multiple  classes,  which in the aggregate will evidence the entire
beneficial  ownership  interest  in  each  REMIC  (as  defined  herein)  created
hereunder.  The Trust Fund will consist of a segregated pool of assets comprised
of the  Mortgage  Loans  and  certain  other  related  assets  subject  to  this
Agreement.

                                       -vi-

<PAGE>

                                     REMIC I

     As provided herein,  the Trustee will elect to treat the segregated pool of
assets  consisting of the Mortgage Loans and certain other related assets (other
than the Net WAC Rate Carryover Reserve Account,  the Servicer Prepayment Charge
Payment Amount and the Cap  Contracts)  subject to this Agreement as a REMIC for
federal  income  tax  purposes,  and  such  segregated  pool of  assets  will be
designated  as  "REMIC  I." The  Class R-I  Interest  will be the sole  class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein). The following table irrevocably sets forth the designation, the REMIC I
Remittance Rate, the initial  Uncertificated Balance and, solely for purposes of
satisfying  Treasury  regulation  section  1.860G-  1(a)(4)(iii),   the  "latest
possible  maturity  date" for each of the REMIC I Regular  Interests (as defined
herein). None of the REMIC I Regular Interests will be certificated.

<TABLE>
<CAPTION>

                                      REMIC I                          Initial                    Latest Possible
       Designation                Remittance-Rate               Uncertificated-Balance            Maturity-Date(1)
-------------------------- --------------------------- ------------------------------------- ---------------------------
<S>                                 <C>                           <C>                              <C>
         I-LTAA                     Variable(2)                    $ 249,441,624.21                April 25, 2034
         I-LTA1                     Variable(2)                     $ 1,380,380.00                 April 25, 2034
         I-LTA2                     Variable(2)                      $ 611,335.00                  April 25, 2034
         I-LTM1                     Variable(2)                      $ 99,270.00                   April 25, 2034
         I-LTM2                     Variable(2)                      $ 69,995.00                   April 25, 2034
         I-LTM3                     Variable(2)                      $ 57,270.00                   April 25, 2034
         I-LTM4                     Variable(2)                      $ 50,905.00                   April 25, 2034
         I-LTM5                     Variable(2)                      $ 44,545.00                   April 25, 2034
         I-LTM6                     Variable(2)                      $ 44,545.00                   April 25, 2034
         I-LTM7                     Variable(2)                      $ 38,180.00                   April 25, 2034
         I-LTM8                     Variable(2)                      $ 38,180.00                   April 25, 2034
         I-LTM9                     Variable(2)                      $ 31,815.00                   April 25, 2034
         I-LTM10                    Variable(2)                      $ 25,455.00                   April 25, 2034
         I-LTZZ                     Variable(2)                     $ 2,598,770.39                 April 25, 2034
          I-LTP                     Variable(2)                        $ 100.00                    April 25, 2034
        I-LT1SUB                    Variable(2)                      $ 767,366.40                  April 25, 2034
        I-LT1GRP                    Variable(2)                     $ 3,528,126.43                 April 25, 2034
        I-LT2SUB                    Variable(2)                      $ 339,849.96                  April 25, 2034
        I-LT2GRP                    Variable(2)                     $ 1,562,519.96                 April 25, 2034
          I-XX                      Variable(2)                    $ 248,334,406.82                April 25, 2034
</TABLE>

________________

(1)  Solely  for  purposes  of  Section   1.860G-1(a)(4)(iii)  of  the  Treasury
     regulations,  the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest  maturity date has been designated as
     the "latest possible maturity date" for each REMIC I Regular Interest.
(2)  Calculated in accordance  with the definition of "REMIC I Remittance  Rate"
     herein.

                                      -vii-

<PAGE>

                                    REMIC II

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

<TABLE>
<CAPTION>

                                        REMIC II                       Initial                   Latest Possible
         Designation                 Remittance-Rate           Uncertificated-Balance           Maturity-Date(1)
---------------------------  --------------------------  ----------------------------------  ---------------------------
<S>                                   <C>                        <C>                            <C>
           II-LTA1                     Variable(1)                $        276,076,000.00        April 25, 2034
           II-LTA2                     Variable(1)                $        122,267,000.00        April 25, 2034
           II-LTM1                     Variable(1)                $         19,854,000.00        April 25, 2034
           II-LTM2                     Variable(1)                $         13,999,000.00        April 25, 2034
           II-LTM3                     Variable(1)                $         11,454,000.00        April 25, 2034
           II-LTM4                     Variable(1)                $         10,181,000.00        April 25, 2034
           II-LTM5                     Variable(1)                $          8,909,000.00        April 25, 2034
           II-LTM6                     Variable(1)                $          8,909,000.00        April 25, 2034
           II-LTM7                     Variable(1)                $          7,636,000.00        April 25, 2034
           II-LTM8                     Variable(1)                $          7,636,000.00        April 25, 2034
           II-LTM9                     Variable(1)                $          6,363,000.00        April 25, 2034
          II-LTM10                     Variable(1)                $          5,091,000.00        April 25, 2034
           II-LTCE                     Variable(2)                $         10,689,539.20        April 25, 2034
           II-LTP                        N/A(3)                   $                100.00        April 25, 2034
</TABLE>

_______________
(1)  Calculated in accordance with the definition of "REMIC II Remittance  Rate"
     herein.
(2)  REMIC II Regular  Interest  II-L CE Interest  will  accrue  interest at its
     REMIC II Remittance Rate on the Uncertificated  Notional Amount of REMIC II
     Regular  Interest  II-LTCE  outstanding from time to time which shall equal
     the  Uncertificated  Balance of the REMIC I Regular  Interests  (other than
     REMIC I Regular Interest I-LTP). REMIC II Regular Interest II-LTCE Interest
     will not  accrue  interest  on its  Uncertificated  Balance.
(3)  REMIC II Regular Interest II-LTP Interest will not accrue interest.

                                     -viii-

<PAGE>

                                    REMIC III

     As provided herein,  the Trustee will elect to treat the segregated pool of
assets  consisting  of the REMIC II  Regular  Interests  as a REMIC for  federal
income tax purposes,  and such  segregated  pool of assets will be designated as
"REMIC III." The Class R-III  Interest will evidence the sole class of "residual
interests"  in REMIC III for  purposes  of the REMIC  Provisions  under  federal
income tax law. The following table irrevocably sets forth the designation,  the
Pass-Through  Rate, the initial  aggregate  Certificate  Principal  Balance and,
solely   for    purposes   of    satisfying    Treasury    regulation    section
1.860G-1(a)(4)(iii),  the  "latest  possible  maturity  date" for the  indicated
Classes of Certificates.

<TABLE>
<CAPTION>

                                                                  Initial Aggregate
                                                                Certificate Principal            Latest Possible
         Designation                Pass-Through Rate                  Balance                    Maturity Date
---------------------------  ------------------------------  ----------------------------  ---------------------------------

<S>                                  <C>                         <C>                            <C>
          Class A-1                    Variable(1)                $ 276,076,000.00               April 25, 2034
          Class A-2                    Variable(1)                $ 122,267,000.00               April 25, 2034
         Class A-IO                    Variable(1)                       (2)                     April 25, 2034
          Class M-1                    Variable(1)                 $ 19,854,000.00               April 25, 2034
          Class M-2                    Variable(1)                 $ 13,999,000.00               April 25, 2034
          Class M-3                    Variable(1)                 $ 11,454,000.00               April 25, 2034
          Class M-4                    Variable(1)                 $ 10,181,000.00               April 25, 2034
          Class M-5                    Variable(1)                 $ 8,909,000.00                April 25, 2034
          Class M-6                    Variable(1)                 $ 8,909,000.00                April 25, 2034
          Class M-7                    Variable(1)                 $ 7,636,000.00                April 25, 2034
          Class M-8                    Variable(1)                 $ 7,636,000.00                April 25, 2034
          Class M-9                    Variable(1)                 $ 6,363,000.00                April 25, 2034
         Class M-10                    Variable(1)                 $ 5,091,000.00                April 25, 2034
      Class CE Interest                Variable(3)                 $ 10,689,539.20               April 25, 2034
      Class P Interest                   N/A(4)                       $ 100.00                   April 25, 2034

</TABLE>
_______________
(1)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(2)  The Class A-IO Certificates will not have a Certificate  Principal Balance,
     but will accrue interest on their Notional Amount as defined herein.
(3)  The Class CE Interest  will receive 100% of amounts  received in respect of
     REMIC II Regular  Interest  II-LTCE.  (4) The Class P Interest will receive
     100% of amounts received in respect of REMIC II Regular Interest II-LTP.

                                      -ix-

<PAGE>

                                    REMIC IV

     As  provided  herein,  the  Trustee  shall  make an  election  to treat the
segregated  pool of assets  consisting  of the Class CE  Interest as a REMIC for
federal  income  tax  purposes,  and  such  segregated  pool of  assets  will be
designated as "REMIC IV." The Class R-IV Interest  represents  the sole class of
"residual interests" in REMIC IV for purposes of the REMIC Provisions.

     The  following  table  sets  forth (or  describes)  the Class  designation,
Pass-Through  Rate and  Original  Class  Certificate  Principal  Balance for the
indicated Class of Certificates that represents a "regular interest" in REMIC IV
created hereunder:

<TABLE>
<CAPTION>

                                                                  Initial Aggregate
                                                                Certificate Principal            Latest Possible
      Class Designation             Pass-Through Rate                  Balance                  Maturity Date(1)
-----------------------------  ----------------------------  ----------------------------  -------------------------

<S>                                   <C>                         <C>                          <C>
    Class CE Certificates              Variable(2)                 $ 10,689,539.20               April 25, 2034

</TABLE>

_______________

(1)  Solely  for  purposes  of  Section   1.860G-1(a)(4)(iii)  of  the  Treasury
     regulations,  the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for the Class CE Certificates.

(2)  The Class CE Certificates  will receive 100% of amounts received in respect
     of the Class CE Interest.

                                      -x-

<PAGE>

                                     REMIC V

     As  provided  herein,  the  Trustee  shall  make an  election  to treat the
segregated  pool of assets  consisting  of the Class P  Interest  as a REMIC for
federal  income  tax  purposes,  and  such  segregated  pool of  assets  will be
designated  as "REMIC V." The Class R-V  Interest  represents  the sole class of
"residual interests" in REMIC V for purposes of the REMIC Provisions.

     The  following  table  sets  forth (or  describes)  the Class  designation,
Pass-Through  Rate and  Original  Class  Certificate  Principal  Balance for the
indicated Class of Certificates that represents a "regular  interest" in REMIC V
created hereunder:

<TABLE>
<CAPTION>

                                                                  Initial Aggregate
                                                                Certificate Principal            Latest Possible
      Class Designation             Pass-Through Rate                  Balance                  Maturity Date(1)
----------------------------  ----------------------------  -----------------------------  -------------------------

<S>                                   <C>                            <C>                        <C>
    Class P Certificates               Variable(2)                     $100.00                   April 25, 2034

</TABLE>

_______________
(1)  Solely  for  purposes  of  Section   1.860G-1(a)(4)(iii)  of  the  Treasury
     regulations,  the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for the Class P Certificates.
(2)  The Class P Certificates  will receive 100% of amounts  received in respect
     of the Class P Interest.

     As of  the  Cut-off  Date,  the  Mortgage  Loans  had an  aggregate  Stated
Principal Balance of $ 509,064,639.20.

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

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01. Defined Terms.

     Whenever used in this Agreement, including, without limitation, in the
Preliminary Statement hereto, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article.
Unless otherwise specified, all calculations described herein shall be made on
the basis of a 360-day year consisting of twelve 30-day months.

     "Accrual Period": With respect to the Class A Certificates, the Class A-IO
Certificates and the Mezzanine Certificates and each Distribution Date, the
period commencing on the preceding Distribution Date (or in the case of the
first such Accrual Period, commencing on the Closing Date) and ending on the day
preceding the current Distribution Date. With respect to the Class CE
Certificates and the REMIC I Regular Interests and each Distribution Date, the
calendar month prior to the month of such Distribution Date.

     "Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate that is subject to
adjustment.

     "Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage Loan (or
the related REO Property), as of any date of determination, a per annum rate of
interest equal to the applicable Maximum Mortgage Rate for such Mortgage Loan
(or the Mortgage Rate in the case of any Fixed-Rate Mortgage Loan) as of the
first day of the month preceding the month in which the related Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.

     "Adjusted Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the applicable Mortgage Rate for such Mortgage Loan as of the
first day of the month preceding the month in which the related Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate, (ii) the Servicing Fee
Rate and (iii) the Credit Risk Manager Fee Rate.

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

     "Advance": With respect to any Distribution Date, as to any Mortgage Loan
or REO Property, any advance made by the Servicer in respect of Monthly Payments
due during the related Due Period pursuant to Section 4.03.

     "Advance Facility": As defined in Section 3.29 hereof.

     "Advancing Person": As defined in Section 3.29 hereof.

                                      -2-

<PAGE>

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

     "Aggregate Loss Severity Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred on any Mortgage Loans from the
Cut-off Date to the last day of the preceding calendar month and the denominator
of which is the aggregate principal balance of such Mortgage Loans immediately
prior to the liquidation of such Mortgage Loans.

     "Agreement": This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.

     "Allocated Realized Loss Amount": With respect to any Distribution Date and
any Class of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on such Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining undistributed from the previous Distribution Date and reduced by the
amount of any Subsequent Recoveries added to the Certificate Principal Balance
of such Class of Certificates.

     "Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form (excepting therefrom, if applicable, the mortgage
recordation information which has not been required pursuant to Section 2.01
hereof or returned by the applicable recorder's office), which is sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect of record the sale of the Mortgage, which assignment, notice
of transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by law.

     "Available Funds": With respect to any Distribution Date, an amount equal
to the excess of (i) the sum of (a) the aggregate of the related Monthly
Payments received on the Mortgage Loans on or prior to the related Determination
Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal Prepayments,
Subsequent Recoveries, proceeds from repurchases of and substitutions for such
Mortgage Loans and other unscheduled recoveries of principal and interest in
respect of the Mortgage Loans received during the related Prepayment Period, (c)
the aggregate of any amounts received in respect of a related REO Property
withdrawn from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Servicer in respect of related Prepayment Interest Shortfalls for
such Distribution Date, (e) the aggregate of any Advances made by the Servicer
for such Distribution Date in respect of the Mortgage Loans and (f) the
aggregate of any related advances made by the Trustee in respect of the Mortgage
Loans for such Distribution Date pursuant to Section 7.02 over (ii) the sum of
(a) amounts reimbursable or payable to the Servicer pursuant to Section 3.11(a),
(b) Extraordinary Trust Fund Expenses reimbursable to the Trustee pursuant to
Section 3.11(b), (c) amounts deposited in the Collection Account or the
Distribution Account

                                       -3-

<PAGE>

pursuant to clauses (a) through (f) above, as the case may be, in error, (d) the
amount of any Prepayment Charges collected by the Servicer in connection with
the full or partial prepayment of any of the Mortgage Loans and any Servicer
Prepayment Charge Payment Amount and (e) the Trustee Fee and any indemnification
amounts owed to the Trustee payable from the Distribution Account pursuant to
Section 8.05.

     "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.

     "Book-Entry Certificate": The Class A Certificates and the Mezzanine
Certificates for so long as the Certificates of such Class shall be registered
in the name of the Depository or its nominee.

     "Book-Entry Custodian": The custodian appointed pursuant to Section 5.01.

     "Business Day": Any day other than a Saturday, a Sunday or a day on which
banking or savings and loan institutions in the State of California, the State
of New York, the State of New Jersey, the Commonwealth of Pennsylvania, or in
the cities in which the Corporate Trust Office of the Trustee is located, are
authorized or obligated by law or executive order to be closed.

     "Cap Contracts": The Class A-1 Cap Contract, the Class A-2 Cap Contract and
the Mezzanine Cap Contract in the forms attached hereto as Exhibit L.

     "Certificate": Any one of the Mortgage Pass-Through Certificates, Series
2004-FRE1, Class A-1, Class A-2, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class CE,
Class P, Class R or Class R-X, issued under this Agreement.

     "Certificate Factor": With respect to any Class of Regular Certificates as
of any Distribution Date, a fraction, expressed as a decimal carried to at least
six places, the numerator of which is the aggregate Certificate Principal
Balance (or the Notional Amount, in the case of the Class CE Certificates) of
such Class of Certificates on such Distribution Date (after giving effect to any
distributions of principal and allocations of Realized Losses in reduction of
the Certificate Principal Balance (or the Notional Amount, in the case of the
Class CE Certificates) of such Class of Certificates to be made on such
Distribution Date), and the denominator of which is the initial aggregate
Certificate Principal Balance (or the Notional Amount, in the case of the Class
CE Certificates) of such Class of Certificates as of the Closing Date.

     "Certificate Margin": With respect to the Class A-1 Certificates and REMIC
I Regular Interest I-LTA1, 0.340% in the case of each Distribution Date through
and including the Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans (and properties acquired in respect thereof)
remaining in the Trust Fund is reduced to less than 10% of the aggregate Cut-off
Date Principal Balance of the Mortgage Loans and 0.680% in the case of each
Distribution Date thereafter.

     With respect to the Class A-2 Certificates and REMIC I Regular Interest
I-LTA2,

                                       -4-

<PAGE>

0.340% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 0.680% in the case of each Distribution Date
thereafter.

     With respect to the Class M-1 Certificates and REMIC I Regular Interest
I-LTM1, 0.550% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 0.825% in the case of each Distribution Date
thereafter.

     With respect to the Class M-2 Certificates and REMIC I Regular Interest
I-LTM2, 0.600% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 0.900% in the case of each Distribution Date
thereafter.

     With respect to the Class M-3 Certificates and REMIC I Regular Interest
I-LTM3, 0.670% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 1.005% in the case of each Distribution Date
thereafter.

     With respect to the Class M-4 Certificates and REMIC I Regular Interest
I-LTM4, 1.100% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 1.650% in the case of each Distribution Date
thereafter.

     With respect to the Class M-5 Certificates and REMIC I Regular Interest
I-LTM5, 1.200% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 1.800% in the case of each Distribution Date
thereafter.

     With respect to the Class M-6 Certificates and REMIC I Regular Interest
I-LTM6, 1.400% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 2.100% in the case of each Distribution Date

                                       -5-

<PAGE>

thereafter.

     With respect to the Class M-7 Certificates and REMIC I Regular Interest
I-LTM7, 1.800% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 2.700% in the case of each Distribution Date
thereafter.

     With respect to the Class M-8 Certificates and REMIC I Regular Interest
I-LTM8, 1.950% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 2.925% in the case of each Distribution Date
thereafter.

     With respect to the Class M-9 Certificates and REMIC I Regular Interest
I-LTM9, 3.500% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 5.250% in the case of each Distribution Date
thereafter.

     With respect to the Class M-10 Certificates and REMIC I Regular Interest
I-LTM10, 3.500% in the case of each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans and 5.250% in the case of each Distribution Date
thereafter.

     "Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or a Non-United States Person shall not be a Holder of a Residual Certificate
for any purposes hereof and, solely for the purposes of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or the Servicer or any Affiliate thereof shall be deemed not to be
outstanding and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 11.01. The Trustee and the NIMS Insurer may conclusively
rely upon a certificate of the Depositor or the Servicer in determining whether
a Certificate is held by an Affiliate thereof. All references herein to
"Holders" or "Certificateholders" shall reflect the rights of Certificate Owners
as they may indirectly exercise such rights through the Depository and
participating members thereof, except as otherwise specified herein; provided,
however, that the Trustee and the NIMS Insurer shall be required to recognize as
a "Holder" or "Certificateholder" only the Person in whose name a Certificate is
registered in the Certificate Register.

     "Certificate Owner": With respect to a Book-Entry Certificate, the Person
who is the

                                       -6-

<PAGE>

beneficial owner of such Certificate as reflected on the books of the Depository
or on the books of a Depository Participant or on the books of an indirect
participating brokerage firm for which a Depository Participant acts as agent.

     "Certificate Principal Balance": With respect to each Class A Certificate,
Mezzanine Certificate or Class P Certificate as of any date of determination,
the Certificate Principal Balance of such Certificate on the Distribution Date
immediately prior to such date of determination plus any Subsequent Recoveries
added to the Certificate Principal Balance of such Certificate pursuant to
Section 4.01, minus all distributions allocable to principal made thereon and
Realized Losses allocated thereto on such immediately prior Distribution Date
(or, in the case of any date of determination up to and including the first
Distribution Date, the initial Certificate Principal Balance of such
Certificate, as stated on the face thereof). With respect to each Class CE
Certificate as of any date of determination, an amount equal to the Percentage
Interest evidenced by such Certificate times the excess, if any, of (A) the then
aggregate Uncertificated Balance of the REMIC I Regular Interests over (B) the
then aggregate Certificate Principal Balance of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates then outstanding.

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

     "Class": Collectively, all of the Certificates bearing the same class
designation.

     "Class A Certificates": Any Class A-1 Certificate or Class A-2 Certificate.

     "Class A-1 Cap Contract": The cap contract between the Trustee and the
counterparty thereunder relating to the Class A-1 Certificates.

     "Class A-1 Certificate": Any one of the Class A-1 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class A-2 Cap Contract": The cap contract between the Trustee and the
counterparty thereunder relating to the Class A-2 Certificates.

     "Class A-2 Certificates": Any one of the Class A-2 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class A-IO Certificate": Any one of the Class A-IO Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-IO and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class CE Certificate": Any one of the Class CE Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-14 and evidencing a Regular Interest in REMIC IV for
purposes of the REMIC Provisions.

     "Class CE Interest": An uncertificated interest in the Trust Fund held by
the Trustee

                                       -7-

<PAGE>

on behalf of the Holders of the Class CE Certificates, evidencing a Regular
Interest in REMIC III for purposes of the REMIC Provisions.

     "Class M-1 Certificate": Any one of the Class M-1 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-4 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-1 Principal Distribution Amount": The excess of (x) the sum of (i)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the distribution of the Senior Principal Distribution Amount
on such Distribution Date) and (ii) the Certificate Principal Balance of the
Class M-1 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 64.30% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the excess of
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) over $2,545,323.20.

     "Class M-2 Certificate": Any one of the Class M-2 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-5 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-2 Principal Distribution Amount": The excess of (x) the sum of (i)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the distribution of the Senior Principal Distribution Amount
on such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date) and (iii) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 69.80% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the excess of the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) over $2,545,323.20.

     "Class M-3 Certificate": Any one of the Class M-3 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-6 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-3 Principal Distribution Amount": With respect to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Senior Principal Distribution Amount on such

                                       -8-

<PAGE>

Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date) and (iv) the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 74.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the excess of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) over
$2,545,323.20.

     "Class M-4 Certificate": Any one of the Class M-4 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-7 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-4 Principal Distribution Amount": With respect to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 78.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the excess of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) over
$2,545,323.20.

     "Class M-5 Certificate": Any one of the Class M-5 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-8 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-5 Principal Distribution Amount": With respect to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution

                                       -9-

<PAGE>

Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (vi) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 81.80% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the excess of the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) over $2,545,323.20.

     "Class M-6 Certificate": Any one of the Class M-6 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-9 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-6 Principal Distribution Amount": With respect to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (vii) the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 85.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the excess of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) over
$2,545,323.20.

     "Class M-7 Certificate": Any one of the Class M-7 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-10 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

                                      -10-

<PAGE>

     "Class M-7 Principal Distribution Amount": With respect to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date) and (viii) the Certificate
Principal Balance of the Class M-7 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 88.30% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the excess of the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) over $2,545,323.20.

     "Class M-8 Certificate": Any one of the Class M-8 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-11 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-8 Principal Distribution Amount": With respect to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date) and (ix) the Certificate Principal Balance of the Class M-8

                                      -11-

<PAGE>

Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 91.30% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the excess of the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) over $2,545,323.20.

     "Class M-9 Certificate": Any one of the Class M-9 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-12 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

     "Class M-9 Principal Distribution Amount": With respect to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates
(after taking into account the distribution of the Class M-8 Principal
Distribution Amount on such Distribution Date), and (x) the Certificate
Principal Balance of the Class M-9 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 93.80% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the excess of the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) over $2,545,323.20.

     "Class M-10 Certificate": Any one of the Class M-10 Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-13 and evidencing a Regular Interest in REMIC III for
purposes of the REMIC Provisions.

                                      -12-

<PAGE>

     "Class M-10 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Senior Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates (after taking into account the
distribution of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the distribution of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the
distribution of the Class M-8 Principal Distribution Amount on such Distribution
Date), (x) the Certificate Principal Balance of the Class M-9 Certificates
(after taking into account the distribution of the Class M-9 Principal
Distribution Amount on such Distribution Date) and (xi) the Certificate
Principal Balance of the Class M-10 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 95.80% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the excess of the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) over $2,545,323.20.

     "Class P Certificate": Any one of the Class P Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-15 and evidencing a Regular Interest in REMIC V for purposes
of the REMIC Provisions.

     "Class P Interest": An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class P Certificates, evidencing a
Regular Interest in REMIC III for purposes of the REMIC Provisions.

     "Class R Certificate": Any one of the Class R Certificates executed,
authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-16 and evidencing the ownership of the Class R-I Interest,
the Class R-II Interest and the Class R-III.

     "Class R-X Certificate": The Class R-X Certificate executed, authenticated
and delivered by the Trustee, substantially in the form annexed hereto as
Exhibit A-17 and evidencing the ownership of the Class R-IV Interest and the
Class R-V Interest.

                                      -13-

<PAGE>

     "Class R-I Interest": The uncertificated Residual Interest in REMIC I.

     "Class R-II Interest": The uncertificated Residual Interest in REMIC II.

     "Class R-III Interest": The uncertificated Residual Interest in REMIC III.

     "Class R-IV Interest": The uncertificated Residual Interest in REMIC IV.

     "Class R-V Interest": The uncertificated Residual Interest in REMIC V.

     "Closing Date": July 29, 2004.

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

     "Collection Account": The account or accounts created and maintained, or
caused to be created and maintained, by the Servicer pursuant to Section
3.10(a), which shall be entitled "HomEq Servicing Corporation, as Servicer for
U.S. Bank National Association, as Trustee, in trust for the registered holders
of MASTR Asset Backed Securities Trust 2004-FRE1, Mortgage Pass- Through
Certificates." The Collection Account must be an Eligible Account.

     "Commission": The Securities and Exchange Commission.

     "Compensating Interest": As defined in Section 3.24 hereof.

     "Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office, at the date
of the execution of this instrument is located at 60 Livingston Avenue, St.
Paul, Minnesota 55107, Attention: Structured Finance/MASTR 2004-FRE1, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Servicer and the Originator.

     "Corresponding Certificate": With respect to each REMIC I Regular Interest
or REMIC II Regular Interest set forth below, the corresponding Regular
Certificate set forth in the table below:

   REMIC I REGULAR INTEREST/REMIC II              Regular Certificate
            REGULAR INTEREST
----------------------------------------  ------------------------------

             I-LTA1/II-LTA1                            Class A-1
             I-LTA2/II-LTA2                            Class A-2
             I-LTM1/II-LTM1                            Class M-1
             I-LTM2/II-LTM2                            Class M-2
             I-LTM3/II-LTM3                            Class M-3
             I-LTM4/II-LTM4                            Class M-4
             I-LTM5/II-LTM5                            Class M-5
             I-LTM6/II-LTM6                            Class M-6
             I-LTM7/II-LTM7                            Class M-7
             I-LTM8/II-LTM8                            Class M-8

                                      -14-

<PAGE>

             I-LTM9/II-LTM9                            Class M-9
            I-LTM10/II-LTM10                           Class M-10
              I-LTP/II-LTP                              Class P
                II-LTCE                                 Class CE

     "Credit Enhancement Percentage": For any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the sum of the aggregate
Certificate Principal Balances of the Mezzanine Certificates and the Class CE
Certificates, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans, calculated prior to taking into account
distributions of principal on the Mortgage Loans and distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Certificates then entitled to distributions of principal on such
Distribution Date.

     "Credit Risk Management Agreement": The agreement among the Servicer and
the Credit Risk Manager, regarding the loss mitigation and advisory services to
be provided by the Credit Risk Manager.

     "Credit Risk Manager": The Murrayhill Company, a Colorado corporation, and
its successors and assigns.

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

     "Credit Risk Manager Fee Rate": 0.015% per annum.

     "Cumulative Loss Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
preceding calendar month and the denominator of which is the sum of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     "Custodial Agreement": The custodial agreement, dated July 1, 2004, entered
into among the Trustee, the Custodian and the Servicer in the form of Exhibit K
attached hereto.

     "Custodian": Wells Fargo Bank, N.A., a national banking association, or its
successor in interest as Custodian pursuant to the Custodial Agreement.

     "Cut-off Date": With respect to each Original Mortgage Loan, July 1, 2004.
With respect to all Qualified Substitute Mortgage Loans, their respective dates
of substitution. References herein to the "Cut-off Date," when used with respect
to more than one Mortgage Loan, shall be to the respective Cut-off Dates for
such Mortgage Loans.

     "Cut-off Date Principal Balance": With respect to any Mortgage Loan, the
unpaid

                                      -15-

<PAGE>

principal balance thereof as of the Cut-off Date of such Mortgage Loan (or as of
the applicable date of substitution with respect to a Qualified Substitute
Mortgage Loan), after giving effect to scheduled payments due on or before the
Cut-off Date, whether or not received.

     "Debt Service Reduction": With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
resulting from a Deficient Valuation.

     "Deficient Valuation": With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.

     "Definitive Certificates": As defined in Section 5.01(b).

     "Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.

     "Delinquency Percentage": As of the last day of the related Due Period, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of all Mortgage Loans that, as of the last day of the
previous calendar month, are 60 or more days delinquent, are in foreclosure,
have been converted to REO Properties or have been discharged by reason of
bankruptcy, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans and REO Properties as of the last day of the
previous calendar month.

     "Depositor": Mortgage Asset Securitization Transactions, Inc., a Delaware
corporation, or its successor in interest.

     "Depository": The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry Certificates, is CEDE &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.

     "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.

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

     "Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding

                                      -16-

<PAGE>

of such REO Property primarily for sale to customers, the performance of any
construction work thereon or any use of such REO Property in a trade or business
conducted by REMIC I other than through an Independent Contractor; provided,
however, that the Trustee (or the Servicer on behalf of the Trustee) shall not
be considered to Directly Operate an REO Property solely because the Trustee (or
the Servicer on behalf of the Trustee) establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to such REO
Property.

     "Disqualified Organization": Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for Freddie Mac, a majority of its board of directors is not
selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers'cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any of Trust REMIC or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Residual Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.

     "Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"U.S. Bank National Association, as Trustee, in trust for the registered holders
of MASTR Asset Backed Securities Trust 2004-FRE1, Mortgage Pass-Through
Certificates, Series 2004-FRE1." The Distribution Account must be an Eligible
Account.

     "Distribution Date": The 25th day of any month, or if such 25th day is not
a Business Day, the Business Day immediately following such 25th day, commencing
in August 2004.

     "Due Date": With respect to each Distribution Date, the first day of the
calendar month in which such Distribution Date occurs, which is generally the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.

     "Due Period": With respect to any Distribution Date, the period commencing
on the second day of the month immediately preceding the month in which such
Distribution Date occurs and ending on the related Due Date.

     "Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of

                                      -17-

<PAGE>

a holding company, the short-term unsecured debt obligations of such holding
company) are rated P-1 by Moody's, F-1 by Fitch or A-1+ by S&P (or comparable
ratings if Moody's, Fitch and S&P are not the Rating Agencies) at the time any
amounts are held on deposit therein, (ii) with respect to any Escrow Account, an
account or accounts the deposits in which are fully insured by the FDIC (to the
limits established by such corporation), the uninsured deposits in which account
are otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to the NIMS Insurer, the Trustee and to each Rating Agency, the
Certificateholders will have a claim with respect to the funds in such account
or a perfected first priority security interest against such 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, (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution, national banking association or trust company acting in its
fiduciary capacity or (iv) an account otherwise acceptable to the NIMS Insurer
and to each Rating Agency without reduction or withdrawal of their then current
ratings of the Certificates as evidenced by a letter from each Rating Agency to
the Trustee and the NIMS Insurer. Eligible Accounts may bear interest.

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

     "Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.

     "Estate in Real Property": A fee simple estate in a parcel of land.

     "Excess Overcollateralized Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date,
assuming that 100% of the Principal Remittance Amount is applied as a principal
distribution on such Distribution Date over (ii) the Overcollateralization
Target Amount for such Distribution Date.

     "Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Monthly Interest Distributable Amount payable on the
Class CE Certificates on such Distribution Date as reduced by Realized Losses
allocated thereto with respect to such Distribution Date pursuant to Section
4.04 and (y) the Overcollateralization Deficiency Amount for such Distribution
Date.

     "Extraordinary Trust Fund Expense": Any amounts reimbursable to the
Trustee, or any director, officer, employee or agent of the Trustee from the
Trust Fund pursuant to Section 8.05 or Section 10.01(c) and any amounts payable
from the Distribution Account in respect of taxes pursuant to Section
10.01(g)(iii).

     "Fannie Mae": Fannie Mae, formally known as the Federal National Mortgage
Association, or any successor thereto.

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

                                      -18-

<PAGE>

     "Final Recovery Determination": With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased or
repurchased by the Originator, the Seller, the Depositor or the Servicer
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section
9.01), a determination made by the Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.

     "Fitch": Fitch Ratings, or its successor in interest.

     "Fixed-Rate Mortgage Loan": Each of the Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate that is fixed for the entire
term of the Mortgage Loan.

     "Formula Rate": For any Distribution Date and the Class A Certificates and
the Mezzanine Certificates, the lesser of (i) One-Month LIBOR plus the related
Certificate Margin and (ii) the Maximum Cap Rate.

     "Freddie Mac": Freddie Mac, formally known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.

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

     "Group I Allocation Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the Group I
Principal Remittance Amount for such Distribution Date, and the denominator of
which is the Principal Remittance Amount for such Distribution Date.

     "Group I Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group I Principal Remittance Amount for
such Distribution Date over (ii)(a) the Overcollateralization Release Amount, if
any, for such Distribution Date multiplied by (b) the Group I Allocation
Percentage.

     "Group I Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group I
Mortgage Loans.

     "Group I Mortgage Loan": A Mortgage Loan assigned to Loan Group I with a
principal balance that conforms to Fannie Mae and Freddie Mac loan limits.

     "Group I Principal Distribution Amount": With respect to any Distribution
Date, the sum of (i) the Group I Basic Principal Distribution Amount for such
Distribution Date and (ii)(a) the Extra Principal Distribution Amount for such
Distribution Date multiplied by (b) the Group I

                                      -19-

<PAGE>

Allocation Percentage.

     "Group I Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) each scheduled payment of principal collected or advanced
on the Group I Mortgage Loans by the Servicer that were due during the related
Due Period, (ii) the principal portion of all partial and full principal
prepayments of the Group I Mortgage Loans applied by the Servicer during the
related Prepayment Period, (iii) the principal portion of all related Net
Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries received
during such Prepayment Period with respect to the Group I Mortgage Loans, (iv)
that portion of the Purchase Price, representing principal of any repurchased
Group I Mortgage Loan, deposited to the Collection Account during such
Prepayment Period, (v) the principal portion of any related Substitution
Adjustment Amounts deposited in the Collection Account during such Prepayment
Period with respect to the Group I Mortgage Loans and (vi) on the Distribution
Date on which the Trust Fund is to be terminated pursuant to Section 9.01, that
portion of the Termination Price, in respect of principal on the Group I
Mortgage Loans.

     "Group I Senior Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 56.50% and
(ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the excess of the aggregate Stated Principal
Balance of the Group I Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) over
$1,764,063.21.

     "Group II Allocation Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the Group II
Principal Remittance Amount for such Distribution Date, and the denominator of
which is the Principal Remittance Amount for such Distribution Date.

     "Group II Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group II Principal Remittance Amount
for such Distribution Date over (ii)(a) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by (b) the Group II
Allocation Percentage.

     "Group II Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group II
Mortgage Loans.

     "Group II Mortgage Loan": A Mortgage Loan assigned to Loan Group II with a
principal balance that conforms to Fannie Mae and Freddie Mac loan limits.

     "Group II Principal Distribution Amount": With respect to any Distribution
Date, the sum of (i) the Group II Basic Principal Distribution Amount for such
Distribution Date and (ii)(a) the Extra Principal Distribution Amount for such
Distribution Date multiplied by (b) the Group II

                                      -20-

<PAGE>

Allocation Percentage.

     "Group II Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) each scheduled payment of principal collected or advanced
on the Group II Mortgage Loans by the Servicer that were due during the related
Due Period, (ii) the principal portion of all partial and full principal
prepayments of the Group II Mortgage Loans applied by the Servicer during the
related Prepayment Period, (iii) the principal portion of all related Net
Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries received
during such Prepayment Period with respect to the Group II Mortgage Loans, (iv)
that portion of the Purchase Price, representing principal of any repurchased
Group II Mortgage Loan, deposited to the Collection Account during such
Prepayment Period, (v) the principal portion of any related Substitution
Adjustment Amounts deposited in the Collection Account during such Prepayment
Period with respect to the Group II Mortgage Loans and (vi) on the Distribution
Date on which the Trust Fund is to be terminated pursuant to Section 9.01, that
portion of the Termination Price, in respect of principal on the Group II
Mortgage Loans.

     "Group II Senior Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 56.50% and
(ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the excess of the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) over
$781,259.99.

     "Highest Priority": As of any date of determination, the Class of Mezzanine
Certificates then outstanding with a Certificate Principal Balance greater than
zero, with the highest priority for payments pursuant to Section 4.01, in the
following order: Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates.

     "Indenture": An indenture relating to the issuance of notes secured by the
Class CE Certificates, the Class P Certificates, the Class R and/or the Class
R-X Certificates (or any portion thereof) which may or may not be guaranteed by
the NIMS Insurer.

     "Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Servicer, the Depositor, the
Trustee, the Seller, the Originator and their respective Affiliates, (b) does
not have any direct financial interest in or any material indirect financial
interest in the Servicer, the Depositor, the Trustee, the Seller, the Originator
or any Affiliate thereof, and (c) is not connected with the Servicer, the
Depositor, the Trustee, the Seller, the Originator or any Affiliate thereof as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions; provided, however, that a Person shall not
fail to be Independent of the Servicer, the Depositor the Trustee, the Seller,
the Originator or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any class of securities issued by the
Servicer, the Depositor, the Trustee, the Seller, the Originator or any
Affiliate

                                      -21-

<PAGE>

thereof, as the case may be.

     "Independent Contractor": Either (i) any Person (other than the Servicer)
that would be an "independent contractor" with respect to REMIC I within the
meaning of Section 856(d)(3) of the Code if REMIC I were a real estate
investment trust (except that the ownership tests set forth in that section
shall be considered to be met by any Person that owns, directly or indirectly,
35% or more of any Class of Certificates), so long as REMIC I does not receive
or derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the
Servicer) if the Trustee has received an Opinion of Counsel to the effect that
the taking of any action in respect of any REO Property by such Person, subject
to any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.

     "Index": With respect to each Adjustable Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.

     "Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance policy, covering a Mortgage Loan, to the extent such proceeds are not
to be applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Servicer would
follow in servicing mortgage loans held for its own account, subject to the
terms and conditions of the related Mortgage Note and Mortgage.

     "Interest Determination Date": With respect to the Class A Certificates,
the Mezzanine Certificates, REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest
I-LTA4, REMIC I Regular Interest I- LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6 REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTM10, REMIC II Regular Interest II-LTA1, REMIC II
Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular
Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest
II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4,
REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6 REMIC II
Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular
Interest II-LTM9 and REMIC II Regular Interest II-LTM10 and any Accrual Period
therefor, the second London Business Day preceding the commencement of such
Accrual Period.

     "Late Collections": With respect to any Mortgage Loan and any Due Period,
all amounts received by the Servicer subsequent to the Determination Date
immediately following such Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.

                                      -22-

<PAGE>

     "Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage Loan
in respect of which the Servicer has determined, in its reasonable judgment, as
of the end of the related Prepayment Period, that all Liquidation Proceeds which
it expects to recover with respect to the liquidation of the Mortgage Loan or
disposition of the related REO Property have been recovered.

     "Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from REMIC I by reason of its being purchased, repurchased or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 9.01.

     "Liquidation Proceeds": The amount (other than amounts received in respect
of the rental of any REO Property prior to REO Disposition) received by the
Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, (ii) the
liquidation of a defaulted Mortgage Loan through a trustee's sale, foreclosure
sale or otherwise, or (iii) the purchase, repurchase or substitution of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.16(c), Section 3.23 or Section 9.01.

     "Loan-to-Value Ratio": As of any date of determination, the fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related Mortgage Loan at such date and the denominator of which is the Value
of the related Mortgaged Property.

     "Loan Group": Either Loan Group I or Loan Group II, as the context
requires.

     "Loan Group I": The group of Mortgage Loans identified in the Mortgage Loan
Schedule as having been assigned to Loan Group I.

     "Loan Group II": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group II.

     "London Business Day": Any day on which banks in the City of London and New
York are open and conducting transactions in United States dollars.

     "Loss Severity Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
principal balance of such Mortgage Loan immediately prior to the liquidation of
such Mortgage Loan.

     "Marker Rate": With respect to REMIC II Regular Interest LT-IICE and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the REMIC I Remittance Rate for each of REMIC I Regular Interests I-LTA1,
I-LTA2, I-LTM1, I-LTM2, I-LTM3, I-LTM4, I-LTM5, I-LTM6, I-LTM7, I-LTM8, I-LTM9,
I-LTM10 and I-LTZZ, with the rate on each such REMIC I Regular Interest (other
than REMIC I Regular Interest I-LTZZ) subject to a cap equal

                                      -23-

<PAGE>

to the greater of (x) the lesser of (a) One-Month LIBOR plus the related margin
and (b) the related Net WAC Rate and (y) the lesser of (a) One-Month LIBOR plus
2.50% (with respect to REMIC I Regular Interests I-LTA1 and I-LTA2) and
2.76715549% (with respect to REMIC I Regular Interests I-LTM1, I-LTM2, I-LTM3,
I-LTM4, I-LTM5, I-LTM6, I-LTM7, I-LTM8, I-LTM9, I- LTM10) and (b) the related
Net WAC Rate for the purpose of this calculation and with the rate on REMIC I
Regular Interest I-LTZZ subject to a cap of zero for the purpose of this
calculation; provided, however, that solely for this purpose, calculations of
the REMIC I Remittance Rate and the related caps with respect to such REMIC I
Regular Interests (other than REMIC I Regular Interest I-LTZZ) shall be
multiplied by a fraction, the numerator of which is the actual number of days
elapsed in the related Accrual Period and the denominator of which is 30.

     "Maximum Cap Rate": For any Distribution Date with respect to the Class A
Certificates and the Mezzanine Certificates, a per annum rate equal to the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Mortgage
Loans multiplied by a fraction, the numerator of which is 30 and the denominator
of which is the actual number of days elapsed in the related Accrual Period.

     "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With respect to
any Distribution Date, the excess of (i) accrued interest at the REMIC I
Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC I Regular Interest
I-LTM10 for such Distribution Date, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the greater of (x) the lesser of (a)
One-Month LIBOR plus the related margin and (b) the related Net WAC Rate and (y)
the lesser of (a) One-Month LIBOR plus 2.50% (with respect to REMIC I Regular
Interests I-LTA1 and I-LTA2) and 2.76715549% (with respect to REMIC I Regular
Interests I-LTM1, I-LTM2, I-LTM3, I-LTM4, I-LTM5, I-LTM6, I-LTM7, I-LTM8,
I-LTM9, I-LTM10) and (b) the related Net WAC Rate; provided, however, each cap
shall be multiplied by a fraction, the numerator of which is the actual number
of days elapsed in the related Accrual Period and the denominator of which is
30.

     "Maximum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate thereunder.

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

     "MERS(R) System": The system of recording transfers of Mortgages
electronically maintained by MERS.

     "MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.

                                      -24-

<PAGE>

     "MOM Loan": With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.

     "Mezzanine Cap Contract": The cap contract between the Trustee and the
counterparty thereunder relating to the Mezzanine Certificates.

     "Mezzanine Certificate": Any Class M-1 Certificate, Class M-2 Certificate,
Class M- 3 Certificate, Class M-4 Certificates, Class M-5 Certificates, Class
M-6 Certificate, Class M-7 Certificate, Class M-8 Certificate, Class M-9
Certificate or Class M-10 Certificate.

     "Minimum Mortgage Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.

     "Monthly Interest Distributable Amount": With respect to the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class CE Certificates) of such Class
immediately prior to such Distribution Date, reduced by any Prepayment Interest
Shortfalls (to the extent not covered by payments made by the Servicer pursuant
to Section 3.24) and Relief Act Interest Shortfalls (allocated to such
Certificate based on its respective entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date).

     "Monthly Payment": With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
Servicer pursuant to Section 3.07 and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.

     "Monthly Statement": The statement prepared by the Trustee pursuant to
Section 4.02.

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

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

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

                                      -25-

<PAGE>

     "Mortgage Loan": Each mortgage loan transferred and assigned to the Trustee
and delivered to the Trustee pursuant to Section 2.01 or Section 2.03(b) of this
Agreement, as held from time to time as a part of the Trust, the Mortgage Loans
so held being identified in the Mortgage Loan Schedule.

     "Mortgage Loan Purchase Agreement": The agreement among the Seller and the
the Depositor, regarding the sale of the Mortgage Loans by the Seller to the
Depositor, substantially in the form of Exhibit D annexed hereto.

     "Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC I on such date, attached hereto as Schedule 1. The Mortgage
Loan Schedule shall set forth the following information with respect to each
Mortgage Loan:

          (1) the Mortgage Loan identifying number;

          (2) [reserved];

          (3) the state and zip code of the Mortgaged Property;

          (4) a code indicating whether the Mortgaged Property was represented
     by the borrower, at the time of origination, as being owner-occupied;

          (5) the type of Residential Dwelling constituting the Mortgaged
     Property;

          (6) the original months to maturity;

          (7) the stated remaining months to maturity from the Cut-off Date
     based on the original amortization schedule;

          (8) the Loan-to-Value Ratio at origination;

          (9) the Mortgage Rate in effect immediately following the Cut-off
     Date;

          (10) the date on which the first Monthly Payment was due on the
     Mortgage Loan;

          (11) the stated maturity date;

          (12) the amount of the Monthly Payment at origination;

          (13) the amount of the Monthly Payment due on the first Due Date after
     the Cut- off Date;

          (14) the last Due Date on which a Monthly Payment was actually applied
     to the unpaid Stated Principal Balance;

          (15) the original principal amount of the Mortgage Loan;

                                      -26-

<PAGE>

          (16) the Stated Principal Balance of the Mortgage Loan as of the close
     of business on the Cut-off Date;

          (17) a code indicating the purpose of the Mortgage Loan (I.E.,
     purchase financing, rate/term refinancing, cash-out refinancing);

          (18) the Mortgage Rate at origination;

          (19) a code indicating the documentation program (I.E., full
     documentation, limited documentation, stated income documentation);

          (20) the risk grade;

          (21) the Value of the Mortgaged Property;

          (22) the sale price of the Mortgaged Property, if applicable;

          (23) the actual unpaid principal balance of the Mortgage Loan as of
     the Cut-off Date;

          (24) the type and term of the related Prepayment Charge;

          (25) the rounding code;

          (26) the program code;

          (27) a code indicating the lien priority for Mortgage Loans;

          (28) with respect to each Adjustable Rate Mortgage Loan, the Minimum
     Mortgage Rate, the Maximum Mortgage Rate, the Gross Margin, the next
     Adjustment Date and the Periodic Rate Cap;

          (29) the credit score ("FICO") of such Mortgage Loan; and

          (30) the total amount of points and fees charged such Mortgage Loan.

     The Mortgage Loan Schedule shall set forth the following information with
respect to the Mortgage Loans in the aggregate and for each Loan Group as of the
Cut-off Date: (1) the number of Mortgage Loans (separately identifying the
number of Fixed-Rate Mortgage Loans and the number of Adjustable-Rate Mortgage
Loans); (2) the current Principal Balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans and (4) the weighted
average maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be
amended from time to time by the Depositor in accordance with the provisions of
this Agreement. With respect to any Qualified Substitute Mortgage Loan, the
Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan,
determined in accordance with the definition of Cut-off Date herein.

                                      -27-

<PAGE>

     "Mortgage Note": The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.

     "Mortgage Pool": The pool of Mortgage Loans, identified on Schedule 1 and
existing from time to time thereafter, and any REO Properties acquired in
respect thereof.

     "Mortgage Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate with respect to the
Adjustable-Rate Mortgage Loans, (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following
the Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to
the nearest or next highest 0.125% as provided in the Mortgage Note, of the
Index, as most recently available as of a date prior to the Adjustment Date as
set forth in the related Mortgage Note, plus the related Gross Margin; provided
that the Mortgage Rate on such Adjustable-Rate Mortgage Loan on any Adjustment
Date shall never be more than the lesser of (i) the sum of the Mortgage Rate in
effect immediately prior to the Adjustment Date plus the related Periodic Rate
Cap, if any, and (ii) the related Maximum Mortgage Rate, and shall never be less
than the greater of (i) the Mortgage Rate in effect immediately prior to the
Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related Minimum
Mortgage Rate. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance with
the immediately preceding sentence as of the date such Mortgage Loan became an
REO Property.

     "Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.

     "Mortgagor": The obligor on a Mortgage Note.

     "Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property (including REO Property) the
related Liquidation Proceeds and Insurance Proceeds net of Advances, Servicing
Advances, Servicing Fees and any other accrued and unpaid servicing fees
received and retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property.

     "Net Monthly Excess Cashflow": With respect to each Distribution Date, the
sum of (a) any Overcollateralization Release Amount for such Distribution Date
and (b) the excess of (x) Available Funds for such Distribution Date over (y)
the sum for such Distribution Date of (A) the Monthly Interest Distributable
Amounts for the Class A Certificates and the Mezzanine Certificates, (B) the
Unpaid Interest Shortfall Amounts for the Class A Certificates and (C) the
Principal Remittance Amount.

     "Net Mortgage Rate": With respect to any Mortgage Loan (or the related REO
Property) as of any date of determination, a per annum rate of interest equal to
the then applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee
Rate.

                                      -28-

<PAGE>

     "Net WAC Rate": For any Distribution Date with respect to the Class A-1
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Mortgage Rates of the Group I Mortgage Loans, weighted based
on their outstanding Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Accrual Period. For federal income
tax purposes, with respect to REMIC III, the economic equivalent of such rate
shall be expressed as the weighted average of the maximum REMIC II Remittance
Rate on REMIC II Regular Interest II-LTA1, weighted on the basis of the
Uncertificated Balance of such REMIC II Regular Interest. For federal income tax
purposes, with respect to REMIC II, the economic equivalent of such rate shall
be expressed as the weighted average of the REMIC I Remittance Rate on REMIC I
Regular Interest I-LT1GRP, weighted on the basis of the Uncertificated Balance
of such REMIC I Regular Interest.

     For any Distribution Date with respect to the Class A-2 Certificates, a per
annum rate equal to the product of (x) the weighted average of the Adjusted Net
Mortgage Rates of the Group II Mortgage Loans, weighted based on their
outstanding Principal Balances as of the first day of the calendar month
preceding the month in which the Distribution Date occurs and (y) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days elapsed in the related Accrual Period. For federal income tax purposes,
with respect to REMIC III, the economic equivalent of such rate shall be
expressed as the weighted average of the maximum REMIC II Remittance Rate on
REMIC II Regular Interest II-LTA2, weighted on the basis of the Uncertificated
Balance of such REMIC II Regular Interest. For federal income tax purposes, with
respect to REMIC II, the economic equivalent of such rate shall be expressed as
the weighted average of the REMIC I Remittance Rate on REMIC I Regular Interest
I-LT2GRP, weighted on the basis of the Uncertificated Balance of such REMIC I
Regular Interest.

     For any Distribution Date with respect to the Mezzanine Certificates, a per
annum rate equal to the product of (x) the weighted average of the Adjusted Net
Mortgage Rates of the Group I Mortgage Loans and the Group II Mortgage Loans,
weighted in proportion to the results of subtracting from the aggregate Stated
Principal Balance of each Loan Group the Certificate Principal Balance of the
related Class of Class A Certificates and (y) for each Class of Mezzanine
Certificates, a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days elapsed in the related Accrual Period. For
federal income tax purposes, with respect to REMIC III, the economic equivalent
of such rate shall be expressed as the weighted average of the maximum REMIC II
Remittance Rate on each of REMIC II Regular Interest II-LTM1, REMIC II Regular
Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest
II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6,
REMIC II Regular Interest II- LTM7, REMIC II Regular Interest II-LTM8, REMIC II
Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, weighted on the
basis of the Uncertificated Balance of such REMIC II Regular Interest. For
federal income tax purposes, with respect to REMIC II, the economic equivalent
of such rate shall be expressed as the weighted average of the REMIC I
Remittance Rates on (a) REMIC I Regular Interest I-LT1SUB, subject to a cap and
a floor equal to the Adjusted Net Mortgage Rates of the Group I Mortgage Loans
and (b) REMIC I Regular Interest I-LT2SUB, subject to a cap and a floor equal to
the Adjusted Net Mortgage Rates of the Group II Mortgage Loans, weighted on the
basis of the Uncertificated Balance of each such REMIC I Regular Interest.

                                      -29-

<PAGE>

     "Net WAC Rate Carryover Amount": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, the sum of (A) the
positive excess of (i) the amount of interest accrued on such Class of
Certificates on such Distribution Date calculated at the related Formula Rate,
over (ii) the amount of interest accrued on such Class of Certificates at the
Net WAC Rate for such Distribution Date and (B) the Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the Formula Rate for such Class of
Certificates for such Distribution Date and for such Accrual Period.

     "Net WAC Rate Carryover Reserve Account": The account established and
maintained pursuant to Section 4.07.

     "New Lease": Any lease of REO Property entered into on behalf of REMIC I,
including any lease renewed or extended on behalf of REMIC I, if REMIC I has the
right to renegotiate the terms of such lease.

     "NIMS Insurer": Any insurer that is guaranteeing certain payments under
notes secured by collateral which includes all or a portion of the Class CE
Certificates, the Class P Certificates, the Class R and/or the Class R-X
Certificates.

     "Nonrecoverable Advance": Any Advance previously made or proposed to be
made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment of the Servicer, will not or, in the case of a proposed
Advance, would not, be ultimately recoverable from related Late Collections,
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
as provided herein.

     "Nonrecoverable Servicing Advance": Any Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Servicer, will not or, in the case of a
proposed Servicing Advance, would not, be ultimately recoverable from related
Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage
Loan or REO Property as provided herein.

     "Non-United States Person": Any Person other than a United States Person.

     "Notional Amount": The "Notional Amount" with respect to the Class A-IO1
Component immediately prior to any Distribution Date will be equal to the
aggregate Principal Balance of the Group I Mortgage Loans (prior to giving
effect to scheduled payments of principal received during the related Due Period
and unscheduled collections of principal received during the related Prepayment
Period). The Notional Amount with respect to the Class A-IO2 Component
immediately prior to any Distribution Date will be equal to the aggregate
Principal Balance of the Group II Mortgage Loans (prior to giving effect to
scheduled payments of principal received during the related Due Period and
unscheduled collections of principal received during the related Prepayment
Period). For federal income tax purposes, the Notional Amount of the Class A-IO
Certificates will equal the sum of the Uncertificated Notional Amount of the
REMIC III A-IO Components.

     "Officer's Certificate": A certificate signed by the Chairman of the Board,
the Vice

                                      -30-

<PAGE>

Chairman of the Board, the President or a vice president (however denominated),
and by the Treasurer, the Secretary, or one of the assistant treasurers or
assistant secretaries of the Servicer, the Originator, the Seller or the
Depositor, as applicable.

     "One-Month LIBOR": With respect to the Class A Certificates, the Mezzanine
Certificates, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2,
REMIC I Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest I-LTM10, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest
II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4,
REMIC II Regular Interest II- LTM1, REMIC II Regular Interest II-LTM2, REMIC II
Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular
Interest II-LTM5, REMIC II Regular Interest II-LTM6 REMIC II Regular Interest
II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II- LTM9
and REMIC II Regular Interest II-LTM10 and any Accrual Period therefor, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the offered rate for one-month U.S. dollar deposits, as such rate
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the offered
rates of the Reference Banks for one-month U.S. dollar deposits, as of 11:00
a.m. (London time) on such Interest Determination Date. In such event, the
Trustee will request the principal London office of each of the Reference Banks
to provide a quotation of its rate. If on such Interest Determination Date, two
or more Reference Banks provide such offered quotations, One-Month LIBOR for the
related Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16%). 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) LIBOR as determined on the previous Interest Determination Date
and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an Interest Determination Date would be
based on LIBOR for the previous Interest Determination Date for the third
consecutive Interest Determination Date, the Trustee shall select, after
consultation with the NIMS Insurer, an alternative comparable index (over which
the Trustee has no control), used for determining one-month Eurodollar lending
rates that is calculated and published (or otherwise made available) by an
independent party.

     "Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, the Seller or the Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any Trust REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.

     "Original Mortgage Loan": Any of the Mortgage Loans included in REMIC I as
of the Closing Date.

     "Originator": Fremont Investment & Loan, a California state chartered
industrial bank.

                                      -31-

<PAGE>

     "Overcollateralization Deficiency Amount": With respect to any Distribution
Date, the amount, if any, by which the Overcollateralization Target Amount
exceeds the Overcollateralized Amount on such Distribution Date (after giving
effect to distributions in respect of the Group I Basic Principal Distribution
Amount and the Group II Basic Principal Distribution Amount on such Distribution
Date).

     "Overcollateralization Release Amount": With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the Excess Overcollateralized Amount.

     "Overcollateralization Target Amount": With respect to any Distribution
Date, (i) approximately 2.10% of the Cut-off Date Principal Balance of the
Mortgage Loans, (ii) on or after the Stepdown Date provided a Trigger Event is
not in effect, the greater of (x) approximately 4.20% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (y)
$2,545,323.20, or (iii) on or after the Stepdown Date if a Trigger Event is in
effect, the Overcollateralization Target Amount for the immediately preceding
Distribution Date.

     "Overcollateralized Amount": For any Distribution Date, the amount equal to
(i) the aggregate Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) as of the related Determination Date minus (ii) the sum of the aggregate
Certificate Principal Balance of the Class A Certificates, the Mezzanine
Certificates and the Class P Certificates as of such Distribution Date after
giving effect to distributions to be made on such Distribution Date.

     "Ownership Interest": As to any Certificate, any ownership or security
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, as owner or as pledgee.

     "Pass-Through Rate": With respect to the Class A Certificates and the
Mezzanine Certificates and any Distribution Date, a rate per annum equal to the
lesser of (i) the related Formula Rate for such Distribution Date and (ii) the
related Net WAC Rate for such Distribution Date. With respect to the Class A-IO
Certificates, the greater of (i) 0.00% and (ii) 2.50% minus one-month LIBOR. For
federal income tax purposes, the Class A-IO Certificates will not have a
Pass-Through Rate, but will be entitled to 100% of the interest distributable on
each REMIC III A-IO Component. With respect to the Class CE Interest, 100% of
the interest distributable to REMIC II Regular Interest II-LTCE, expressed as a
per annum rate. With respect to the Class CE Certificates, 100% of the interest
distributable to the Class CE Interest, expressed as a per annum rate.

     "Percentage Interest": With respect to any Class of Certificates (other
than the Residual Certificates), the undivided percentage ownership in such
Class evidenced by such Certificate, expressed as a percentage, the numerator of
which is the initial Certificate Principal

                                      -32-

<PAGE>

Balance or Notional Amount represented by such Certificate and the denominator
of which is the aggregate initial Certificate Principal Balance or Notional
Amount of all of the Certificates of such Class. The Class A Certificates and
the Mezzanine Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $25,000 and
integral multiples of $1.00 in excess thereof. The Class P Certificates are
issuable only in Percentage Interests corresponding to initial Certificate
Principal Balances of $20 and integral multiples thereof. The Class CE
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $10,000 and integral multiples
of $1.00 in excess thereof; provided, however, that a single Certificate of each
such Class of Certificates may be issued having a Percentage Interest
corresponding to the remainder of the aggregate initial Certificate Principal
Balance or Notional Amount of such Class or to an otherwise authorized
denomination for such Class plus such remainder. With respect to any Residual
Certificate, the undivided percentage ownership in such Class evidenced by such
Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and multiples thereof.

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

     "Permitted Investments": Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued or managed by the Depositor, the Servicer, the NIMS Insurer, the
Trustee or any of their respective Affiliates or for which an Affiliate of the
NIMS Insurer or the Trustee serves as an advisor:

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

          (ii) (A) demand and time deposits in, certificates of deposit of,
     bankers' acceptances issued by or federal funds sold by any depository
     institution or trust company (including the Trustee or its agent acting in
     their respective commercial capacities) incorporated under the laws of the
     United States of America or any state thereof and subject to supervision
     and examination by federal and/or state authorities, so long as, at the
     time of such investment or contractual commitment providing for such
     investment, such depository institution or trust company (or, if the only
     Rating Agency is S&P, in the case of the principal depository institution
     in a depository institution holding company, debt obligations of the
     depository institution holding company) or its ultimate parent has a
     short-term uninsured debt rating in the highest available rating category
     of Moody's, Fitch and S&P and provided that each such investment has an
     original maturity of no more than 365 days; and provided further that, if
     the only Rating Agency is S&P and if the depository or trust company is a
     principal subsidiary of a bank holding company and the debt obligations of
     such subsidiary are not separately rated, the applicable rating shall be
     that of the bank holding company; and, provided further that, if the
     original maturity of such short-term obligations of a domestic

                                      -33-

<PAGE>

     branch of a foreign depository institution or trust company shall exceed 30
     days, the short- term rating of such institution shall be "A-1+" in the
     case of S&P if S&P is the Rating Agency; and (B) any other demand or time
     deposit or deposit which is fully insured by the FDIC;

          (iii) repurchase obligations with a term not to exceed 30 days with
     respect to any security described in clause (i) above and entered into with
     a depository institution or trust company (acting as principal) rated
     "A-1+" or higher by S&P, "F-1+" or higher by Fitch and "A2" or higher by
     Moody's, provided, however, that collateral transferred pursuant to such
     repurchase obligation must be of the type described in clause (i) above and
     must (A) be valued daily at current market prices plus accrued interest,
     (B) pursuant to such valuation, be equal, at all times, to 105% of the cash
     transferred by the Trustee in exchange for such collateral and (C) be
     delivered to the Trustee or, if the Trustee is supplying the collateral, an
     agent for the Trustee, in such a manner as to accomplish perfection of a
     security interest in the collateral by possession of certificated
     securities;

          (iv) securities bearing interest or sold at a discount that are issued
     by any corporation incorporated under the laws of the United States of
     America or any State thereof and that are rated by a Rating Agency in its
     highest long-term unsecured rating category at the time of such investment
     or contractual commitment providing for such investment;

          (v) commercial paper (including both non-interest-bearing discount
     obligations and interest-bearing obligations payable on demand or on a
     specified date not more than 30 days after the date of acquisition thereof)
     that is rated by a Rating Agency in its highest short- term unsecured debt
     rating available at the time of such investment;

          (vi) units of money market funds, including those managed or advised
     by the Trustee or its Affiliates, that have been rated "AAA" by S&P, "AAA"
     by Fitch (if so rated by Fitch) and "Aaa" by Moody's; and

          (vii) if previously confirmed in writing to the Trustee and consented
     to by the NIMS Insurer, any other demand, money market or time deposit, or
     any other obligation, security or investment, as may be acceptable to the
     Rating Agencies in writing as a permitted investment of funds backing
     securities having ratings equivalent to its highest initial rating of the
     Class A Certificates;

provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.

     "Permitted Transferee": Any Transferee of a Residual Certificate other than
a Disqualified Organization or Non-United States Person.

     "Person": Any individual, corporation, partnership, limited liability
company, joint

                                      -34-

<PAGE>

venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Keogh
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.

     "Prepayment Assumption": As defined in the Prospectus Supplement.

     "Prepayment Charge": With respect to any Prepayment Period, any prepayment
premium, fee, penalty or charge payable by a Mortgagor in connection with any
full or partial Principal Prepayment on a Mortgage Loan pursuant to the terms of
the related Mortgage Note (other than any Servicer Prepayment Charge Payment
Amount).

     "Prepayment Charge Schedule": As of any date, the list of Prepayment
Charges on the Mortgage Loans included in REMIC I on such date, attached hereto
as Schedule 2 (including the Prepayment Charge Summary attached thereto). The
Prepayment Charge Schedule shall set forth the following information with
respect to each related Mortgage Loan:

          (i) the Mortgage Loan identifying number;

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

          (iii) the state of origination of the related Mortgage Loan;

          (iv) the date on which the first monthly payment was due on the
     related Mortgage Loan;

          (v) the term of the related Mortgage Loan; and

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

     The Prepayment Charge Schedule shall be amended from time to time by the
Depositor in accordance with the provisions of this Agreement and a copy of such
amended Prepayment Charge Schedule shall be furnished by the Depositor to the
NIMS Insurer.

     "Prepayment Interest Excess": With respect to any Distribution 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 and
the fifteenth day of the calendar month in which such Distribution Date occurs,
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 Distribution
Date occurs and ending on the date on which such prepayment is so applied.

                                      -35-

<PAGE>

     "Prepayment Interest Shortfall": With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in full during
the portion of the related Prepayment Period occurring from the first day of the
related Prepayment Period through the last day of the calendar month preceding
the month in which such Distribution Date occurs, an amount equal to one month's
interest on the Mortgage Loan less any payments in respect of interest for such
month made by the related Mortgagor.

     "Prepayment Period": With respect to any Distribution Date and any
Principal Prepayment in full, the period commencing on the 16th day of the
calendar month preceding the calendar month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, commencing on July 1,
2004) and ending on the 15th day of the calendar month in which such
Distribution Date occurs and for any Distribution Date and any Principal
Prepayment in part, the calendar month preceding the month in which such
Distribution Date occurs.

     "Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus
all collections credited against the Cut-off Date Principal Balance of any such
Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any day,
the Principal Balance of the related Mortgage Loan immediately prior to such
Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.

     "Principal Prepayment": Any payment of principal made by the Mortgagor on a
Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.

     "Principal Remittance Amount": With respect to any Distribution Date, the
sum of the Group I Principal Remittance Amount and the Group II Principal
Remittance Amount.

     "Prospectus Supplement": That certain Prospectus Supplement dated July 26,
2004 relating to the public offering of the Class A Certificates and the
Mezzanine Certificates.

     "PTCE": A Prohibited Transaction Class Exemption issued by the United
States Department of Labor which provides that exemptive relief is available to
any party to any transaction which satisfies the conditions of the exemption.

     "Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as confirmed by an Officer's Certificate from the Servicer and
to the Trustee an amount equal to the sum of (i) 100% of the Stated Principal
Balance thereof as of the date of purchase (or such other price as provided in
Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Servicer, which payment or advance had as of
the date of purchase been distributed pursuant to

                                      -36-

<PAGE>

Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Servicer through the end of the calendar
month immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of purchase had been distributed as or to cover
REO Imputed Interest pursuant to Section 4.01, (iii) any unreimbursed Servicing
Advances and Advances (including Nonrecoverable Advances and Nonrecoverable
Servicing Advances) and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from the Collection
Account in respect of such Mortgage Loan or REO Property pursuant to Section
3.11(a)(ix) and Section 3.16(b), and (v) in the case of a Mortgage Loan required
to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be
incurred by the Servicer, the NIMS Insurer or the Trustee in respect of the
breach or defect giving rise to the purchase obligation including any costs and
damages incurred by the Trust in connection with any violation by such loan of
any predatory or abusive lending law.

     "Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding Principal Balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the Principal Balance of
the Deleted Mortgage Loan as of the Due Date in the calendar month during which
the substitution occurs, (ii) have a Mortgage Rate not less than (and not more
than one percentage point in excess of) the Mortgage Rate of the Deleted
Mortgage Loan, (iii) with respect to any Adjustable- Rate Mortgage Loan, have a
Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted
Mortgage Loan, (iv) with respect to any Adjustable-Rate Mortgage Loan, have a
Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted
Mortgage Loan, (v) with respect to any Adjustable-Rate Mortgage Loan, have a
Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi) with
respect to any Adjustable-Rate Mortgage Loan, have a next Adjustment Date not
more than two months later than the next Adjustment Date on the Deleted Mortgage
Loan, (vii) have a remaining term to maturity not greater than (and not more
than one year less than) that of the Deleted Mortgage Loan, (viii) have the same
Due Date as the Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value
Ratio as of the date of substitution equal to or lower than the Loan-to-Value
Ratio of the Deleted Mortgage Loan as of such date, (x) have a risk grading
determined by the Originator at least equal to the risk grading assigned on the
Deleted Mortgage Loan, (xi) have a Prepayment Charge provision at least equal to
the Prepayment Charge provision in the Deleted Mortgage Loan, (xii) [reserved]
and (xiii) conform to each representation and warranty set forth in Section 6 of
the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In
the event that one or more mortgage loans are substituted for one or more
Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Rates
described in clause (ii) hereof shall be determined on the basis of weighted
average Mortgage Rates, the terms described in clause (vii) hereof shall be
determined on the basis of weighted average remaining term to maturity, the
Loan-to- Value Ratios described in clause (ix) hereof shall be satisfied as to
each such mortgage loan, the risk

                                      -37-

<PAGE>

gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xi) hereof must be satisfied
as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case
may be.

     "Rating Agency or Rating Agencies": Moody's, Fitch and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicer.

     "Realized Loss": With respect to any Liquidated Mortgage Loan or any
Mortgage Loan charged off by the Servicer pursuant to this Agreement, the amount
of loss realized equal to the portion of the Stated Principal Balance remaining
unpaid after application of all Net Liquidation Proceeds in respect of such
Mortgage Loan. If the Servicer receives Subsequent Recoveries with respect to
any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage
Loan will be reduced to the extent such recoveries are applied to principal
distributions on any Distribution Date.

     "Record Date": With respect to each Distribution Date and any Book-Entry
Certificate, the Business Day immediately preceding such Distribution Date. With
respect to each Distribution Date and any other Certificates, including any
Definitive Certificates, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs.

     "Reference Banks": Bankers Trust Company, Barclay's Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Trustee
(after consultation with the NIMS Insurer) which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Depositor or any Affiliate thereof and (iii)
which have been designated as such by the Trustee.

     "Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.

     "Regular Certificate": Any Class A Certificate, Class A-IO Certificate,
Mezzanine Certificate, Class CE Certificate or Class P Certificate.

     "Regular Interest": A "regular interest" in a REMIC within the meaning of
Section 860G(a)(1) of the Code.

     "Relief Act": The Servicemembers Civil Relief Act.

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

                                      -38-

<PAGE>

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

     "REMIC I": The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made, consisting of: (i) such Mortgage Loans and
Prepayment Charges as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto, and together with all collections
thereon and proceeds thereof; (ii) any REO Property, together with all
collections thereon and proceeds thereof; (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies, required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby); and (v) the Collection Account (other than
any amounts representing any Servicer Prepayment Charge Payment Amount), the
Distribution Account (other than any amounts representing any Servicer
Prepayment Charge Payment Amount) and any REO Account, and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto. Notwithstanding
the foregoing, however, REMIC I specifically excludes the Net WAC Rate Carryover
Reserve Account, the Cap Contracts, all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date
and all Prepayment Charges payable in connection with Principal Prepayments made
before the Cut-off Date.

     "REMIC I Interest Loss Allocation Amount": With respect to any Distribution
Date, an amount (subject to adjustment based on the actual number of days
elapsed in the respective Accrual Periods for the indicated Regular Interests
for such Distribution Date) equal to (a) the product of (i) 50% of the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest I-
LTAA minus the Marker Rate, divided by (b) 12.

     "REMIC I Marker Allocation Percentage": 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I- LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular Interest I-LTZZ and
REMIC I Regular Interest I-LTP

     "REMIC I Overcollateralized Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Balance of the REMIC I
Regular Interests minus (ii) the aggregate Uncertificated Balance of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTM10 and REMIC I Regular Interest I-LTP, in each case as of such date of
determination.

                                      -39-

<PAGE>

     "REMIC I Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) 50% of the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate Uncertificated Balance of REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6 REMIC I
Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular
Interest I-LTM9 and REMIC I Regular Interest I-LTM10 and the denominator of
which is the aggregate Uncertificated Balance of REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7, Interest I- LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular Interest I-LTM10 and REMIC I Regular Interest
I-LTZZ.

     "REMIC I Regular Interest": Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular
interest" in REMIC I. Each REMIC I Regular Interest shall accrue interest at the
related REMIC I Remittance Rate in effect from time to time, and shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto. The designations for the
respective REMIC I Regular Interests are set forth in the Preliminary Statement
hereto.

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

     "REMIC I Regular Interest I-LTA1": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTA2": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM1": One of the separate non-certificated
beneficial

                                      -40-

<PAGE>

ownership interests in REMIC I issued hereunder and designated as a Regular
Interest in REMIC I. REMIC I Regular Interest I-LTM1 shall accrue interest at
the related REMIC I Remittance Rate in effect from time to time, and shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM2": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM3": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM4": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM5": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM5 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM6": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM6 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM7": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM7 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in

                                      -41-

<PAGE>

the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM8": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM8 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM9": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM9 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTM10": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTM10 shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LTP": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LTP shall be entitled to
any Prepayment Charges collected by the Servicer and to a distribution of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Balance as set forth in the Preliminary
Statement hereto.

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

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

     "REMIC I Regular Interest I-LT1GRP": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT1GRP shall accrue
interest at the related REMIC I

                                      -42-

<PAGE>

Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

     "REMIC I Regular Interest I-LT1SUB": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT1SUB shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LT2GRP": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT2GRP shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Regular Interest I-LT2SUB": One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT2SUB shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC I Remittance Rate": With respect to REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I- LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest I-LTM10, REMIC I Regular Interest I-LTZZ, REMIC I Regular Interest
I-LTP, REMIC I Regular Interest I-LT1SUB, REMIC I Regular Interest I-LT2SUB and
REMIC I Regular Interest I-LTXX, the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans. With respect to REMIC I Regular Interest
I-LT1GRP, the weighted average of the Adjusted Net Mortgage Rates of the Group I
Mortgage Loans. With respect REMIC I Regular Interest I- LT2GRP, the weighted
average of the Adjusted Net Mortgage Rates of the Group II Mortgage Loans.

     "REMIC I Subordinated Balance Ratio": The ratio among the Uncertificated
Balance of each REMIC I Regular Interest ending with the designation "SUB,",
equal to the ratio among, with respect to each such REMIC I Regular Interest,
the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans
in the related Loan Group over (y) the current Certificate Principal Balance of
the Class A Certificates in the related Loan Group.

     "REMIC I Sub WAC Allocation Percentage": 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest I-

                                      -43-

<PAGE>

LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB,
REMIC I Regular Interest I-LT2GRP, REMIC I Regular Interest I-LT3SUB, REMIC I
Regular Interest I- LT3GRP and REMIC I Regular Interest I-LTXX.

     "REMIC I Required Overcollateralized Amount": 1.00% of the
Overcollateralization Target Amount.

     "REMIC II": The segregated pool of assets consisting of all of the REMIC I
Regular Interests conveyed in trust to the Trustee, for the benefit of the REMIC
II Regular Interests pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.

     "REMIC II Regular Interest": Any of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
"regular interest" in REMIC II. Each REMIC II Regular Interest shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto. The designations for
the respective REMIC II Regular Interests are set forth in the Preliminary
Statement hereto.

     "REMIC II Regular Interest II-LTA1": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTA1 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTA2": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTA2 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM1": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM1 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in

     "REMIC II Regular Interest II-LTM2": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM2 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in

                                      -44-

<PAGE>

the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM3": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM3 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM4": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM4 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM5": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM5 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM6": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM6 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM7": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM7 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM8": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM8 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM9": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC

                                      -45-

<PAGE>

II. REMIC II Regular Interest II-LTM9 shall accrue interest at the related REMIC
II Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTM10": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTM10 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

     "REMIC II Regular Interest II-LTCE": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTCE shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time on
it's Uncertificated Notional Amount, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Balance as set forth in the Preliminary
Statement hereto.

     "REMIC II Regular Interest II-LTP": One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest II-LTP shall be entitled
to any Prepayment Charges collected by the Servicer and to a distribution of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Balance as set forth in the Preliminary
Statement hereto.

     "REMIC II Remittance Rate": With respect to REMIC II Regular Interest
II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTM1,
REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II
Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular
Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest
II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest
II-LTM10, the greater of (x) the lesser of (a) One-Month LIBOR plus the related
margin and (b) the related Net WAC Rate and (y) the lesser of (a) One-Month
LIBOR plus 2.50% (with respect to REMIC II Regular Interests II-LTA1 and
II-LTA2) and 2.76715549% (with respect to REMIC II Regular Interests II-LTM1,
II-LTM2, II-LTM3, II-LTM4, II-LTM5, II-LTM6, II-LTM7, II-LTM8, II-LTM9,
II-LTM10) and (b) the related Net WAC Rate With respect to REMIC II Regular
Interest II-LTP, the weighted average of the REMIC I Remittance Rate on REMIC I
Regular Interest I-LTP, weighted on the basis of the Uncertificated Balance of
such REMIC I Regular Interest. With respect to REMIC II Regular Interest II-LTCE
and any Distribution Date, a rate per annum equal to the percentage equivalent
of a fraction, the numerator of which is the sum of the amounts calculated
pursuant to clauses (A) through (O) below, and the denominator of which is the
aggregate Uncertificated Balance of REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTA1, I- REMIC I Regular Interest LTA2, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I- LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTM10 and REMIC I Regular Interest I-LTZZ. For purposes of calculating the
Pass-Through Rate for the

                                      -46-

<PAGE>

Class CE Interest, the numerator is equal to the sum of the following
components:

          (A) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTAA
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTAA;

          (B) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA1
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTA1;

          (C) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA2
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTA2;

          (D) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM1
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM1;

          (E) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM2
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM2;

          (F) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM3
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM3;

          (G) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM4
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM4;

          (H) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM5
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM5;

          (I) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM6
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM6;

          (J) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM7
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM7;

          (K) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM8
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM8;

                                      -47-

<PAGE>

          (L) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM9
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM9;

          (M) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTM10
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTM10;

          (N) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTZZ
     minus the Marker Rate, applied to an amount equal to the Uncertificated
     Balance of REMIC I Regular Interest I-LTZZ; and

          (O) 100% of the interest on REMIC I Regular Interest I-LTP.

     "REMIC III": The segregated pool of assets consisting of all of the REMIC
II Regular Interests conveyed in trust to the Trustee, for the benefit of the
REMIC III Certificateholders pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.

     "REMIC III A-IO Component": Any of the twelve REMIC III A-IO Components
(REMIC III A-IO-A1 Component, REMIC III A-IO-A2, REMIC III A-IO-M1 Component,
REMIC III A-IO-M2 Component, REMIC III A-IO-M3 Component, REMIC III A-IO-M4
Component, REMIC III A-IO-M5 Component, REMIC III A-IO-M6 Component, REMIC III
A-IO-M7 Component, REMIC III A-IO-M8 Component, REMIC III A-IO-M9 Component and
REMIC III A- IO-M10 Component) which shall accrue interest at the related REMIC
III Remittance Rate on such REMIC III A-IO Component's Uncertificated Notional
Amount in effect from time to time, but shall not be entitled to distributions
of principal.

     "REMIC III Certificate": Any Regular Certificate (other than a Class CE
Certificate or Class P Certificate) or Class R Certificate.

     "REMIC III Certificateholder": The Holder of any REMIC III Certificate.

     "REMIC III Regular Interest": Any Class A Certificate, Mezzanine
Certificate, REMIC III A-IO Component, the Class CE Interest or the Class P
Interest.

     "REMIC III Remittance Rate": With respect to each REMIC III A-IO Component,
the excess of (x) REMIC II Remittance Rate for the REMIC II Regular Interest
with the same designation as the REMIC III A-IO Component over (y) the lesser of
(a) One-Month LIBOR plus the related Certificate Margin and (b) the related Net
WAC Rate.

     "REMIC IV": The segregated pool of assets consisting of all of the Class CE
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificate (in respect of the Class
R-III Interest), pursuant to Article II hereunder, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.

                                      -48-

<PAGE>

     "REMIC V": The segregated pool of assets consisting of all of the Class P
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificate (in respect of the Class R-V
Interest), pursuant to Article II hereunder, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.

     "REMIC Regular Interest": Any REMIC I Regular Interest, REMIC II Regular
Interest or REMIC III Regular Interest.

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

     "Remittance Report": A report prepared by the Servicer and delivered to the
Trustee and the NIMS Insurer pursuant to Section 4.03.

     "Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code as being included in
the term "rents from real property."

     "REO Account": The account or accounts maintained, or caused to be
maintained, by the Servicer in respect of an REO Property pursuant to Section
3.23.

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

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

     "REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23(c) in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the Servicer
pursuant to Section 3.23(d) for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.

     "REO Property": A Mortgaged Property acquired by the Servicer on behalf of
REMIC I through foreclosure or deed-in-lieu of foreclosure, as described in
Section 3.23.

                                      -49-

<PAGE>

     "Request for Release": A request for release in such electronic or other
format as shall be mutually agreeable by the Trustee and the Servicer, in
substantially the form of Exhibit E attached hereto.

     "Reserve Interest Rate": With respect to any Interest Determination Date,
the rate per annum that the Trustee determines to be either (i) the arithmetic
mean (rounded upwards if necessary to the nearest whole multiple of 1/16%) of
the one-month U.S. 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 (ii)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which New York City banks selected by the
Trustee are quoting on such Interest Determination Date to leading European
banks.

     "Residential Dwelling": Any one of the following: (i) a detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a Fannie Mae eligible condominium project, (iv) a manufactured
home, or (v) a detached one-family dwelling in a planned unit development, none
of which is a co-operative or mobile home.

     "Residual Certificate": Any one of the Class R Certificates and the Class
R-X Certificates.

     "Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.

     "Responsible Officer": When used with respect to the Trustee, the Chairman
or Vice Chairman of the Board of Directors or Trustees, the Chairman or Vice
Chairman of the Executive or Standing Committee of the Board of Directors or
Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant
cashier, any trust officer or assistant trust officer, the Controller and any
assistant controller or any other officer of the Trustee, customarily performing
functions similar to those performed by any of the above designated officers
and, with respect to a particular matter, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.

     "S&P": Standard & Poor's Ratings Services, a division of the McGraw-Hill
Companies, Inc., or its successor in interest.

     "Seller": UBS Real Estate Securities Inc. or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement.

     "Servicer": HomEq Servicing Corporation or its successor in interest, in
its capacity as servicer hereunder.

     "Servicer Event of Default": One or more of the events described in Section
7.01.

     "Servicer Prepayment Charge Payment Amount": The amounts payable by the

                                      -50-

<PAGE>

Servicer in respect of any waived Prepayment Charges pursuant to Section 2.05 or
Section 3.01.

     "Senior Principal Distribution Amount": With respect to any Distribution
Date, the sum of (i) the Group I Senior Principal Distribution Amount and (ii)
the Group II Senior Principal Distribution Amount.

     "Servicer Remittance Date": With respect to any Distribution Date, by 1:00
p.m. New York time the Business Day immediately preceding the related
Distribution Date.

     "Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.

     "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses other than Advances (including reasonable attorneys'
fees and disbursements) incurred by the Servicer in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures, in respect
of a particular Mortgage Loan, (iii) the management and liquidation of the REO
Property and (iv) taxes, assessments, water rates, sewer rents and other charges
which are or may become a lien upon the Mortgaged Property. Servicing Advances
also include any reasonable "out-of-pocket" costs and expenses (including legal
fees) incurred by the Servicer in connection with executing and recording
instruments of satisfaction, deeds of reconveyance or Assignments of Mortgage in
connection with any foreclosure in respect of any Mortgage Loan to the extent
not recovered from the related Mortgagor or otherwise payable under this
Agreement. The Servicer shall not be required to make any Servicing Advance that
would be a Nonrecoverable Servicing Advance.

     "Servicing Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one-twelfth of the Servicing Fee Rate (without regards
to the words "per annum" in the definition thereof) multiplied by the Stated
Principal Balance of the Mortgage Loans as of the first day of the related Due
Period.

     "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 appears
on a list of servicing officers furnished by the Servicer to the Trustee upon
request, as such list may from time to time be amended.

     "Servicing Transfer Costs": Shall mean all reasonable costs and expenses
incurred by the Trustee in connection with the transfer of servicing from a
predecessor servicer, including, without limitation, any reasonable costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.

     "Single Certificate": With respect to any Class of Certificates (other than
the Class

                                      -51-

<PAGE>

P Certificates and the Residual Certificates), a hypothetical Certificate of
such Class evidencing a Percentage Interest for such Class corresponding to an
initial Certificate Principal Balance of $1,000. With respect to the Class P
Certificates and the Residual Certificates, a hypothetical Certificate of such
Class evidencing a 100% Percentage Interest in such Class.

     "Startup Day": With respect to each Trust REMIC, the day designated as such
pursuant to Section 10.01(b) hereof.

     "Stated Principal Balance": With respect to any Mortgage Loan: (a) as of
any date of determination up to but not including the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, the Cut-off Date Principal Balance of such Mortgage Loan,
as shown in the Mortgage Loan Schedule, minus the sum of (i) the principal
portion of each Monthly Payment due on a Due Date subsequent to the Cut-off
Date, to the extent received from the Mortgagor or advanced by the Servicer and
distributed pursuant to Section 4.01 on or before such date of determination,
(ii) all Principal Prepayments received after the Cut-off Date, to the extent
distributed pursuant to Section 4.01 on or before such date of determination,
(iii) all Liquidation Proceeds and Insurance Proceeds applied by the Servicer as
recoveries of principal in accordance with the provisions of Section 3.16, to
the extent distributed pursuant to Section 4.01 on or before such date of
determination, and (iv) any Realized Loss incurred with respect thereto as a
result of a Deficient Valuation made during or prior to the Prepayment Period
for the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of REMIC I, minus the sum of (i) if such REO Property was acquired before the
Distribution Date in any calendar month, the principal portion of the Monthly
Payment due on the Due Date in the calendar month of acquisition, to the extent
advanced by the Servicer and distributed pursuant to Section 4.01 on or before
such date of determination, and (ii) the aggregate amount of REO Principal
Amortization in respect of such REO Property for all previously ended calendar
months, to the extent distributed pursuant to Section 4.01 on or before such
date of determination; and (b) as of any date of determination coinciding with
or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

     "Stepdown Date": The earlier to occur of (i) the Distribution Date on which
the aggregate Certificate Principal Balance of the Class A Certificates has been
reduced to zero and (ii) the later to occur of (x) the Distribution Date
occurring in August 2007 and (y) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account payments of principal on the Mortgage Loans but prior to distribution of
the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount to the Certificates then entitled to distributions of
principal on such Distribution Date) is equal to or greater than 43.50%.

                                      -52-

<PAGE>

     "Sub-Servicer": Any Person with which the Servicer has entered into a
Sub-Servicing Agreement which meets the requirements set forth in Section 3.02.

     "Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Servicer.

     "Sub-Servicing Agreement": The written contract between the Servicer and a
Sub- Servicer relating to servicing and administration of certain Mortgage Loans
meeting the requirements set forth in Section 3.02.

     "Subsequent Recoveries": As of any Distribution Date, unexpected amounts
received by the Servicer (net of any related expenses permitted to be reimbursed
to the Servicer) specifically related to a Mortgage Loan that was the subject of
a liquidation or an REO Disposition prior to the related Prepayment Period that
resulted in a Realized Loss.

     "Substitution Adjustment Amount": As defined in Section 2.03(b).

     "Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of the Trust Fund due to the classification of portions thereof as
REMICs under the REMIC Provisions, together with any and all other information
reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.

     "Telerate Page 3750": The display designated as page "3750" on the Dow
Jones Telerate Capital Markets Report (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank offered rates
of major banks).

     "Termination Price": As defined in Section 9.01.

     "Terminator": As defined in Section 9.01.

     "Transfer": Any direct or indirect transfer, sale, pledge, hypothecation,
or other form of assignment of any Ownership Interest in a Certificate.

     "Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.

     "Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.

     "Trigger Event": A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if:

                                      -53-

<PAGE>

     (a) the Delinquency Percentage exceeds 16.50% or

     (b) the aggregate amount of Realized Losses incurred since the Cut-off Date
through the last day of the related Due Period (reduced by the aggregate amount
of Subsequent Recoveries received since the Cut-off Date through the last day of
the related Due Period) divided by the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set
forth below with respect to such Distribution Date:

      DISTRIBUTION DATE OCCURRING IN             PERCENTAGE
----------------------------------------------------------------------
August 2007 through July 2008                       2.75%
August 2008 through July 2009                       4.50%
August 2009 through July 2010                       6.00%
August 2010 and thereafter                          6.75%

     "Trust Fund": Collectively, all of the assets of REMIC I, REMIC II, REMIC
III, REMIC IV, REMIC V, the Net WAC Rate Carryover Reserve Account, the Cap
Contracts and the other assets conveyed by the Depositor to the Trustee pursuant
to Section 2.01.

     "Trust REMIC": Any of REMIC I, REMIC II, REMIC III, REMIC IV or REMIC V.

     "Trustee": U.S. Bank National Association, a national banking association,
or its successor in interest, or any successor trustee appointed as herein
provided.

     "Trustee Fee": The amount payable to the Trustee on each Distribution Date
pursuant to Section 8.05 as compensation for all services rendered by it in the
execution of the trust hereby created and in the exercise and performance of any
of the powers and duties of the Trustee hereunder, which amount shall be equal
to one-twelfth of the Trustee Fee Rate (without regards to the words "per annum"
in the definition thereof) multiplied by the Stated Principal Balance of the
Mortgage Loans as of the first day of the related Due Period.

     "Trustee Fee Rate": 0.0235% per annum.

     "Uncertificated Balance": The amount of any REMIC Regular Interest (other
than any REMIC III A-IO Component) outstanding as of any date of determination.
As of the Closing Date, the Uncertificated Balance of each REMIC Regular
Interest (other than any REMIC III A-IO Component) shall equal the amount set
forth in the Preliminary Statement hereto as its initial uncertificated balance.
On each Distribution Date, the Uncertificated Balance of each REMIC Regular
Interest (other than any REMIC III A-IO Component) shall be reduced by all
distributions of principal made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 4.01 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.04. The Uncertificated Balance of REMIC I
Regular Interest I-LTZZ shall be increased by interest deferrals as provided in
Section 4.01(a)(1)(i). The Uncertificated Balance of each REMIC Regular Interest
shall never be less than zero. With respect to the REMIC II Regular Interest
II-LTCE as of any date of determination, an amount equal to the excess, if any,
of (A) the then aggregate Uncertificated Principal Balance of the REMIC I
Regular Interests over (B) the then aggregate Certificate Principal Balances of
the Class A

                                      -54-

<PAGE>

Certificates, Mezzanine Certificates and the Class P Interest then outstanding.

     "Uncertificated Interest": With respect to any REMIC Regular Interest for
any Distribution Date, one month's interest at the REMIC Remittance Rate
applicable to such REMIC Regular Interest for such Distribution Date, accrued on
the Uncertificated Balance thereof immediately prior to such Distribution Date.
Uncertificated Interest in respect of any REMIC Regular Interest shall accrue on
the basis of a 360-day year consisting of twelve 30-day months. Uncertificated
Interest with respect to each Distribution Date, as to any REMIC Regular
Interest, shall be reduced by an amount equal to the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the extent
not covered by payments pursuant to Section 3.24 and (b) the aggregate amount of
any Relief Act Interest Shortfall, if any allocated, in each case, to such REMIC
Regular Interest pursuant to Section 1.02. In addition, Uncertificated Interest
with respect to each Distribution Date, as to any REMIC Regular Interest shall
be reduced by Realized Losses, if any, allocated to such REMIC Regular Interest
pursuant to Section 1.02 and Section 4.04.

     "Underwriters' Exemption": As defined in the Prospectus Supplement.

     "Uninsured Cause": Any cause of damage to a Mortgaged Property such that
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.14.

     "United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States, any state thereof or, District of Columbia (except,
in the case of a partnership, to the extent provided in regulations) provided
that, for purposes solely of the restrictions on the transfer of Residual
Certificates, no partnership or other entity treated as a partnership for United
States federal income tax purposes shall be treated as a United States Person
unless all persons that own an interest in such partnership either directly or
through any entity that is not a corporation for United States federal income
tax purposes are required by the applicable operative agreement to be United
States Persons or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust. To the extent prescribed in regulations by
the Secretary of the Treasury, which have not yet been issued, a trust which was
in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence. The term "United States" shall have the meaning set forth in Section
7701 of the Code.

     "Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of

                                      -55-

<PAGE>

interest due but not paid on the Certificates of such Class on such preceding
Distribution Date, to the extent permitted by law, at the Pass-Through Rate for
such Class for the related Accrual Period.

     "Value": With respect to any Mortgage Loan, and the related Mortgaged
Property, the lesser of:

     (i)  the lesser of (a) the value thereof as determined by an appraisal made
          for the originator of the Mortgage Loan at the time of origination of
          the Mortgage Loan by an appraiser who met the minimum requirements of
          Fannie Mae and Freddie Mac, and (b) the value thereof as determined by
          a review appraisal conducted by the Originator in the event any such
          review appraisal determines an appraised value more than 10% lower
          than the value thereof, in the case of a Mortgaged Loan with a Loan-
          to-Value Ratio less than or equal to 80%, or more than 5% lower than
          the value thereof, in the case of a Mortgage Loan with a Loan-to-Value
          Ratio greater than 80%, as determined by the appraisal referred to in
          clause (i)(a) above; and

     (ii) the purchase price paid for the related Mortgaged Property by the
          Mortgagor with the proceeds of the Mortgage Loan; provided, however,
          that in the case of a refinanced Mortgage Loan (which is a Mortgage
          Loan the proceeds of which were not used to purchase the related
          Mortgaged Property) or a Mortgage Loan originated in connection with a
          "lease option purchase" if the "lease option purchase price" was set
          12 months or more prior to origination, such value of the Mortgaged
          Property is based solely upon clause (i) above.

     "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights will be allocated among the holders of
the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated to the holders of the Class P Certificates and 1% of all Voting Rights
will be allocated among the holders of the Residual Certificates. The Voting
Rights allocated to each Class of Certificate shall be allocated among Holders
of each such Class in accordance with their respective Percentage Interests as
of the most recent Record Date.

     SECTION 1.02. Allocation of Certain Interest Shortfalls.

     For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Mezzanine Certificates
and the Class CE Certificates for any Distribution Date, (1) the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Servicer pursuant to Section 3.24) and any Relief Act Interest
Shortfall incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to the Class CE Certificates based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount of each such Certificate and, thereafter,
among the Class A Certificates and the Mezzanine Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance of each such Certificate and (2) the aggregate amount

                                      -56-

<PAGE>

of any Realized Losses and Net WAC Rate Carryover Amounts incurred for any
Distribution Date shall be allocated to the Class CE Certificates based on, and
to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Notional Amount of each such Certificate.

     For purposes of calculating the amount of Uncertificated Interest for the
REMIC I Regular Interests for any Distribution Date:

     (A)  The REMIC I Marker Allocation Percentage of the aggregate amount of
          any Prepayment Interest Shortfalls (to the extent not covered by
          payments by the Servicer pursuant to Section 3.24) and the REMIC I
          Marker Allocation Percentage of the aggregate amount of any Relief Act
          Interest Shortfalls incurred in respect of the Mortgage Loans for any
          Distribution Date shall be allocated among REMIC I Regular Interest
          I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
          I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-
          LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
          I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
          I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
          I-LTM9, REMIC I Regular Interest I-LTM10 and REMIC I Regular Interest
          I-LTZZ PRO RATA based on, and to the extent of, one month's interest
          at the then applicable respective Pass-Through Rate on the respective
          Uncertificated Balance of each such REMIC I Regular Interest; and

     (B)  The REMIC I Sub WAC Allocation Percentage of the aggregate amount of
          any Prepayment Interest Shortfalls (to the extent not covered by
          payments by the Servicer pursuant to Section 3.24) and the REMIC I Sub
          WAC Allocation Percentage of the aggregate amount of any Relief Act
          Interest Shortfalls incurred in respect of the Mortgage Loans for any
          Distribution Date shall be allocated to Uncertificated Interest
          payable to REMIC I Regular Interest I-LT1SUB, REMIC I Regular Interest
          I- LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I Regular Interest
          I- LT2GRP, REMIC I Regular Interest I-LT3SUB, REMIC I Regular Interest
          I- LT3GRP and REMIC I Regular Interest I-LTXX, pro rata based on, and
          to the extent of, one month's interest at the then applicable
          respective Pass-Through Rate on the respective Uncertificated Balance
          of each such REMIC I Regular Interest.

     For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the REMIC II Regular Interests for any Distribution
Date, the aggregate amount of any Prepayment Interest Shortfalls (to the extent
not covered by payments by the Servicer pursuant to Section 3.24) and any Relief
Act Interest Shortfall incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to REMIC II Regular Interest LT-IICE
based on, and to the extent of, one month's interest at the then applicable
REMIC II Remittance Rate on the Uncertificated Notional Amount of such REMIC II
Regular Interest and, thereafter, among REMIC II Regular Interest II-LTA1, REMIC
II Regular Interest II-LTA2, REMIC II Regular Interest II- LTM1, REMIC II
Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular
Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest
II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8,
REMIC II Regular Interest II-

                                      -57-

<PAGE>

LTM9 and REMIC II Regular Interest II-LTM10 on a PRO RATA basis based on, and to
the extent of, one month's interest at the then applicable respective REMIC II
Remittance Rate on the respective Uncertificated Balance of each such REMIC II
Regular Interest.

     SECTION 1.03 Rights of the NIMS Insurer.

     Each of the rights of the NIMS Insurer set forth in this Agreement shall
exist so long as (i) the NIMS Insurer has undertaken to guarantee certain
payments of notes issued pursuant to the Indenture and (ii) the notes issued
pursuant to the Indenture remain outstanding or the NIMS Insurer is owed amounts
in respect of its guarantee of payment on such notes; provided, however, the
NIMS Insurer shall not have any rights hereunder (except pursuant to Section
11.01 and any rights to indemnification hereunder in the case of clause (ii)
below) so long as (i) the NIMS Insurer has not undertaken to guarantee certain
payments of notes issued pursuant to the Indenture or (ii) any default has
occurred and is continuing under the insurance policy issued by the NIMS Insurer
with respect to such notes.

                                      -58-

<PAGE>

                                   ARTICLE II

                         CONVEYANCE OF MORTGAGE LOANS;
                       ORIGINAL ISSUANCE OF CERTIFICATES

     SECTION 2.01. Conveyance of the Mortgage Loans.

     The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey to the Trustee without
recourse, for the benefit of the Certificateholders, all the right, title and
interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement, and all other assets included or to be included in REMIC I.
Such assignment includes all interest and principal received by the Depositor or
the Servicer on or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the Cut-off
Date). The Depositor herewith delivers to the Trustee an executed original
Mortgage Loan Purchase Agreement.

     In connection with such transfer and assignment, the Depositor does hereby
deliver to, and deposit with, the Trustee (or the Custodian on behalf of the
Trustee) the following documents or instruments with respect to each Mortgage
Loan so transferred and assigned (a "Mortgage File"):

          (i) the original Mortgage Note, endorsed in blank or in the following
     form: "Pay to the order of U.S. Bank National Association, as Trustee under
     the applicable agreement, without recourse," with all prior and intervening
     endorsements showing a complete chain of endorsement from the originator to
     the Person so endorsing to the Trustee;

          (ii) the original Mortgage, noting the presence of the MIN of the
     Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan
     if the Mortgage Loan is a MOM Loan, with evidence of recording thereon, and
     the original recorded power of attorney, if the Mortgage was executed
     pursuant to a power of attorney, with evidence of recording thereon;

          (iii) unless the Mortgage Loan is registered on the MERS(R) System, an
     original Assignment in blank;

          (iv) the original recorded Assignment or Assignments showing a
     complete chain of assignment from the originator to the Person assigning
     the Mortgage to the Trustee (or to MERS, if the Mortgage Loan is registered
     on the MERS(R) System and noting the presence of the MIN) as contemplated
     by the immediately preceding clause (iii);

          (v) the original or copies of each assumption, modification, written
     assurance or substitution agreement, if any; and

          (vi) the original lender's title insurance policy, together with all
     endorsements or riders that were issued with or subsequent to the issuance
     of such policy, insuring the priority

                                      -59-

<PAGE>

     of the Mortgage as a first or second lien on the Mortgaged Property
     represented therein as a fee interest vested in the Mortgagor, or in the
     event such original title policy is unavailable, a written commitment or
     uniform binder or preliminary report of title issued by the title insurance
     or escrow company.

     With respect to a maximum of approximately 1.0% of the Mortgage Loans, by
outstanding principal balance of the Mortgage Loans as of the Cut-off Date, if
any original Mortgage Note referred to in Section 2.01(i) above cannot be
located, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon delivery to the Trustee (or the Custodian on behalf
of the Trustee) of a photocopy of such Mortgage Note, if available, with a lost
note affidavit substantially in the form of Exhibit I attached hereto. If any of
the original Mortgage Notes for which a lost note affidavit was delivered to the
Trustee (or the Custodian on behalf of the Trustee) is subsequently located,
such original Mortgage Note shall be delivered to the Trustee (or the Custodian
on behalf of the Trustee) within three Business Days.

     Except with respect to any Mortgage Loan for which MERS is identified on
the Mortgage or on a properly recorded assignment of the Mortgage as the
mortgagee of record, the Trustee shall promptly (within sixty Business Days
following the later of the Closing Date and the date of receipt by the Trustee
or the Custodian of the recording information for a Mortgage, but in no event
later than ninety days following the Closing Date) enforce the obligations of
the Originator pursuant to the terms of the Mortgage Loan Purchase Agreement to
submit or cause to be submitted for recording, at no expense to the Trust Fund,
the Trustee, the Custodian, the Servicer or the Depositor, in the appropriate
public office for real property records, each Assignment referred to in Sections
2.01(iii) and (iv) above and in connection therewith, the Trustee shall enforce
the obligation of the Originator pursuant to the terms of the Mortgage Loan
Purchase Agreement to execute each original Assignment in the following form:
"U.S. Bank National Association, as Trustee under the applicable agreement." In
the event that any such Assignment is lost or returned unrecorded because of a
defect therein, the Trustee shall enforce the obligation of the Originator
pursuant to the Mortgage Loan Purchase Agreement to promptly prepare or cause to
be prepared a substitute Assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.

     In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Depositor further agrees that it will cause, within 30
Business Days after the Closing Date, the MERS(R) System to indicate that such
Mortgage Loans have been assigned by the Depositor to the Trustee in accordance
with this Agreement for the benefit of the Certificateholders by including (or
deleting, in the case of Mortgage Loans which are repurchased in accordance with
this Agreement) in such computer files (a) the code in the field which
identifies the specific Trustee and (b) the code in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Depositor further agrees that it will not, and will not
permit the Servicer to, and the Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any Mortgage Loan during the
term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.

     If any of the documents referred to in Sections 2.01(ii), (iii) or (iv)
has, as of the Closing Date, been submitted for recording but either (x) has not
been returned from the applicable

                                      -60-

<PAGE>

public recording office or (y) has been lost or such public recording office has
retained the original of such document, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon (1) delivery to the
Trustee (or the Custodian on behalf of the Trustee) of a copy of each such
document certified by the Originator in the case of (x) above or the applicable
public recording office in the case of (y) above to be a true and complete copy
of the original that was submitted for recording and (2) if such copy is
certified by the Originator, delivery to the Trustee (or the Custodian on behalf
of the Trustee) promptly upon receipt thereof of either the original or a copy
of such document certified by the applicable public recording office to be a
true and complete copy of the original. Pursuant to the Mortgage Loan Purchase
Agreement, notice shall be provided to the Trustee and the Rating Agencies by
the Originator if delivery pursuant to clause (2) above will be made more than
180 days after the Closing Date.

     If the original lender's title insurance policy was not delivered pursuant
to Section 2.01(vi) above, the Depositor shall deliver or cause to be delivered
to the Trustee (or the Custodian on behalf of the Trustee), promptly after
receipt thereof, the original lender's title insurance policy. The Depositor
shall deliver or cause to be delivered to the Trustee (or the Custodian on
behalf of the Trustee) promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.

     All original documents relating to the Mortgage Loans that are not
delivered to the Trustee (or the Custodian on behalf of the Trustee) are and
shall be held by or on behalf of the Originator, the Seller, the Depositor or
the Servicer, as the case may be, in trust for the benefit of the Trustee on
behalf of the Certificateholders. In the event that any such original document
is required pursuant to the terms of this Section 2.01 to be a part of a
Mortgage File, such document shall be delivered promptly to the Trustee (or the
Custodian on behalf of the Trustee). Any such original document delivered to or
held by the Depositor that is not required pursuant to the terms of this Section
to be a part of a Mortgage File, shall be delivered promptly to the Servicer.

     The Depositor and the Trustee hereto understand and agree that it is not
intended that any Mortgage Loan be included in the Trust that is a "High-Cost
Home Loan" as defined by the Homeownership and Equity Protection Act of 1994 or
any other applicable predatory or abusive lending laws.

     The Depositor hereby directs the Trustee to, and the Trustee hereby agrees
to execute, deliver and perform its obligations under each of the Cap Contracts
on the Closing Date and thereafter on behalf of the Holders of the Class A-1
Certificates, the Class A-2 Certificates and the Mezzanine Certificates. The
Depositor, the Servicer and the Holders of the Class A-1 Certificates, the Class
A-2 Certificates and the Mezzanine Certificates by their acceptance of such
Certificates acknowledge and agree that the Trustee shall execute, deliver and
perform its obligations under each of the Cap Contracts and shall do so solely
in its capacity as Trustee of the Trust Fund and not in its individual capacity.

     SECTION 2.02. Acceptance of REMIC I by Trustee.

     The Trustee acknowledges receipt (or receipt by the Custodian as the duly
appointed

                                      -61-

<PAGE>

agent of the Trustee), subject to the provisions of Section 2.01 and subject to
any exceptions noted on the exception report described in the next paragraph
below, the documents referred to in Section 2.01 (other than such documents
described in Section 2.01(v)) above and all other assets included in the
definition of "REMIC I" under clauses (i), (iii), (iv) and (v) (to the extent of
amounts deposited into the Distribution Account) and declares that it holds and
will hold such documents and the other documents delivered to it constituting a
Mortgage File, and that it holds or will hold all such assets and such other
assets included in the definition of "REMIC I" in trust for the exclusive use
and benefit of all present and future Certificateholders.

     The Trustee (or the Custodian on behalf of the Trustee) agrees to execute
and deliver to the Depositor and the NIMS Insurer on or prior to the Closing
Date an acknowledgment of receipt of the original Mortgage Note (with any
exceptions noted), substantially in the form attached as Exhibit C-3 hereto.

     The Trustee (or the Custodian on behalf of the Trustee) agrees, for the
benefit of the Certificateholders and the NIMS Insurer, to review each Mortgage
File and, within 45 days of the Closing Date; to certify in substantially the
form attached hereto as Exhibit C-1 (or cause the Custodian to certify in the
form of the Initial Certification attached to the Custodial Agreement) that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
exception report annexed thereto as not being covered by such certification),
(i) all documents constituting part of such Mortgage File (other than such
documents described in Section 2.01(v)) required to be delivered to it pursuant
to this Agreement are in its possession, (ii) such documents have been reviewed
by it or the Custodian and appear regular on their face and relate to such
Mortgage Loan and (iii) based on its or the Custodian's examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (1), (3), (12), (15) and (18) of the definition of
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Trustee (or the Custodian on behalf of the Trustee) is under no duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine, enforceable,
or appropriate for the represented purpose or whether they have actually been
recorded or that they are other than what they purport to be on their face or
(ii) to determine whether any Mortgage File should include any of the documents
specified in clause (v) of Section 2.01.

     Prior to the first anniversary date of this Agreement the Trustee shall
deliver to the Depositor, the NIMS Insurer and the Servicer a final
certification in the form annexed hereto as Exhibit C-2 (or shall cause the
Custodian to deliver to the Depositor, the NIMS Insurer and the Servicer a final
certification in the form attached to the Custodial Agreement) evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon, and the Servicer shall forward a copy thereof to any Sub-Servicer.

     If in the process of reviewing the Mortgage Files and making or preparing,
as the case may be, the certifications referred to above, the Trustee (or the
Custodian on behalf of the Trustee) finds any document or documents constituting
a part of a Mortgage File to be missing or defective in any material respect, at
the conclusion of its review the Trustee (or the Custodian on behalf of the
Trustee) shall so notify the Depositor, the NIMS Insurer and the Servicer. In
addition, upon the

                                      -62-

<PAGE>

discovery by the Depositor, the NIMS Insurer, the Servicer or the Trustee of a
breach of any of the representations and warranties made by the Originator or
the Seller in the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects such Mortgage Loan or the interests of
the related Certificateholders in such Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties.

     The Trustee (or the Custodian on behalf of the Trustee) shall, at the
written request and expense of any Certificateholder, provide a written report
to such Certificateholder of all Mortgage Files released to the Servicer for
servicing purposes.

     The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans, the related
Mortgage Notes and the related documents, conveying good title thereto free and
clear of any liens and encumbrances, from the Depositor to the Trustee in trust
for the benefit of the Certificateholders and that such property not be part of
the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.

     SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the
Originator or the Seller.

     (a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of the
breach by the Originator or the Seller of any representation, warranty or
covenant under the Mortgage Loan Purchase Agreement (including any
representation, warranty or covenant regarding the Prepayment Charge Schedule)
in respect of any Mortgage Loan that materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders, the
Trustee shall promptly notify the Originator, the NIMS Insurer, the Seller and
the Servicer of such defect, missing document or breach and request that the
Originator or the Seller, as applicable, deliver such missing document or cure
such defect or breach within 90 days from the date the Originator or the Seller,
as applicable, was notified of such missing document, defect or breach, and if
the Originator or the Seller, as applicable, does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Trustee shall enforce the obligations of the Originator or the
Seller, as applicable, under the Mortgage Loan Purchase Agreement to repurchase
such Mortgage Loan from REMIC I at the Purchase Price within 90 days after the
date on which the Originator or the Seller, as applicable, was notified (subject
to Section 2.03(c)) of such missing document, defect or breach, if and to the
extent that the Originator or the Seller, as applicable, is obligated to do so
under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be remitted to the Servicer for deposit in the
Collection Account and the Trustee (or the Custodian on behalf of the Trustee),
upon receipt of written certification from the Servicer of such deposit, shall
release to the Originator or the Seller, as applicable, the related Mortgage
File and the Trustee (or the Custodian on behalf of the Trustee) shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator or the Seller, as applicable, shall furnish to it
and as

                                      -63-

<PAGE>

shall be necessary to vest in the Originator or the Seller, as applicable, any
Mortgage Loan released pursuant hereto. In furtherance of the foregoing, if the
Originator or the Seller, as applicable, is not a member of MERS and repurchases
a Mortgage Loan which is registered on the MERS(R) System, the Originator or the
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 Originator
or the Seller, as applicable, and shall cause such Mortgage to be removed from
registration on the MERS(R) System in accordance with MERS' rules and
regulations. Neither the Trustee nor the Custodian shall have any further
responsibility with regard to such Mortgage File. In lieu of repurchasing any
such Mortgage Loan as provided above, if so provided in the Mortgage Loan
Purchase Agreement, the Originator or the Seller, as applicable, may cause such
Mortgage Loan to be removed from REMIC I (in which case it shall become a
Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans in the manner and subject to the limitations set forth in Section 2.03(b);
provided, however, the Originator or the Seller, as applicable, may not
substitute a Qualified Substitute Mortgage Loan for any Deleted Mortgage Loan
that violates any predatory or abusive lending law. It is understood and agreed
that the obligation of the Originator or the Seller, as applicable, to cure or
to repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the Trustee and the
Certificateholders.

     (b) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the
date which is two years after the Startup Day for REMIC I.

     As to any Deleted Mortgage Loan for which the Originator or the Seller, as
applicable, substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Originator or the Seller, as applicable,
delivering to the Trustee (or the Custodian on behalf of the Trustee), for such
Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage,
the Assignment in blank or to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Adjustment Amount (as described below), if any, in connection with
such substitution. The Trustee (or the Custodian on behalf of the Trustee) shall
acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter, review such documents as specified in
Section 2.02 and deliver to the Depositor, the NIMS Insurer and the Servicer,
with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit C-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee (or the Custodian on behalf of the Trustee) shall
deliver to the Depositor, the NIMS Insurer and the Servicer a certification
substantially in the form of Exhibit C-2 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution are not part of REMIC I and will be retained by the
Originator or the Seller, as applicable. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due Date in the month of substitution,
and the Originator or the Seller, as

                                      -64-

<PAGE>

applicable, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders and the NIMS Insurer
that such substitution has taken place, 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 Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee, the Custodian, the Servicer and the NIMS Insurer. Upon such
substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be subject in all respects to the terms of
this Agreement and the Mortgage Loan Purchase Agreement, including, all
applicable representations and warranties thereof included in the Mortgage Loan
Purchase Agreement.

     For any month in which the Originator or the Seller, as applicable,
substitutes one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Servicer will determine the amount (the
"Substitution Adjustment Amount"), if any, by which the aggregate Purchase Price
of all such Deleted Mortgage Loans exceeds the aggregate of, as to each such
Qualified Substitute Mortgage Loan, the Stated Principal Balance thereof as of
the date of substitution, together with one month's interest on such Stated
Principal Balance at the applicable Net Mortgage Rate, plus all outstanding
Advances and Servicing Advances (including Nonrecoverable Advances and
Nonrecoverable Servicing Advances) related thereto. On the date of such
substitution, the Originator or the Seller, as applicable, will deliver or cause
to be delivered to the Servicer for deposit in the Collection Account an amount
equal to the Substitution Adjustment Amount, if any, and the Trustee (or the
Custodian on behalf of the Trustee), upon receipt of the related Qualified
Substitute Mortgage Loan or Loans and written notice by the Servicer of such
deposit, shall release to the Originator or the Seller, as applicable, the
related Mortgage File or Files and the Trustee (or the Custodian on behalf of
the Trustee) shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, the Originator or the Seller, as
applicable, shall deliver to it and as shall be necessary to vest therein any
Deleted Mortgage Loan released pursuant hereto.

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

     (c) Upon discovery by the Depositor, the NIMS Insurer, the Originator, the
Seller, 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 within two Business Days give written notice
thereof to the other parties hereto and the Trustee shall give written notice to
the Originator and the Seller. In connection therewith, the Originator, the
Seller or the Depositor shall repurchase or, subject to the limitations set
forth in Section 2.03(b), substitute one or more Qualified Substitute Mortgage
Loans for the affected Mortgage Loan within 90 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. Such
repurchase or substitution shall be made by (i) the Originator or the Seller, as
the case may be, if the affected Mortgage Loan's status as a non-qualified
mortgage is or results from a breach of any

                                      -65-

<PAGE>

representation, warranty or covenant made by the Originator or the Seller, as
the case may be, under the Mortgage Loan Purchase Agreement, or (ii) the
Depositor, if the affected Mortgage Loan's status as a non-qualified mortgage is
a breach of no representation or warranty. Any such repurchase or substitution
shall be made in the same manner as set forth in Section 2.03(a). The Trustee
(or the Custodian on behalf of the Trustee) shall reconvey to the Depositor, the
Originator or the Seller, as the case may be, 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.

     SECTION 2.04. Reserved

     SECTION 2.05. Representations, Warranties and Covenants of the Servicer.

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

          (i) The Servicer is duly organized, validly existing, and in good
     standing under the laws of the jurisdiction of its formation and has all
     licenses necessary to carry on its business as now being conducted and is
     licensed, qualified and in good standing in the states where the Mortgaged
     Property is located if the laws of such state require licensing or
     qualification in order to conduct business of the type conducted by the
     Servicer or to ensure the enforceability or validity of each Mortgage Loan;
     the Servicer has the power and authority to execute and deliver this
     Agreement and to perform in accordance herewith; the execution, delivery
     and performance of this Agreement (including all instruments of transfer to
     be delivered pursuant to this Agreement) by the Servicer and the
     consummation of the transactions contemplated hereby have been duly and
     validly authorized; this Agreement evidences the valid, binding and
     enforceable obligation of the Servicer, subject to applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     enforcement of creditors' rights generally; and all requisite corporate
     action has been taken by the Servicer to make this Agreement valid and
     binding upon the Servicer in accordance with its terms;

          (ii) The consummation of the transactions contemplated by this
     Agreement are in the ordinary course of business of the Servicer and will
     not result in the material breach of any term or provision of the charter
     or by-laws of the Servicer or result in the breach of any term or provision
     of, or conflict with or constitute a default under or result in the
     acceleration of any obligation under, any material agreement, indenture or
     loan or credit agreement or other instrument to which the Servicer or its
     property is subject, or result in the violation of any law, rule,
     regulation, order, judgment or decree to which the Servicer or its property
     is subject;

          (iii) The execution and delivery of this Agreement by the Servicer and
     the performance and compliance with its obligations and covenants hereunder
     do not require the consent or approval of any governmental authority or, if
     such consent or approval is required, it has been obtained;

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<PAGE>

          (iv) This Agreement, and all documents and instruments contemplated
     hereby which are executed and delivered by the Servicer, constitute and
     will constitute valid, legal and binding obligations of the Servicer,
     enforceable in accordance with their respective terms, except as the
     enforcement thereof may be limited by applicable bankruptcy laws and
     general principles of equity;

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

          (vi) There is no action, suit, proceeding or investigation pending or,
     to its knowledge, threatened against the Servicer that, either individually
     or in the aggregate, (A) may result in any change in the business,
     operations, financial condition, properties or assets of the Servicer that
     might prohibit or materially and adversely affect the performance by such
     Servicer of its obligations under, or validity or enforceability of, this
     Agreement, or (B) may result in any material impairment of the right or
     ability of the Servicer to carry on its business substantially as now
     conducted, or (C) would draw into question the validity or enforceability
     of this Agreement or of any action taken or to be taken in connection with
     the obligations of the Servicer contemplated herein, or (D) would otherwise
     be likely to impair materially the ability of the Servicer to perform under
     the terms of this Agreement;

          (vii) No information, certificate of an officer, statement furnished
     in writing or report delivered to the Trustee by the Servicer in connection
     with the transactions contemplated hereby contains any untrue statement of
     a material fact;

          (viii) The Servicer covenants that its computer and other systems used
     in servicing the Mortgage Loans operate in a manner such that the Servicer
     can service the Mortgage Loans in accordance with the terms of this
     Agreement;

          (ix) The Servicer will not waive any Prepayment Charge unless it is
     waived in accordance with the standard set forth in Section 3.01;

          (x) The Servicer has accurately and fully reported, and will continue
     to accurately and fully report on a monthly basis, its borrower credit
     files to each of the three national credit repositories in a timely manner;
     and

          (xii) The Servicer is a member of MERS in good standing, and will
     comply in all material respects with the rules and procedures of MERS in
     connection with the servicing of the Mortgage Loans that are registered
     with MERS.

     It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee or the Custodian and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer, the NIMS Insurer or the Trustee of a breach of any of
the foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such

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<PAGE>

discovery) to the Servicer, the NIMS Insurer and the Trustee. Notwithstanding
the foregoing, within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of the representation or
covenant of the Servicer set forth in Section 2.05(ix) above which materially
and adversely affects the interests of the Holders of the Class P Certificates
in any Prepayment Charge, the Servicer must pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P Certificates,
by depositing such amount into the Collection Account. The foregoing shall not,
however, limit any remedies available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders, pursuant to the Mortgage
Loan Purchase Agreement respecting a breach of the representations, warranties
and covenants of the Originator made in its capacity as a party to the Mortgage
Loan Purchase Agreement.

     SECTION 2.06. Conveyance of REMIC Regular Interests and Acceptance of REMIC
          I, REMIC II, REMIC III, REMIC IV and REMIC V by the Trustee; Issuance
          of Certificates.

     (a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the assets described in the definition of REMIC I for the benefit of the
holders of the REMIC I Regular Interests (which are uncertificated) and the
Class R Certificates (in respect of the Class R-I Interest). The Trustee
acknowledges receipt of the assets described in the definition of REMIC I and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of the holders of the REMIC I Regular Interests and the Class R
Certificates (in respect of the Class R-I Interest). The interests evidenced by
the Class R-I Interest, together with the REMIC I Regular Interests, constitute
the entire beneficial ownership interest in REMIC I.

     (b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests (which are uncertificated) for the benefit
of the Holders of the REMIC II Regular Interests and the Class R Certificates
(in respect of the Class R-II Interest). The Trustee acknowledges receipt of the
REMIC I Regular Interests and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the Holders of the REMIC II Regular
Interests and the Class R Certificates (in respect of the Class R-II Interest).
The interests evidenced by the Class R-II Interest, together with the REMIC II
Regular Interests, constitute the entire beneficial ownership interest in REMIC
II.

     (c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC II Regular Interests (which are uncertificated) for the benefit
of the Holders of the REMIC III Regular Interests and the Class R Certificates
(in respect of the Class R-III Interest). The Trustee acknowledges receipt of
the REMIC II Regular Interests and declares that it holds and will hold the same
in trust for the exclusive use and benefit of the Holders of the REMIC III
Regular Interests and the Class R Certificates (in respect of the Class R-III
Interest). The interests evidenced by the Class R-III Interest, together with
the Regular Certificates (other than the Class CE Certificates and the Class P
Certificates), the Class CE Interest and the Class P Interest, constitute the
entire beneficial ownership interest in REMIC III.

                                      -68-

<PAGE>

     (d) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class CE Interest (which is uncertificated) for the benefit of the
Holders of the Class CE Certificates and the Class R-X Certificates (in respect
of the Class R-IV Interest). The Trustee acknowledges receipt of the Class CE
Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the Holders of the Class CE Certificates and the
Class R-X Certificates (in respect of the Class R-IV Interest). The interests
evidenced by the Class R-IV Interest, together with the Class CE Certificates,
constitute the entire beneficial ownership interest in REMIC IV.

     (e) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class P Interest (which is uncertificated) for the benefit of the
Holders of the Class P Certificates and the Class R-X Certificates (in respect
of the Class R-V Interest). The Trustee acknowledges receipt of the Class P
Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the Holders of the Class P Certificates and the
Class R-X Certificates (in respect of the Class R-V Interest). The interests
evidenced by the Class R-V Interest, together with the Class P Certificates,
constitute the entire beneficial ownership interest in REMIC V.

     SECTION 2.07. Issuance of Class R Certificates and Class R-X Certificates.

     (a) The Trustee acknowledges the assignment to it of the REMIC I Regular
Interests and the REMIC II Regular Interests and, concurrently therewith and in
exchange therefor, pursuant to the written request of the Depositor executed by
an officer of the Depositor, the Trustee has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations. The interests evidenced by the Class R Certificates,
together with the REMIC III Certificates, constitute the entire beneficial
ownership interest in REMIC III.

     (b) The Trustee acknowledges the assignment to it of the Class CE Interest
and the Class P Interest and, concurrently therewith and in exchange therefor,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, the Trustee has executed, authenticated and delivered to or upon the
order of the Depositor, the Class R-X Certificates in authorized denominations.
The interests evidenced by the Class R-X Certificates, together with the Class
CE Certificates and the Class P Certificates constitute the entire beneficial
ownership interest in REMIC IV and REMIC V.

                                      -69-

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

     SECTION 3.01. Servicer to Act as Servicer.

     The Servicer shall service and administer the Mortgage Loans on behalf of
the Trust Fund and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the Mortgage Loans and, to the
extent consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:

          (i) any relationship that the Servicer, any Sub-Servicer or any
     Affiliate of the Servicer or any Sub-Servicer may have with the related
     Mortgagor;

          (ii) the ownership or non-ownership of any Certificate by the Servicer
     or any Affiliate of the Servicer;

          (iii) the Servicer's obligation to make Advances or Servicing
     Advances; or

          (iv) the Servicer's or any Sub-Servicer's right to receive
     compensation for its services hereunder or with respect to any particular
     transaction.

     To the extent consistent with the foregoing, the Servicer (a) shall seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan,
(ii) the collection of such Prepayment Charge would be in violation of
applicable laws, (iii) the amount of the Prepayment Charge set forth on the
Prepayment Charge Schedule is not consistent with the related Mortgage Note or
is otherwise unenforceable or (iv) the collection of such Prepayment Charge
would be considered "predatory" pursuant to written guidance published or issued
by any applicable federal, state or local regulatory authority acting in its
official capacity and having jurisdiction over such matters. If a Prepayment
Charge is waived as permitted by meeting the standard described in clauses (ii),
(iii) or (iv) above, then the Trustee shall enforce the obligation of the
Originator to pay the amount of such waived Prepayment Charge to the Servicer
for deposit in the Collection Account for the benefit of the Holders of the
Class P Certificates. Subject only to the above-described servicing standards
and the terms of this Agreement and of the Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Sub-Servicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a

                                      -70-

<PAGE>

Sub-Servicer is hereby authorized and empowered by the Trustee when the Servicer
believes it appropriate in its best judgment in accordance with the servicing
standards set forth above, to execute and deliver, on behalf of the
Certificateholders and the Trustee, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Servicer shall service and administer the Mortgage Loans
in accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.17, within fifteen (15) days of the Closing Date, the
Trustee shall execute, at the written request of the Servicer, and furnish to
the Servicer and any Sub-Servicer any special or limited powers of attorney and
other documents necessary or appropriate to enable the Servicer or any
Sub-Servicer to carry out their servicing and administrative duties hereunder;
provided, such limited powers of attorney or other documents shall be prepared
by the Servicer and submitted to the Trustee for execution. The Trustee shall
not be liable for the actions of the Servicer or any Sub- Servicers under such
powers of attorney.

     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(R) System, or cause the removal from the registration of any Mortgage
Loan on the MERS(R) 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(R) System,
shall be reimbursable to the Servicer by withdrawal from the Collection Account
pursuant to Section 3.11.

     Subject to Section 3.09 hereof, in accordance with the standards of the
preceding paragraph, the Servicer, on escrowed accounts, shall advance or cause
to be advanced funds as necessary for the purpose of effecting the payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09, and further as provided in Section
3.11. Any cost incurred by the Servicer or by Sub-Servicers in effecting the
payment of taxes and assessments on a Mortgaged Property shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid Stated Principal Balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit.

     Notwithstanding anything in this Agreement to the contrary, the Servicer
may not make any future advances with respect to a Mortgage Loan (except as
provided in Section 4.03) and the Servicer shall not (i) permit any modification
with respect to any Mortgage Loan that would change the Mortgage Rate, reduce or
increase the Stated Principal Balance (except for reductions

                                      -71-

<PAGE>

resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Servicer, reasonably foreseeable) or (ii) permit any modification, waiver or
amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
Treasury regulations promulgated thereunder) and (B) cause any REMIC created
hereunder to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions after the startup date" under
the REMIC Provisions.

     Notwithstanding anything in this Agreement to the contrary and
notwithstanding its ability to do so pursuant to the terms of the related
mortgage note, the Servicer shall not be required to enforce any provision in
any mortgage note the enforcement of which would violate federal, state or local
laws or ordinances designed to discourage predatory lending practices.

     SECTION 3.02. Sub-Servicing Agreements Between Servicer and Sub- Servicers.

     (a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers, which may be Affiliates of the Servicer, for the servicing and
administration of the Mortgage Loans; provided, however, that (i) such
sub-servicing arrangement and the terms of the related Sub- Servicing Agreement
must provide for the servicing of the Mortgage Loans in a manner consistent with
the servicing arrangement contemplated hereunder and (ii) the NIMS Insurer shall
have consented to such Sub-Servicing Agreement. The Trustee is hereby authorized
to acknowledge, at the request of the Servicer, any Sub-Servicing Agreement that
meets the requirements applicable to Sub-Servicing Agreements set forth in this
Agreement and that is otherwise permitted under this Agreement.

     Each Sub-Servicer shall be (i) authorized to transact business in the state
or states where the related Mortgaged Properties it is to service are situated,
if and to the extent required by applicable law to enable the Sub-Servicer to
perform its obligations hereunder and under the Sub- Servicing Agreement and
(ii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each Sub- Servicing
Agreement must impose on the Sub-Servicer requirements conforming to the
provisions set forth in Section 3.08 and provide for servicing of the Mortgage
Loans consistent with the terms of this Agreement. The Servicer will examine
each Sub-Servicing Agreement and will be familiar with the terms thereof. The
terms of any Sub-Servicing Agreement will not be inconsistent with any of the
provisions of this Agreement. Any material variations in any Sub-Servicing
Agreements from the provisions set forth in Section 3.08 relating to insurance
or priority requirements of Sub- Servicing Accounts, or credits and charges to
the Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the NIMS
Insurer and the Trustee copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instruments.

     (b) As part of its servicing activities hereunder, the Servicer, for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each Sub-Servicer under the related Sub-Servicing Agreement, including,
without limitation, any obligation to make advances

                                      -72-

<PAGE>

in respect of delinquent payments as required by a Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement, to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loans, or (ii) from a specific recovery of costs, expenses or attorneys' fees
against the party against whom such enforcement is directed.

     SECTION 3.03. Successor Sub-Servicers.

     The Servicer, with the consent of the NIMS Insurer, shall be entitled to
terminate any Sub-Servicing Agreement and the rights and obligations of any
Sub-Servicer pursuant to any Sub- Servicing Agreement in accordance with the
terms and conditions of such Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Servicer without any act or deed on the
part of such Sub-Servicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.

     Any Sub-Servicing Agreement shall include the provision that such agreement
may be immediately terminated by the Servicer or the Trustee (if the Trustee is
acting as Servicer) without fee, in accordance with the terms of this Agreement,
in the event that the Servicer (or the Trustee, if such party is then acting as
Servicer) shall, for any reason, no longer be the Servicer (including
termination due to a Servicer Event of Termination).

     SECTION 3.04. Liability of the Servicer.

     Notwithstanding any Sub-Servicing Agreement or the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee and the
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01, without diminution of such
obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into any agreement with a Sub-Servicer for indemnification of
the Servicer by such Sub- Servicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.

     SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the
          NIMS Insurer, Trustee or Certificateholders.

     Any Sub-Servicing Agreement that may be entered into and any transactions
or services relating to the Mortgage Loans involving a Sub-Servicer in its
capacity as such shall be deemed to be between the Sub-Servicer and the Servicer
alone, and the NIMS Insurer, the Trustee

                                      -73-

<PAGE>

or Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Sub-Servicer except as set forth in Section 3.06. The Servicer shall be solely
liable for all fees owed by it to any Sub-Servicer, irrespective of whether the
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.

     SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by
          Trustee.

     In the event the Servicer shall for any reason no longer be the servicer
(including by reason of the occurrence of a Servicer Event of Termination), the
Trustee shall thereupon assume all of the rights and obligations of the Servicer
under each Sub-Servicing Agreement that the Servicer may have entered into,
unless the Trustee elects to terminate any Sub-Servicing Agreement in accordance
with its terms as provided in Section 3.03. Upon such assumption, the Trustee
(or the successor servicer appointed pursuant to Section 7.02) shall be deemed,
subject to Section 3.03, to have assumed all of the departing Servicer's
interest therein and to have replaced the departing Servicer as a party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement
had been assigned to the assuming party, except that (i) the departing Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Servicer and (ii)
neither the Trustee nor any successor Servicer shall be deemed to have assumed
any liability or obligation of the Servicer that arose before it ceased to be
the Servicer.

     The Servicer at its expense shall, upon request of the Trustee, deliver to
the assuming party all documents and records relating to each Sub-Servicing
Agreement and the Mortgage Loans then being serviced and an accounting of
amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Sub-Servicing
Agreements to the assuming party.

     SECTION 3.07. Collection of Certain Mortgage Loan Payments.

     The Servicer shall make reasonable efforts, in accordance with the
servicing standards set forth in Section 3.01, to collect all payments called
for under the terms and provisions of the Mortgage Loans and the provisions of
any applicable insurance policies provided to the Servicer. Consistent with the
foregoing, the Servicer may in its discretion (i) waive any late payment charge
or, if applicable, any penalty interest, (ii) waive any provisions of any
Mortgage Loan requiring the related Mortgagor to submit to mandatory arbitration
with respect to disputes arising thereunder or (iii) extend the due dates for
the Monthly Payments due on a Mortgage Note for a period of not greater than 180
days; provided, however, that any extension pursuant to clause (iii) 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 (iii) above, the Servicer shall make timely
Advances on such Mortgage Loan during such extension pursuant to Section 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. 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

                                      -74-

<PAGE>

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").
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 or the Servicer's books and records.

     SECTION 3.08. Sub-Servicing Accounts.

     In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant
to a Sub- Servicing Agreement, the Sub-Servicer will be required to establish
and maintain one or more accounts (collectively, the "Sub-Servicing Account").
The Sub-Servicing Account shall be an Eligible Account and shall comply with all
requirements of this Agreement relating to the Collection Account. The
Sub-Servicer shall deposit in the clearing account in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Sub-Servicer's receipt thereof, all proceeds of
Mortgage Loans received by the Sub-Servicer less its servicing compensation to
the extent permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more than two
Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.

     SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing
          Accounts.

     The Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Servicing Accounts"), into which all
Escrow Payments shall be deposited and retained. Servicing Accounts shall be
Eligible Accounts. The Servicer shall deposit in the clearing account in which
it customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, all Escrow
Payments collected on account of the Mortgage Loans and shall thereafter deposit
such Escrow Payments in the Servicing Accounts, in no event more than two
Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to (i) effect
payment of taxes, assessments, hazard insurance premiums, and comparable items
in a manner and at a time that assures that the lien priority of the Mortgage is
not jeopardized (or, with respect to the payment of taxes, in a manner and at a
time that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a result of a tax lien); (ii) reimburse the Servicer (or a
Sub-Servicer to the extent provided in the related Sub- Servicing Agreement) out
of related collections for any Servicing Advances made pursuant to

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Section 3.01 (with respect to taxes and assessments) and Section 3.14 (with
respect to hazard insurance); (iii) refund to Mortgagors any sums as may be
determined to be overages; (iv) pay interest, if required and as described
below, to Mortgagors on balances in the Servicing Account; or (v) clear and
terminate the Servicing Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article X. In the event the Servicer shall deposit in a
Servicing Account any amount not required to be deposited therein or any amount
previously deposited therein is unpaid by the related Mortgagor's banking
institution, it may at any time withdraw such amount from such Servicing
Account, any provision herein to the contrary notwithstanding. The Servicer will
be responsible for the administration of the Servicing Accounts and will be
obligated to make Servicing Advances to such accounts when and as necessary to
avoid the lapse of insurance coverage on the Mortgaged Property, or which the
Servicer knows, or in the exercise of the required standard of care of the
Servicer hereunder should know, is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien. If any
such payment has not been made and the Servicer receives notice of a tax lien
with respect to the Mortgage being imposed, the Servicer will, within 10
Business Days of receipt of such notice, advance or cause to be advanced funds
necessary to discharge such lien on the Mortgaged Property. As part of its
servicing duties, the Servicer or Sub- Servicers shall pay to the Mortgagors
interest on funds in the Servicing Accounts, to the extent required by law and,
to the extent that interest earned on funds in the Servicing Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. The Servicer may pay to itself any excess interest on
funds in the Servicing Accounts, to the extent such action is in conformity with
the servicing standard set forth in Section 3.01, is permitted by law and such
amounts are not required to be paid to Mortgagors or used for any of the other
purposes set forth above.

     SECTION 3.10. Collection Account and Distribution Account.

     (a) On behalf of the Trust Fund, the Servicer shall establish and maintain,
or cause to be established and maintained, one or more accounts (such account or
accounts, the "Collection Account"), held in trust for the benefit of the
Trustee and the Certificateholders. On behalf of the Trust Fund, the Servicer
shall deposit or cause to be deposited in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the Servicer's receipt thereof, as and when received or as otherwise
required hereunder, the following payments and collections received or made by
it subsequent to the Cut-off Date (other than in respect of principal or
interest on the Mortgage Loans due on or before the Cut-off Date) or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:

          (i) all payments on account of principal, including Principal
     Prepayments (but not Prepayment Charges), on the Mortgage Loans;

          (ii) all payments on account of interest (net of the Servicing Fee) on
     each Mortgage Loan;

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<PAGE>

          (iii) all Insurance Proceeds, Liquidation Proceeds, Subsequent
     Recoveries and condemnation proceeds (other than proceeds collected in
     respect of any particular REO Property and amounts paid in connection with
     a purchase of Mortgage Loans and REO Properties pursuant to Section 9.01);

          (iv) any amounts required to be deposited pursuant to Section 3.12 in
     connection with any losses realized on Permitted Investments with respect
     to funds held in the Collection Account;

          (v) any amounts required to be deposited by the Servicer pursuant to
     the second paragraph of Section 3.14(a) in respect of any blanket policy
     deductibles;

          (vi) all proceeds of any Mortgage Loan repurchased or purchased in
     accordance with Section 2.03, Section 3.16(c) or Section 9.01;

          (vii) all amounts required to be deposited in connection with
     Substitution Adjustments pursuant to Section 2.03; and

          (viii) all Prepayment Charges collected by the Servicer and any
     Servicer Prepayment Charge Payment Amounts in connection with the Principal
     Prepayment of any of the Mortgage Loans.

     The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of Servicing Fees, late payment
charges, Prepayment Interest Excess, assumption fees, insufficient funds charges
and ancillary income (other than Prepayment Charges) need not be deposited by
the Servicer in the Collection Account and may be retained by the Servicer as
additional compensation. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.

     (b) On behalf of the Trust Fund, the Trustee shall establish and maintain
one or more accounts (such account or accounts, the "Distribution Account"),
held in trust for the benefit of the Trustee and the Certificateholders. On
behalf of the Trust Fund, the Servicer shall deliver to the Trustee in
immediately available funds for deposit in the Distribution Account on or before
1:00 p.m. New York time (i) on the Servicer Remittance Date, that portion of the
Available Funds (calculated without regard to the references in the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the Collection Account, the amount
of all Prepayment Charges collected during the applicable Prepayment Period by
the Servicer and Servicer Prepayment Charge Payment Amounts in connection with
the Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account, the amount of any funds reimbursable to an Advancing Person
pursuant to Section 3.29 (unless such amounts are to be remitted in another
manner as specified in the documentation establishing the related Advance
Facility) and (ii) on each Business Day as of the commencement of which the
balance on deposit in the Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess,
but

                                      -77-

<PAGE>

only if the Collection Account constitutes an Eligible Account solely pursuant
to clause (ii) of the definition of "Eligible Account." If the balance on
deposit in the Collection Account exceeds $75,000 as of the commencement of
business on any Business Day and the Collection Account does not qualify as an
Eligible Account pursuant to clauses (i), (iii) or (iv) of the definition of
"Eligible Account," the Servicer shall, on or before 1:00 p.m. New York time on
such Business Day, withdraw from the Collection Account any and all amounts
payable or reimbursable to the Servicer, the Advancing Person, the Trustee or
any Sub-Servicer pursuant to Section 3.11 and shall pay such amounts to the
Persons entitled thereto.

     (c) Funds in the Collection Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.12. The Servicer shall give written notice to the NIMS Insurer and the
Trustee of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the NIMS Insurer, the Servicer and the Depositor of the location of the
Distribution Account when established and prior to any change thereof.

     (d) Funds held in the Collection Account at any time may be delivered by
the Servicer to the Trustee for deposit in an account (which may be the
Distribution Account and must satisfy the standards for the Distribution Account
as set forth in the definition thereof) and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account; provided, however, that
the Trustee shall have the sole authority to withdraw any funds held pursuant to
this subsection (d). In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to it any such amount, any provision herein
to the contrary notwithstanding. In addition, the Servicer, with respect to
items (i) through (iv) below, shall deliver to the Trustee from time to time for
deposit, and the Trustee, with respect to items (i) through (iv) below, shall so
deposit, in the Distribution Account:

          (i) any Advances, as required pursuant to Section 4.04;

          (ii) any amounts required to be deposited pursuant to Section 3.23(d)
     or (f) in connection with any REO Property;

          (iii) any amounts to be paid by the Servicer in connection with a
     purchase of Mortgage Loans and REO Properties pursuant to Section 10.01;

          (iv) any Compensating Interest to be deposited pursuant to Section
     3.24 in connection with any Prepayment Interest Shortfall; and

          (v) any amounts required to be paid to the Trustee pursuant to the
     Agreement, including, but not limited to Section 3.06 and Section 7.02.

     SECTION 3.11. Withdrawals from the Collection Account and Distribution
          Account.

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<PAGE>

     (a) The Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in Section
4.04:

          (i) to remit to the Trustee for deposit in the Distribution Account
     the amounts required to be so remitted pursuant to Section 3.10(b) or
     permitted to be so remitted pursuant to the first sentence of Section
     3.10(d);

          (ii) subject to Section 3.16(d), to reimburse the Servicer for (a) any
     unreimbursed Advances to the extent of amounts received which represent
     Late Collections (net of the related Servicing Fees), Liquidation Proceeds
     and Insurance Proceeds on Mortgage Loans or REO Properties with respect to
     which such Advances were made in accordance with the provisions of Section
     4.04; or (b) without limiting any right of withdrawal set forth in clause
     (vi) below, any unreimbursed Advances that, upon a Final Recovery
     Determination with respect to such Mortgage Loan, are Nonrecoverable
     Advances, but only to the extent that Late Collections, Liquidation
     Proceeds and Insurance Proceeds received with respect to such Mortgage Loan
     are insufficient to reimburse the Servicer for such unreimbursed Advances;

          (iii) subject to Section 3.16 (d), to pay the Servicer or any
     Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed Servicing
     Advances with respect to each Mortgage Loan, but only to the extent of any
     Late Collections, Liquidation Proceeds and Insurance Proceeds received with
     respect to such Mortgage Loan or REO Property, and (c) without limiting any
     right of withdrawal set forth in clause (vi) below, any Servicing Advances
     made with respect to a Mortgage Loan that, upon a Final Recovery
     Determination with respect to such Mortgage Loan are Nonrecoverable
     Advances, but only to the extent that Late Collections, Liquidation
     Proceeds and Insurance Proceeds received with respect to such Mortgage Loan
     are insufficient to reimburse the Servicer or any Sub-Servicer for
     Servicing Advances;

          (iv) to pay to the Servicer as additional servicing compensation (in
     addition to the Servicing Fee) on the Servicer Remittance Date any interest
     or investment income earned on funds deposited in the Collection Account;

          (v) to pay itself or the Originator with respect to each Mortgage Loan
     that has previously been purchased or replaced pursuant to Section 2.03 or
     Section 3.16(c) all amounts received thereon subsequent to the date of
     purchase or substitution, as the case may be;

          (vi) to reimburse the Servicer for any Advance or Servicing Advance
     previously made which the Servicer has determined to be a Nonrecoverable
     Advance in accordance with the provisions of Section 4.04;

          (vii) to pay, or to reimburse the Servicer for Servicing Advances in
     respect of, expenses incurred in connection with any Mortgage Loan pursuant
     to Section 3.16(b);

          (viii) to reimburse the Servicer for expenses incurred by or
     reimbursable to the Servicer pursuant to Section 6.03;

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<PAGE>

          (ix) to reimburse the NIMS Insurer, the Servicer (if the Servicer is
     not an Affiliate of the Originator) or the Trustee, as the case may be, for
     the enforcement expenses reasonably incurred in respect of the breach or
     defect giving rise to the purchase obligation under Section 2.03 of this
     Agreement that were included in the Purchase Price of the Mortgage Loan,
     including any expenses arising out of the enforcement of the purchase
     obligation;

          (x) to pay itself any Prepayment Interest Excess (to the extent not
     otherwise retained); and

          (xi) to clear and terminate the Collection Account pursuant to Section
     9.01.

     The foregoing requirements for withdrawal from the Collection Account shall
be exclusive. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein or any amount previously
deposited therein is unpaid by the related Mortgagor's banking institution, it
may at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.

                  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, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The
Servicer shall provide written notification to the NIMS Insurer and the Trustee,
on or prior to the next succeeding Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclause (vi) above;
provided that an Officers' Certificate in the form described under Section
4.04(d) shall suffice for such written notification to the Trustee in respect
hereof.

                  (b) The Trustee shall, from time to time, make withdrawals
         from the Distribution Account, for any of the following purposes,
         without priority:

                  (i) to make distributions in accordance with Section 4.01;

                  (ii) to pay itself the Trustee Fee and any Extraordinary Trust
         Fund Expenses pursuant to Section 8.05;

                  (iii) to pay any amounts in respect of taxes pursuant to
         Section 10.01(g);

                  (iv) to clear and terminate the Distribution Account pursuant
         to Section 9.01;

                  (v) to pay any amounts required to be paid to the Trustee
         pursuant to this Agreement, including but not limited to funds required
         to be paid pursuant to Section 3.06, Section 7.02 and Section 8.05;

                  (vi) to pay to the Trustee, any interest or investment income
         earned on funds deposited in the Distribution Account;

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<PAGE>

          (vii) to pay to an Advancing Person reimbursements for Advances and/or
     Servicing Advances pursuant to Section 3.29; and

          (viii) to pay the Credit Risk Manager the Credit Risk Manager Fee.

     SECTION 3.12. Investment of Funds in the Collection Account and the
          Distribution Account.

     (a) The Servicer may direct any depository institution maintaining the
Collection Account and REO Account to invest the funds on deposit in such
accounts, and the Trustee may direct any depository institution maintaining the
Distribution Account to invest the funds on deposit in such account or to hold
such funds uninvested (each such account, for the purposes of this Section 3.12,
an "Investment Account"). All investments pursuant to this Section 3.12 shall be
in one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon or if such investment is managed or advised by a Person
other than the Trustee or an Affiliate of the Trustee, and (ii) no later than
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Trustee is the obligor thereon or if such
investment is managed or advised by the Trustee or any Affiliate. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name of the
Trustee (in its capacity as such), or in the name of a nominee of the Trustee.
The Trustee shall be entitled to sole possession (except with respect to
investment direction of funds held in the Collection Account and REO Account and
any income and gain realized thereon) over each such investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall:

          (x) consistent with any notice required to be given thereunder, demand
     that payment thereon be made on the last day such Permitted Investment may
     otherwise mature hereunder in an amount equal to the lesser of (1) all
     amounts then payable thereunder and (2) the amount required to be withdrawn
     on such date; and

          (y) demand payment of all amounts due thereunder promptly upon
     determination by a Responsible Officer of the Trustee that such Permitted
     Investment would not constitute a Permitted Investment in respect of funds
     thereafter on deposit in the Investment Account.

     (b) All income and gain realized from the investment of funds deposited in
the Collection Account and any REO Account held by or on behalf of the Servicer
shall be for the benefit of the Servicer and shall be subject to its withdrawal
in accordance with Section 3.11 or Section 3.23, as applicable. The Servicer
shall deposit in the Collection Account or any REO Account, as applicable, the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such Account immediately upon realization of such
loss.

                                      -81-

<PAGE>

     (c) All income and gain realized from the investment of funds deposited in
the Distribution Account shall be for the benefit of the Trustee. The Trustee
shall deposit in the Distribution Account the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
Account immediately upon realization of such loss. Notwithstanding the
foregoing, the Trustee may at its discretion, and without liability, hold the
funds in the Distribution Account uninvested.

     (d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the NIMS Insurer or the Holders of Certificates representing
more than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.

     SECTION 3.13. [Reserved].

     SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and
          Fidelity Coverage.

     (a) The Servicer shall cause to be maintained for each Mortgage Loan hazard
insurance with extended coverage on the Mortgaged Property in an amount which is
at least equal to the least of (i) the current Principal Balance of such
Mortgage Loan, (ii) the amount necessary to fully compensate for any damage or
loss to the improvements that are a part of such property on a replacement cost
basis and (iii) the maximum insurable value of the improvements which are part
of such Mortgaged Property, in each case in an amount not less than such amount
as is necessary to avoid the application of any coinsurance clause contained in
the related hazard insurance policy. The Servicer shall also cause to be
maintained hazard insurance with extended coverage on each REO Property in an
amount which is at least equal to the least of (i) the maximum insurable value
of the improvements which are a part of such property, (ii) the outstanding
Principal Balance of the related Mortgage Loan at the time it became an REO
Property and (iii) the maximum insurable value of the improvements which are
part of such REO Property. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11, if received in respect
of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to
Section 3.23, if received in respect of an REO Property. Any cost incurred by
the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
Principal Balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor 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
or REO Property is at any time in an area

                                      -82-

<PAGE>

identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards and flood insurance has been made available, the
Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the least of (i)
the unpaid Principal Balance of the related Mortgage Loan, (ii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program) and (iii) the maximum
insurable value of the improvements which are part of such Mortgaged Property.

     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 two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by competent servicers, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property or REO Property a policy complying with the
first two sentences of this Section 3.14, and there shall have been one or more
losses which would have been covered by such policy, deposit to the Collection
Account from its own funds 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 prepare and present, on
behalf of itself, the Trustee and Certificateholders, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.

     (b) The Servicer shall keep in force during the term of this Agreement a
policy or policies of insurance covering errors and omissions for failure in the
performance of the Servicer's obligations under this Agreement, which policy or
policies shall be in such form and amount that would meet the requirements of
Fannie Mae or Freddie Mac if it were the purchaser of the Mortgage Loans, unless
the Servicer has obtained a waiver of such requirements from Fannie Mae or
Freddie Mac. The Servicer shall also maintain a fidelity bond in the form and
amount that would meet the requirements of Fannie Mae or Freddie Mac, unless the
Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie
Mac. The Servicer shall be deemed to have complied with this provision if an
Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days' prior written notice to the Trustee and the NIMS Insurer. The
Servicer shall also cause each Sub-Servicer to maintain a policy of insurance
covering errors and omissions and a fidelity bond which would meet such
requirements.

     SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.

     The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if in its sole business
judgment the Servicer believes it is not in

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<PAGE>

the best interests of the Trust Fund and shall not exercise any such rights if
prohibited by law from doing so. If the Servicer reasonably believes it is
unable under applicable law to enforce such "due- on-sale" clause, or if any of
the other conditions set forth in the proviso to the preceding sentence apply,
the Servicer will enter into an assumption and modification agreement from or
with the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Servicer is also authorized, to the extent permitted under
the related Mortgage Note, 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 the Mortgagor and becomes liable
under the Mortgage Note, provided that no such substitution shall be effective
unless such person satisfies the underwriting criteria of the Servicer for a
mortgage loan similar to the Mortgage Loan. In connection with any assumption,
modification or substitution, the Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
in its general mortgage servicing activities and as it applies to other mortgage
loans owned solely by it. The Servicer shall not take or enter into any
assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Servicer in respect of an assumption,
modification or substitution of liability agreement shall be retained by the
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Monthly Payment) may be amended
or modified, except as otherwise required pursuant to the terms thereof. The
Servicer shall notify the Trustee and the Custodian that any such substitution,
modification or assumption agreement has been completed by forwarding to the
Custodian the executed original of such substitution, modification or assumption
agreement, which document shall be added to the related Mortgage File and 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.

     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 by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.

     SECTION 3.16. Realization Upon Defaulted Mortgage Loans.

     (a) The Servicer shall use its best efforts, consistent with the servicing
standards 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 pursuant to Section 3.07. The
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Servicer as contemplated in Section
3.11(a) and Section 3.23. The foregoing is subject to the provision that, in any
case in which a Mortgaged Property shall have suffered damage

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from an Uninsured Cause, the Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.

     (b) Notwithstanding the foregoing provisions of this Section 3.16 or any
other provision of this Agreement, with respect to any Mortgage Loan as to which
the Servicer has received actual notice of, or has actual knowledge of, the
presence of any toxic or hazardous substance on the related Mortgaged Property,
the Servicer shall not, on behalf of the Trustee, either (i) obtain title to
such Mortgaged Property as a result of or in lieu of foreclosure or otherwise,
or (ii) otherwise acquire possession of, or take any other action with respect
to, such Mortgaged Property, if, as a result of any such action, the Trustee,
the Trust Fund or the Certificateholders would be considered to hold title to,
to be a "mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Servicer has also previously determined, based
on its reasonable judgment and a report prepared by a Person who regularly
conducts environmental audits using customary industry standards, that:

          (1) such Mortgaged Property is in compliance with applicable
     environmental laws or, if not, that it would be in the best economic
     interest of the Trust Fund to take such actions as are necessary to bring
     the Mortgaged Property into compliance therewith; and

          (2) there are no circumstances present at such Mortgaged Property
     relating to the use, management or disposal of any hazardous substances,
     hazardous materials, hazardous wastes, or petroleum-based materials for
     which investigation, testing, monitoring, containment, clean-up or
     remediation could be required under any federal, state or local law or
     regulation, or that if any such materials are present for which such action
     could be required, that it would be in the best economic interest of the
     Trust Fund to take such actions with respect to the affected Mortgaged
     Property.

     The Servicer shall forward a copy of the environmental audit report to the
Depositor and the NIMS Insurer. Notwithstanding the foregoing, if such
environmental audit reveals, or if the Servicer has actual knowledge or notice,
that such Mortgaged Property contains such wastes or substances, the Servicer
shall not foreclose or accept a deed in lieu of foreclosure without the prior
written consent of the NIMS Insurer.

     The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Collection Account as provided in Section
3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.

     If the Servicer determines, as described above, that it is in the best
economic interest of the Trust Fund to take such actions as are necessary to
bring any such Mortgaged Property into

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compliance with applicable environmental laws, or to take such action with
respect to the containment, clean-up or remediation of hazardous substances,
hazardous materials, hazardous wastes or petroleum-based materials affecting any
such Mortgaged Property, then the Servicer shall take such action as it deems to
be in the best economic interest of the Trust Fund; provided that any amounts
disbursed by the Servicer pursuant to this Section 3.16(b) shall constitute
Servicing Advances, subject to Section 4.04(d). The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(vii), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

     (c) The Servicer or the NIMS Insurer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Servicer has accepted a deed in lieu of foreclosure. Prior to purchase pursuant
to this Section 3.16(c), the Servicer shall be required to continue to make
Advances pursuant to Section 4.04. If the Servicer or the NIMS Insurer purchases
any delinquent Mortgage Loans pursuant to this Section 3.16(c), it must purchase
Mortgage Loans that are delinquent the greatest number of days before it may
purchase any that are delinquent any fewer number of days. The Servicer or the
NIMS Insurer shall purchase such delinquent Mortgage Loan at a price equal to
the Purchase Price of such Mortgage Loan. Any such purchase of a Mortgage Loan
pursuant to this Section 3.16(c) shall be accomplished by deposit in the
Collection Account of the amount of the Purchase Price. Upon the satisfaction of
the requirements set forth in Section 3.17(a), the Trustee shall immediately
deliver the Mortgage File and any related documentation to the Servicer or the
NIMS Insurer and will execute such documents provided to it as are necessary to
convey the Mortgage Loan to the Servicer or the NIMS Insurer, as applicable.

     (d) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of any
Mortgage Loan, will be applied in the following order of priority: first, to
unpaid Servicing Fees; second, to reimburse the Servicer or any Sub-Servicer for
any related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and
Advances pursuant to Section 3.11(a)(ii); third, to accrued and unpaid interest
on the Mortgage Loan, to the date of the Final Recovery Determination, or to the
Due Date prior to the Distribution Date on which such amounts are to be
distributed if not in connection with a Final Recovery Determination; and
fourth, as a recovery of principal of the Mortgage Loan. The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).

     SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.

     (a) Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full shall be escrowed in a manner
customary for such purposes, the Servicer will immediately notify or cause to be
notified the Custodian by a certification and shall deliver to the Custodian, in
written (with two executed copies) or electronic format, a Request for Release
in the form of Exhibit E hereto (which certification shall include a statement
to the effect that all amounts received or to be received in connection with
such payment which are required to

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be deposited in the Collection Account pursuant to Section 3.10 have been or
will be so deposited) signed by a Servicing Officer (or in a mutually agreeable
electronic format that will, in lieu of a signature on its face, originate from
a Servicing Officer) and shall request delivery to it of the Mortgage File. Upon
receipt of such certification and request and pursuant to the terms of the
Custodial Agreement, the Custodian shall, within three Business Days, release
the related Mortgage File to the Servicer and the Servicer is authorized to
cause the removal from the registration on the MERS(R) System of any such
Mortgage Loan, if applicable. Except as otherwise provided herein, no expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.

     (b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
insurance policy relating to the Mortgage Loans, the Custodian, pursuant to the
terms of the Custodial Agreement shall, upon any request made by or on behalf of
the Servicer and delivery to the Custodian, in written (with two executed
copies) or electronic format, of a Request for Release in the form of Exhibit E
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer),
release the related Mortgage File to the Servicer within three Business Days,
and the Custodian shall, at the written direction of the Servicer, execute such
documents as shall be necessary to the prosecution of any such proceedings. Such
Request for Release shall obligate the Servicer to return each and every
document previously requested from the Mortgage File to the Custodian when the
need therefor by the Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or the Mortgage File or such document
has 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 either
judicially or non-judicially, and the Servicer has delivered, or caused to be
delivered, to the Custodian an additional Request for Release certifying as to
such liquidation or action or proceedings. Upon the request of the Trustee, the
Servicer shall provide notice to the Trustee of the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a Request for Release, in
written (with two executed copies) or electronic format, from a Servicing
Officer stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation that are required
to be deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, such Mortgage Loan shall be released
by the Custodian to the Servicer or its designee.

     (c) Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer or the Sub-Servicer, as the case may be,
copies of, any court pleadings, requests for trustee's sale or other documents
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Each such certification shall
include a request that such pleadings or documents be executed by the Trustee
and a statement as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of

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the Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.

     SECTION 3.18. Servicing Compensation.

     As compensation for the activities of the Servicer hereunder, the Servicer
shall be entitled to the Servicing Fee with respect to each Mortgage Loan
payable solely from payments of interest in respect of such Mortgage Loan,
subject to Section 3.24. In addition, the Servicer shall be entitled to recover
unpaid Servicing Fees out of Insurance Proceeds, Liquidation Proceeds or
condemnation proceeds to the extent permitted by Section 3.11(a)(iii) and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.23. Except as provided in Section 3.29 or Section 6.04,
the right to receive the Servicing Fee may not be transferred in whole or in
part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement; provided, however, that
the Servicer may pay from the Servicing Fee any amounts due to a Sub-Servicer
pursuant to a Sub-Servicing Agreement entered into under Section 3.02.

     Additional servicing compensation in the form of assumption fees, late
payment charges, insufficient funds charges, ancillary income or otherwise
(other than Prepayment Charges) shall be retained by the Servicer only to the
extent such fees or charges are received by the Servicer. The Servicer shall
also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Servicer shall also be
entitled to receive Prepayment Interest Excess pursuant to Section 3.10 and 3.11
as additional servicing compensation. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including premiums for the insurance required by Section 3.14, to the extent
such premiums are not paid by the related Mortgagors or by a Sub-Servicer and
servicing compensation of each Sub-Servicer) and shall not be entitled to
reimbursement therefor except as specifically provided herein.

     SECTION 3.19. Reports to the Trustee; Collection Account Statements.

     Not later than twenty days after each Distribution Date, the Servicer shall
forward, upon request, to the Trustee, the NIMS Insurer 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.

     SECTION 3.20. Statement as to Compliance.

     The Servicer will deliver to the Trustee, the NIMS Insurer and the
Depositor not later than March 15th of each calendar year, commencing in 2005,
an Officers' Certificate (in a form similar to Exhibit G attached hereto)
stating, as to each signatory thereof, that (i) a review of the activities of
the Servicer during the preceding year and of performance under this Agreement
has been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based

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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
officer and the nature and status thereof. Copies of any 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. In addition to the foregoing, the Servicer will, to the
extent reasonable, give any other servicing information required by the
Securities and Exchange Commission pursuant to applicable law.

     SECTION 3.21. Independent Public Accountants' Servicing Report.

     Not later than March 15th of each calendar year, commencing in 2005, the
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer a report
stating that (i) it has obtained a letter of representation regarding certain
matters from the management of the Servicer which includes an assertion that the
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with respect
to the servicing of residential mortgage loans during the most recently
completed calendar year and (ii) on the basis of an examination conducted by
such firm in accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report such firm may rely, as to matters
relating to the direct servicing of residential mortgage loans by Sub-Servicers,
upon comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Sub-Servicers. Immediately upon receipt of such report, the Servicer shall
furnish a copy of such report to the Trustee, the NIMS Insurer and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the expense of the requesting party, provided
that such statement is delivered by the Servicer to the Trustee.

     SECTION 3.22. Access to Certain Documentation; Filing of Reports by
          Trustee.

     The Servicer shall provide to the Office of Thrift Supervision, the FDIC,
and any other federal or state banking or insurance regulatory authority that
may exercise authority over any Certificateholder, access to the documentation
regarding the Mortgage Loans required by applicable laws and regulations. Such
access shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the Servicer designated by it.
Nothing in this Section shall limit the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors (absent proof that it is in compliance with applicable law) 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. In
addition, access to the documentation regarding the Mortgage Loans will be
provided to the NIMS Insurer, the Trustee, on behalf of the Certificateholders
or a prospective transferee of a Certificate, upon reasonable request during
normal business hours at the offices of the Servicer designated by it at the
expense of the Person requesting such access. Nothing in this Section 3.22 shall
require the Servicer to collect, create, collate or

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otherwise generate any information that it does not generate in its usual course
of business. The Servicer shall not be required to make copies of or ship
documents to any party unless provisions have been made for the reimbursement of
the costs thereof.

     SECTION 3.23. Title, Management and Disposition of REO Property.

     (a) The deed or certificate of sale of any REO Property shall, subject to
applicable laws, be taken in the name of the Trustee, or its nominee, in trust
for the benefit of the Certificateholders. The Servicer, on behalf of REMIC 1,
shall sell any REO Property as soon as practicable and in any event no later
than the end of the third full taxable year after the taxable year in which such
REMIC acquires ownership of such REO Property for purposes of Section 860G(a)(8)
of the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire, an
extension of such three-year period, unless the Servicer shall have delivered to
the Trustee and the NIMS Insurer an Opinion of Counsel acceptable to the NIMS
Insurer and addressed to the Trustee, the NIMS Insurer and the Depositor, to the
effect that the holding by the REMIC of such REO Property subsequent to three
years after its acquisition will not result in the imposition on the REMIC of
taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause any of the REMICs created hereunder to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any of the REMICs created hereunder of any "income from
non- permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.

     (b) The Servicer shall separately account for all funds collected and
received in connection with the operation of any REO Property and shall
establish and maintain, or cause to be established and maintained, with respect
to REO Properties an account held in trust for the Trustee for the benefit of
the Certificateholders (the "REO Account"), which shall be an Eligible Account.
The Servicer shall be permitted to allow the Collection Account to serve as the
REO Account, subject to separate ledgers for each REO Property. The Servicer
shall be entitled to retain or withdraw any interest income paid on funds
deposited in the REO Account.

     (c) The Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property as are consistent with the manner in
which the Servicer manages and operates similar property owned by the Servicer
or any of its Affiliates, all on such terms and for such period (subject to the
requirement of prompt disposition set forth in Section 3.23(a)) as the Servicer
deems to be in the best interests of Certificateholders. In connection
therewith, the Servicer shall deposit, or cause to be deposited in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, and shall thereafter deposit in the REO Account, in no event more than
two Business Days after the Servicer's receipt thereof, all revenues received by
it with respect to an REO Property and shall withdraw therefrom funds

                                      -90-

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necessary for the proper operation, management and maintenance of such REO
Property including, without limitation:

          (i) all insurance premiums due and payable in respect of such REO
     Property;

          (ii) all real estate taxes and assessments in respect of such REO
     Property that may result in the imposition of a lien thereon; and

          (iii) all costs and expenses necessary to maintain, operate and
     dispose of such REO Property.

     To the extent that amounts on deposit in the REO Account with respect to an
REO Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Servicer shall advance from
its own funds such amount as is necessary for such purposes if, but only if, the
Servicer would make such advances if the Servicer owned the REO Property and if
in the Servicer's judgment, the payment of such amounts will be recoverable from
the rental or sale of the REO Property.

     Notwithstanding the foregoing, neither the Servicer nor the Trustee shall:

          (A) authorize the Trust Fund to enter into, renew or extend any New
     Lease with respect to any REO Property, if the New Lease by its terms will
     give rise to any income that does not constitute Rents from Real Property;

          (B) authorize any amount to be received or accrued under any New Lease
     other than amounts that will constitute Rents from Real Property;

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

          (D) authorize any Person to Directly Operate any REO Property on any
     date more than 90 days after its date of acquisition by the Trust Fund;

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

     The Servicer may contract with any Independent Contractor for the operation
and management of any REO Property, provided that:

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          (1) the terms and conditions of any such contract shall not be
     inconsistent herewith;

          (2) any such contract shall require, or shall be administered to
     require, that the Independent Contractor pay all costs and expenses
     incurred in connection with the operation and management of such REO
     Property, including those listed above and remit all related revenues (net
     of such costs and expenses) to the Servicer as soon as practicable, but in
     no event later than thirty days following the receipt thereof by such
     Independent Contractor;

          (3) none of the provisions of this Section 3.23(c) relating to any
     such contract or to actions taken through any such Independent Contractor
     shall be deemed to relieve the Servicer of any of its duties and
     obligations to the Trustee on behalf of the Certificateholders with respect
     to the operation and management of any such REO Property; and

          (4) the Servicer shall be obligated with respect thereto to the same
     extent as if it alone were performing all duties and obligations in
     connection with the operation and management of such REO Property.

     The Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. The Servicer shall be solely liable for all fees owed by
it to any such Independent Contractor, irrespective of whether the Servicer's
compensation pursuant to Section 3.18 is sufficient to pay such fees; provided,
however, that to the extent that any payments made by such Independent
Contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the Servicer.

     (d) In addition to the withdrawals permitted under Section 3.23(c), the
Servicer may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer
for unreimbursed Servicing Advances and Advances made in respect of such REO
Property or the related Mortgage Loan. On the Servicer Remittance Date, the
Servicer shall withdraw from each REO Account maintained by it and deposit into
the Distribution Account in accordance with Section 3.10(d)(ii), for
distribution on the related Distribution Date in accordance with Section 4.01,
the income from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.23(c) or this Section
3.23(d).

     (e) Subject to the time constraints set forth in Section 3.23(a), each REO
Disposition shall be carried out by the Servicer in a manner, at such price and
upon such terms and conditions as shall be normal and usual in the servicing
standard set forth in Section 3.01.

     (f) The proceeds from the REO Disposition, net of any amount required by
law to be remitted to the Mortgagor under the related Mortgage Loan and net of
any payment or reimbursement to the Servicer or any Sub-Servicer as provided
above, shall be deposited in the Distribution Account in accordance with Section
3.10(d)(ii) on the Servicer Remittance Date in the month following the receipt
thereof for distribution on the related Distribution Date in accordance

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with Section 4.01. Any REO Disposition shall be for cash only (unless changes in
the REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).

     (g) The Servicer shall file information returns with respect to the receipt
of mortgage interest received in a trade or business, reports of foreclosures
and abandonments of any Mortgaged Property and cancellation of indebtedness
income with respect to any Mortgaged Property as required by Sections 6050H,
6050J and 6050P of the Code, respectively. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such Sections
6050H, 6050J and 6050P of the Code.

     SECTION 3.24. Obligations of the Servicer in Respect of Prepayment Interest
          Shortfalls.

     Not later than 1:00 p.m. New York time on each Servicer Remittance Date,
the Servicer shall remit to the Distribution Account an amount ("Compensating
Interest") equal to the lesser of (A) the aggregate of the Prepayment Interest
Shortfalls for the related Distribution Date and (B) its aggregate Servicing Fee
received in the related Due Period. The Servicer shall not have the right to
reimbursement for any amounts remitted to the Trustee in respect of Compensating
Interest. Such amounts so remitted shall be included in the Available Funds and
distributed therewith on the next Distribution Date. The Servicer shall not be
obligated to pay Compensating Interest with respect to Relief Act Interest
Shortfalls.

     SECTION 3.25. [Reserved].

     SECTION 3.26. Obligations of the Servicer in Respect of Mortgage Rates and
          Monthly Payments.

     In the event that a shortfall in any collection on or liability with
respect to the Mortgage Loans in the aggregate results from or is attributable
to adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deposit in the Collection Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor and any successor servicer
in respect of any such liability. Such indemnities shall survive the termination
or discharge of this Agreement. Notwithstanding the foregoing, this Section 3.26
shall not limit the ability of the Servicer to seek recovery of any such amounts
from the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law.

     SECTION 3.27. [Reserved].

     SECTION 3.28. [Reserved]

     SECTION 3.29. Advance Facility.

                                      -93-

<PAGE>

     The Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility") under which (1) the
Servicer sells, assigns or pledges to another Person (together with such
Person's successors and assigns, 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 and/or
Servicing Advances required to be made by the Servicer pursuant to this
Agreement. No consent of the Depositor, the Trustee, the Certificateholders or
any other party shall be required before the Servicer may enter into an Advance
Facility. The Servicer shall notify each other party to this Agreement prior to
or promptly after entering into or terminating any 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.
If the Servicer enters into an Advance Facility, and for so long as an Advancing
Person remains entitled to receive reimbursement for any Advances including
Nonrecoverable Advances ("Advance Reimbursement Amounts") and/or Servicing
Advances including Nonrecoverable Advances ("Servicing Advance Reimbursement
Amounts" and together with Advance Reimbursement Amounts, "Reimbursement
Amounts") (in each case to the extent such type of Reimbursement Amount is
included in the Advance Facility), as applicable, pursuant to this Agreement,
then, the Servicer shall identify such Reimbursement Amounts consistent with the
reimbursement rights set forth in Section 3.11(a)(ii), (iii), (vi) and (vii) and
remit such Reimbursement Amounts in accordance with Section 3.10(b) or otherwise
in accordance with the documentation establishing the Advance Facility to such
Advancing Person or to a trustee, agent or custodian (an "Advance Facility
Trustee") designated by such Advancing Person. Notwithstanding anything to the
contrary herein, in no event shall Advance Reimbursement Amounts or Servicing
Advance Reimbursement Amounts be included in the Available Funds or distributed
to Certificateholders.

     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 or the Advancing Person had made the
related Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing,
except with respect to reimbursement of Nonrecoverable Advances as set forth in
this Agreement, no Person shall be entitled to reimbursement from funds held in
the Collection Account for future distribution to Certificateholders pursuant to
this Agreement. None of the Depositor or the Trustee shall have any duty or
liability with respect to the calculation or payment of any Reimbursement
Amount, nor shall the Depositor or the Trustee have any responsibility to track
or monitor the administration of the Advance Facility or the payment of
Reimbursement Amounts to the related Advancing Person or Advance Facility
Trustee. The Servicer shall maintain and provide to any successor servicer and
(upon request) the Trustee a detailed accounting on a loan by loan basis as to
amounts advanced by, sold, 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 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 or purchase of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
subservicer set forth in this Agreement.

                                      -94-

<PAGE>

     Reimbursement Amounts distributed with respect to each Mortgage Loan shall
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 Advance Facility Trustee loan by loan
information with respect to each Reimbursement Amount distributed to such
Advancing Person or Advance Facility Trustee, to enable the Advancing Person or
Advance Facility Trustee to make the FIFO allocation of each Reimbursement
Amount with respect to each Mortgage Loan. The Servicer shall remain entitled to
be reimbursed 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.

     The Servicer shall indemnify the Depositor, the Trustee, any successor
servicer and the Trust Fund resulting from any claim by the related Advancing
Person arising out of the Advance Facility, except to the extent that such
claim, loss, liability or damage resulted from or arose out of negligence,
recklessness or willful misconduct or breach of its duties hereunder on the part
of the Depositor, the Trustee or any successor servicer.

     Any amendment to this Section 3.29 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 3.29, including amendments to
add provisions relating to a successor servicer, may be entered into by the
Trustee, the Depositor and the Servicer without the consent of any
Certificateholder, provided such amendment complies with Section 11.01 hereof.
All reasonable costs and expenses (including attorneys' fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. Prior to
entering into an Advance Facility, the Servicer shall notify the Advancing
Person in writing that: (a) the Advances and/or Servicing Advances purchased,
financed by and/or pledged to the Advancing Person are obligations owed to the
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances and/or Servicing
Advances only to the extent provided herein, and the Trustee and the Trust are
not otherwise obligated or liable to repay any Advances and/or Servicing
Advances financed by the Advancing Person; (b) the Servicer will be responsible
for remitting to the Advancing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advancing
Person, 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 Advance Facility between the Servicer and the Advancing
Person.

                                      -95-

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

     SECTION 4.01. Distributions.

     (a)(1) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC I to REMIC II on account of the
REMIC I Regular Interests or withdrawn from the Distribution Account and
distributed to the holders of the Class R Certificates (in respect of the Class
R-I Interest), as the case may be:

          (i) (a) to Holders of REMIC I Regular Interest I-LTAA, REMIC I Regular
     Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
     I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3,
     REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
     Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
     Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
     I-LTM10, REMIC I Regular Interest I-LTZZ and REMIC I Regular Interest
     I-LTP, PRO RATA, in an amount equal to (A) the Uncertificated Interest for
     such Distribution Date, plus (B) any amounts in respect thereof remaining
     unpaid from previous Distribution Dates. Amounts payable as Uncertificated
     Interest in respect of REMIC I Regular Interest I-LTZZ shall be reduced and
     deferred when the REMIC I Overcollateralized Amount is less than the REMIC
     I Required Overcollateralization Amount, by the lesser of (x) the amount of
     such difference and (y) the Maximum I-LTZZ Uncertificated Interest Deferral
     Amount and such amount will be payable to the Holders of REMIC I Regular
     Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
     I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3,
     REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
     Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
     Interest I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC I Regular
     Interest I-LTM10 in the same proportion as the Overcollateralization
     Deficiency Amount is allocated to the Corresponding Certificates and the
     Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be
     increased by such amount; and

          (b) to Holders of REMIC I Regular Interest I-LT1SUB, REMIC I Regular
     Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB, REMIC I Regular
     Interest I- LT2GRP, REMIC I Regular Interest I-LT3SUB, REMIC I Regular
     Interest I-LT3GRP and REMIC I Regular Interest I-LTXX, PRO RATA, in an
     amount equal to (A) the Uncertificated Interest for such Distribution Date,
     plus (B) any amounts in respect thereof remaining unpaid from previous
     Distribution Dates;

          (ii) second, to the Holders of REMIC I Regular Interests, in an amount
     equal to the remainder of the REMIC I Marker Allocation Percentage of
     Available Funds for such Distribution Date after the distributions made
     pursuant to clause (i) above, allocated as follows:

                                      -96-

<PAGE>

          (a) 98.00% of such remainder to the Holders of REMIC I Regular
     Interest I- LTAA and REMIC I Regular Interest I-LTP, until the
     Uncertificated Balance of such REMIC I Regular Interest is reduced to zero,
     provided, however, that REMIC I Regular Interest I- LTP shall not be
     reduced until the Distribution Date immediately following the expiration of
     the latest Prepayment Charge as identified on the Prepayment Charge
     Schedule or any Distribution Date thereafter, at which point such amount
     shall be distributed to REMIC I Regular Interest I-LTP, until $100 has been
     distributed pursuant to this clause;

          (b) 2.00% of such remainder, first to the Holders of REMIC I Regular
     Interest I- LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
     I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3,
     REMIC I Regular Interest I- LTM4, REMIC I Regular Interest I-LTM5, REMIC I
     Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
     Interest I-LTM8, REMIC I Regular Interest I- LTM9 and REMIC I Regular
     Interest I-LTM10, equal to 1.00% of and in the same proportion as principal
     payments are allocated to the Corresponding Certificates, until the
     Uncertificated Balances of such REMIC I Regular Interests are reduced to
     zero and second, to the Holders of REMIC I Regular Interest I-LTZZ, 1.00%,
     until the Uncertificated Balance of such REMIC I Regular Interest is
     reduced to zero; and

          (c) any remaining amount to the Holders of the Class R Certificates
     (in respect of the Class R-I Interest);

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC I Regular Interest I-LTAA and REMIC I Regular Interest
I-LTP, in that order and (ii) REMIC I Regular Interest I-LTZZ, respectively;
provided that REMIC I Regular Interest I-LTP shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest I-LTP, until $100 has been distributed pursuant to this clause.

     On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Mortgage Loans during the related Prepayment Period and any
Servicer Prepayment Charge Payment Amount paid by the Servicer during the
related Prepayment Period will be distributed by REMIC I to the Holders of REMIC
I Regular Interest I-LTP. The payment of the foregoing amounts to the Holders of
REMIC I Regular Interest I-LTP shall not reduce the Uncertificated Balance
thereof.

          (iii) to the Holders of REMIC I Regular Interests, in an amount equal
     to the remainder of the REMIC I Sub WAC Allocation Percentage of Available
     Funds for such Distribution Date after the distributions made pursuant to
     clause (i) above, allocated so that distributions of principal shall be
     deemed to be made to the REMIC I Regular Interests first, so as to keep the
     Uncertificated Balance of each REMIC I Regular Interest ending with the
     designation "GRP" equal to 0.01% of the aggregate Stated Principal Balance
     of the Mortgage Loans in the related Loan Group; second, to each REMIC I
     Regular Interest ending with the designation "SUB," so that the
     Uncertificated Balance of each such REMIC I Regular

                                      -97-

<PAGE>

     Interest is equal to 0.01% of the excess of (x) the aggregate Stated
     Principal Balance of the Mortgage Loans in the related Loan Group over (y)
     the Certificate Principal Balance of the Class A Certificate in the related
     Loan Group (except that if any such excess is a larger number than in the
     preceding distribution period, the least amount of principal shall be
     distributed to such REMIC I Regular Interests such that the REMIC I
     Subordinated Balance Ratio is maintained); and third, any remaining
     principal to REMIC I Regular Interest I- LTXX.

     (iv) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC II to REMIC III on account of
the REMIC II Regular Interests or withdrawn from the Distribution Account and
distributed to the holders of the Class R Certificates (in respect of the Class
R-II Interest), as the case may be:

     (c) (i) Interest shall be payable to each REMIC II Regular Interests in an
     amount equal to the aggregate amount of Monthly Interest Distributable
     Amount that would result under the terms of the definition thereof on the
     REMIC III Certificates (other than the Class R Certificates) if the
     Pass-Through Rate on each such Class were equal to the REMIC II Remittance
     Rate and the Uncertificated Balances were the Certificate Principal
     Balances. Principal shall be payable to, and shortfalls, losses and
     prepayments are allocable to, the REMIC IA Regular Interests as such
     amounts are payable and allocable to the Corresponding Certificates.
     Principal shall be deemed payable to, and shortfalls, losses and
     prepayments are allocable to, each REMIC IA Regular Interests in the same
     time and manner as such items are allocated to the Corresponding
     Certificates.

     (ii) Principal shall be deemed payable to, and shortfalls, losses and
     prepayments are allocable to, each REMIC II Regular Interests in the same
     time and manner as such items are allocated to the Corresponding
     Certificates.

     (2)(I) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Group I Interest Remittance Amount for such Distribution Date,
and make the following distributions in the order of priority described below,
in each case to the extent of the Group I Interest Remittance Amount remaining
for such Distribution Date:

          (i) concurrently ,to the Holders of the Class A-1 Certificates and the
     Class A-IO Certificates (in respect of the Class A-IO1 Component), on a PRO
     RATA basis, based on the entitlement of each such class, the Monthly
     Interest Distributable Amount and the Unpaid Interest Shortfall Amount, if
     any, for such Certificates for such Distribution Date; and

          (ii) concurrently, to the Holders of the Class A-2 Certificates and
     the Class A-IO Certificates (in respect of the Class A-IO2 Component), on a
     PRO RATA basis based on the entitlement of each such class, an amount equal
     to the excess, if any, of (x) the amount required to be distributed
     pursuant to Section 4.01(a)(2)(II)(i) for such Distribution Date over (y)
     the amount actually distributed pursuant to such sections, from the Group
     II Interest Remittance Amount.

                                      -98-

<PAGE>

     (II) On each Distribution Date the Trustee shall withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Group II Interest Remittance Amount for such Distribution
Date, and make the following distributions in the order of priority described
below, in each case to the extent of the Group II Interest Remittance Amount
remaining for such Distribution Date:

          (i) concurrently, to the Holders of the Class A-2 Certificates and the
     Class A-IO Certificates (in respect of the Class A-IO Component), on a PRO
     RATA basis based on the entitlement of each such class, the Monthly
     Interest Distributable Amount and the Unpaid Interest Shortfall Amount, if
     any, for such Certificates for such Distribution Date; and

          (ii) concurrently, to the Holders of the Class A-1 Certificates and
     the Class A-IO Certificates (in respect of the Class A-IO1 Component), an
     amount equal to the excess, if any, of (x) the amount required to be
     distributed pursuant to Section 4.01(a)(2)(I)(i) for such Distribution Date
     over (y) the amount actually distributed pursuant to such sections from the
     Group I Interest Remittance Amount.

     (III) On each Distribution Date, following the distributions made pursuant
to Section 4.01(a)(2)(I) and Section 4.01(a)(2)(II) above, the Trustee shall
make the following distributions in the order of priority described below, in
each case to the extent of the sum of the Group I Interest Remittance Amount and
the Group II Interest Remittance Amount remaining undistributed for such
Distribution Date:

          (i) to the Holders of the Class M-1 Certificates, the Monthly Interest
     Distributable Amount allocable to such Certificates;

          (ii) to the Holders of the Class M-2 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates;

          (iii) to the Holders of the Class M-3 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates;

          (iv) to the Holders of the Class M-4 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates;

          (v) to the Holders of the Class M-5 Certificates, the Monthly Interest
     Distributable Amount allocable to such Certificates;

          (vi) to the Holders of the Class M-6 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates;

          (vii) to the Holders of the Class M-7 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates;

          (viii) to the Holders of the Class M-8 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates;

                                      -99-

<PAGE>

          (ix) to the Holders of the Class M-9 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates; and

          (x) to the Holders of the Class M-10 Certificates, the Monthly
     Interest Distributable Amount allocable to such Certificates..

     (3)(I) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, distributions in respect of principal to the
extent of the Group I Principal Distribution Amount shall be made in the
following amounts and order of priority:

          (i) first, to the Holders of the Class A-1 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero; and

          (ii) second, to the Holders of the Class A-2 Certificates, after
     taking into account the distribution of the Group II Principal Distribution
     Amount already distributed as described herein, until the Certificate
     Principal Balance of such Class has been reduced to zero.

     (II) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, distributions in respect of principal to the
extent of the Group II Principal Distribution Amount shall be made in the
following amounts and order of priority:

          (i) first, to the Holders of the Class A-2 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero; and

          (ii) second, to the Holders of the Class A-1 Certificates, after
     taking into account the distribution of the Group I Principal Distribution
     Amount already distributed as described herein, until the Certificate
     Principal Balance of such Class has been reduced to zero.

     (III) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, distributions in respect of principal to the
extent of the sum of the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount remaining undistributed for such Distribution Date
shall be made in the following amounts and order of priority:

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

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

          (iii) third, to the Holders of the Class M-3 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero;

          (iv) fourth, to the Holders of the Class M-4 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero;

                                      -100-

<PAGE>

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

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

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

          (viii) eighth, to the Holders of the Class M-8 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero;

          (ix) ninth, to the Holders of the Class M-9 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero; and

          (x) tenth, to the Holders of the Class M-10 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero

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

          (i) first, to the Holders of the Class A-1 Certificates, the Group I
     Senior Principal Distribution Amount until the Certificate Principal
     Balance thereof has been reduced to zero; and

          (ii) second, to the Holders of the Class A-2 Certificates, after
     taking into account the distribution of the Group II Principal Distribution
     Amount as described herein, up to an amount equal to the Group II Senior
     Principal Distribution Amount remaining undistributed, until the
     Certificate Principal Balance of such Class has been reduced to zero.

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

          (i) first, to the Holders of the Class A-2 Certificates, the Group II
     Senior Principal Distribution Amount until the Certificate Principal
     Balance thereof has been reduced to zero; and

          (ii) second, to the Holders of the Class A-1 Certificates, after
     taking into account the distribution of the Group I Principal Distribution
     Amount as described herein, up to an amount equal to the Group I Senior
     Principal Distribution Amount remaining undistributed, until the
     Certificate Principal Balance of such Class has been reduced to zero.

     (VI) On each Distribution Date (a) on or after the Stepdown Date and (b) on
which a Trigger Event is not in effect, distributions in respect of principal to
the extent of the sum of the

                                      -101-

<PAGE>

Group I Principal Distribution Amount and the Group II Principal Distribution
Amount remaining undistributed for such Distribution Date shall be made in the
following amounts and order of priority:

          (i) first, to the Holders of the Class M-1 Certificates, the Class M-1
     Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero;

          (ii) second, to the Holders of the Class M-2 Certificates, the Class
     M-2 Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero;

          (iii) third, to the Holders of the Class M-3 Certificates, the Class
     M-3 Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero;

          (iv) fourth, to the Holders of the Class M-4 Certificates, the Class
     M-4 Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero;

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

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

          (vii) seventh, to the Holders of the Class M-7 Certificates, the Class
     M-7 Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero;

          (viii) eighth, to the Holders of the Class M-8 Certificates, the Class
     M-8 Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero;

          (ix) ninth, to the Holders of the Class M-9 Certificates, the Class
     M-9 Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero; and

          (x) tenth, to the Holders of the Class M-10 Certificates, the Class
     M-10 Principal Distribution Amount until the Certificate Principal Balance
     thereof has been reduced to zero

     (4) On each Distribution Date, the Net Monthly Excess Cashflow shall be
distributed as follows:

          (i) to the Holders of the Class or Classes of Certificates then
     entitled to receive distributions in respect of principal, in an amount
     equal to any Extra Principal Distribution Amount, distributable to such
     Holders as part of the Group I Principal Distribution Amount and/or the
     Group II Principal Distribution Amount as described under Section
     4.01(a)(3) above;

                                      -102-

<PAGE>

          (ii) to the Holders of the Class M-1 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

          (iii) to the Holders of the Class M-1 Certificates, in an amount equal
     to the Allocated Realized Loss Amount allocable to such Certificates;

          (iv) to the Holders of the Class M-2 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

          (v) to the Holders of the Class M-2 Certificates, in an amount equal
     to the Allocated Realized Loss Amount allocable to such Certificates;

          (vi) to the Holders of the Class M-3 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

          (vii) to the Holders of the Class M-3 Certificates, in an amount equal
     to the Allocated Realized Loss Amount allocable to such Certificates;

          (viii) to the Holders of the Class M-4 Certificates, in an amount
     equal to the Unpaid Interest Shortfall Amount allocable to such
     Certificates;

          (ix) to the Holders of the Class M-4 Certificates, in an amount equal
     to the Allocated Realized Loss Amount allocable to such Certificates;

          (x) to the Holders of the Class M-5 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

          (xi) to the Holders of the Class M-5 Certificates, in an amount equal
     to the Allocated Realized Loss Amount allocable to such Certificates;

          (xii) to the Holders of the Class M-6 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

          (xiii) to the Holders of the Class M-6 Certificates, in an amount
     equal to the Allocated Realized Loss Amount allocable to such Certificates;

          (xiv) to the Holders of the Class M-7 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

          (xv) to the Holders of the Class M-7 Certificates, in an amount equal
     to the Allocated Realized Loss Amount allocable to such Certificates;

          (xvi) to the Holders of the Class M-8 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

                                      -103-

<PAGE>

          (xvii) to the Holders of the Class M-8 Certificates, in an amount
     equal to the Allocated Realized Loss Amount allocable to such Certificates;

          (xviii) to the Holders of the Class M-9 Certificates, in an amount
     equal to the Unpaid Interest Shortfall Amount allocable to such
     Certificates;

          (xix) to the Holders of the Class M-9 Certificates, in an amount equal
     to the Allocated Realized Loss Amount allocable to such Certificates;

          (xx) to the Holders of the Class M-10 Certificates, in an amount equal
     to the Unpaid Interest Shortfall Amount allocable to such Certificates;

          (xxi) to the Holders of the Class M-10 Certificates, in an amount
     equal to the Allocated Realized Loss Amount allocable to such Certificates;

          (xxii) to the Net WAC Rate Carryover Reserve Account, the amount by
     which any Net WAC Rate Carryover Amounts for such Distribution Date exceed
     the amounts received by the Trustee under the Cap Contracts;

          (xxiii) to the Holders of the Class CE Certificates, (a) the Monthly
     Interest Distributable Amount and any Overcollateralization Release Amount
     for such Distribution Date and (b) on any Distribution Date on which the
     aggregate Certificate Principal Balance of the Class A Certificates and the
     Mezzanine Certificates has been reduced to zero, any remaining amounts in
     reduction of the Certificate Principal Balance of the Class CE
     Certificates, until the Certificate Principal Balance thereof has been
     reduced to zero;

          (xxiv) if such Distribution Date follows the Prepayment Period during
     which occurs the latest date on which a Prepayment Charge may be required
     to be paid in respect of any Mortgage Loans, to the Holders of the Class P
     Certificates, in reduction of the Certificate Principal Balance thereof,
     until the Certificate Principal Balance thereof is reduced to zero; and

          (xxv) any remaining amounts to the Holders of the Residual
     Certificates (in respect of the appropriate Class R Interest).

     Without limiting the provisions of Section 9.01(b), by acceptance of the
Residual Certificates the Holders of the Residual Certificates agree, and it is
the understanding of the parties hereto, that for so long as any of the notes
issued pursuant to the Indenture are outstanding or any amounts are reimbursable
or payable to the NIMS Insurer in accordance with the terms of the Indenture, to
pledge their rights to receive any amounts otherwise distributable to the
Holders of the Class R Certificates (and such rights are hereby assigned and
transferred) to the Holders of the Class CE Certificates.

     On each Distribution Date, after making the distributions of the Available
Funds as set forth above, the Trustee will FIRST, withdraw from the Net WAC Rate
Carryover Reserve Account all income from the investment of funds in the Net WAC
Rate Carryover Reserve Account and

                                      -104-

<PAGE>

distribute such amount to the Holders of the Class CE Certificates, and SECOND,
withdraw from the Net WAC Rate Carryover Reserve Account, to the extent of
amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover
Amount for such Distribution Date and distribute such amount in the following
order of priority:

          (A) to the Class A-1 Certificates, the Net WAC Rate Carryover Amount
     for such Class, but only to the extent of amounts paid under the Class A-1
     Cap Contract;

          (B) to the Class A-2 Certificates, the Net WAC Rate Carryover Amount
     for such Class, but only to the extent of amounts paid under the Class A-2
     Cap Contract;

          (C) concurrently, to the Mezzanine Certificates, on a PRO RATA basis
     based on the Net WAC Rate Carryover Amount for each such Class, the Net WAC
     Rate Carryover Amount for each such Class, but only to the extent of
     amounts paid under the Mezzanine Cap Contract;

          (E) to the Class A Certificates and the Mezzanine Certificates, any
     related unpaid Net WAC Rate Carryover Amount (after taking into account
     distributions pursuant to (A), (B), (C) and (D) above), distributed in the
     following order of priority:

               (i) to the Class A Certificates, on a PRO RATA basis based on the
          remaining Net WAC Rate Carryover Amount for each such Class;

               (ii) to the Class M-1 Certificates;

               (iii) to the Class M-2 Certificates;

               (iv) to the Class M-3 Certificates;

               (v) to the Class M-4 Certificates;

               (vi) to the Class M-5 Certificates;

               (vii) to the Class M-6 Certificates;

               (viii) to the Class M-7 Certificates;

               (vi) to the Class M-8 Certificates;

               (vii) to the Class M-9 Certificates;

               (viii) to the Class M-10 Certificates.

     On each Distribution Date, the Trustee shall withdraw any amounts then on
deposit in the Distribution Account that represent (i) Prepayment Charges
collected by the Servicer in connection with the Principal Prepayment of any of
the Mortgage Loans or (ii) any Servicer

                                      -105-

<PAGE>

Prepayment Charge Payment Amount, and shall distribute such amounts to the
Holders of the Class P Certificates. Such distributions shall not be applied to
reduce the Certificate Principal Balance of the Class P Certificates.

     Following the foregoing distributions, an amount equal to the amount of
Subsequent Recoveries remitted to the Servicer shall be applied to increase the
Certificate Principal Balance of the Class of Certificates with the Highest
Priority up to the extent of such Realized Losses previously allocated to that
Class of Certificates pursuant to Section 4.04. An amount equal to the amount of
any remaining Subsequent Recoveries shall be applied to increase the Certificate
Principal Balance of the Class of Certificates with the next Highest Priority,
up to the amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.04. Holders of such Certificates will not be
entitled to any distribution in respect of interest on the amount of such
increases for any Accrual Period preceding the Distribution Date on which such
increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Certificate of such Class in accordance with its
respective Percentage Interest.

     (c) All distributions made with respect to each Class of Certificates on
each Distribution Date shall be allocated PRO RATA among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Distributions in respect of each Class of Certificates on each Distribution Date
will be made to the Holders of the respective Class of record on the related
Record Date (except as otherwise provided in Section 4.01(e) or Section 9.01
respecting the final distribution on such Class), based on the aggregate
Percentage Interest represented by their respective Certificates, and shall be
made by wire transfer of immediately available funds to the account of any such
Holder at a bank or other entity having appropriate facilities therefor, if such
Holder shall have so notified the Trustee in writing at least five Business Days
prior to the Record Date immediately prior to such Distribution Date and is the
registered owner of Certificates having an initial aggregate Certificate
Principal Balance or Notional Amount that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the initial Certificate Principal Balance or
Notional Amount of such Class of Certificates, or otherwise by check mailed by
first class mail to the address of such Holder appearing in the Certificate
Register. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee or such other location specified in the
notice to Certificateholders of such final distribution.

     Each distribution with respect to a Book-Entry Certificate shall be paid to
the Depository, as Holder thereof, and the Depository shall be responsible for
crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Depositor
or the Servicer shall have any responsibility therefor except as otherwise
provided by this Agreement or applicable law.

     (d) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in

                                      -106-

<PAGE>

this Agreement. None of the Holders of any Class of Certificates, the Trustee or
the Servicer shall in any way be responsible or liable to the Holders of any
other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.

     (e) Except as otherwise provided in Section 9.01, whenever the Trustee
expects that the final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Trustee shall, no later than
three (3) days before the related Distribution Date, mail to each Holder on such
date of such Class of Certificates a notice to the effect that:

          (i) the Trustee expects that the final distribution with respect to
     such Class of Certificates will be made on such Distribution Date but only
     upon presentation and surrender of such Certificates at the office of the
     Trustee therein specified, and

          (ii) no interest shall accrue on such Certificates from and after the
     end of the related Accrual Period.

     Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or Holders
to tender their Certificates shall, on such date, be set aside and held in trust
by the Trustee and credited to the account of the appropriate non-tendering
Holder or Holders. If any Certificates as to which notice has been given
pursuant to this Section 4.01(e) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to the remaining non-tendering Certificateholders concerning surrender of
their Certificates but shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the Trust Fund. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to UBS Securities LLC all such amounts, and
all rights of non-tendering Certificateholders in or to such amounts shall
thereupon cease. No interest shall accrue or be payable to any Certificateholder
on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e). Any such amounts held in trust
by the Trustee shall be held in an Eligible Account and the Trustee may direct
any depository institution maintaining such account to invest the funds in one
or more Permitted Investments. All income and gain realized from the investment
of funds deposited in such accounts held in trust by the Trustee shall be for
the benefit of the Trustee; provided, however, that the Trustee shall deposit in
such account the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon the
realization of such loss.

     (f) Notwithstanding anything to the contrary herein, (i) in no event shall
the Certificate Principal Balance of a Class A Certificate or a Mezzanine
Certificate be reduced more than once in respect of any particular amount both
(a) allocated to such Certificate in respect of Realized Losses pursuant to
Section 4.04 and (b) distributed to the Holder of such Certificate in

                                      -107-

<PAGE>

reduction of the Certificate Principal Balance thereof pursuant to this Section
4.01 from Net Monthly Excess Cashflow and (ii) in no event shall the
Uncertificated Balance of a REMIC I Regular Interest be reduced more than once
in respect of any particular amount both (a) allocated to such REMIC I Regular
Interest in respect of Realized Losses pursuant to Section 4.04 and (b)
distributed on such REMIC I Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 4.01.

     SECTION 4.02. Statements to Certificateholders.

     On each Distribution Date, the Trustee shall prepare and make available on
its website at www.usbank.com/abs for access by each Holder of the Regular
Certificates, the other parties hereto, and the NIMS Insurer, Rating Agencies, a
statement as to the distributions made on such Distribution Date containing the
following information:

          (i) the amount of the distribution made on such Distribution Date to
     the Holders of the Certificates of each Class allocable to principal, and
     the amount of the distribution made on such Distribution Date to the
     Holders of the Class P Certificates allocable to Prepayment Charges and
     Servicer Prepayment Charge Payment Amounts;

          (ii) the amount of the distribution made on such Distribution Date to
     the Holders of the Certificates of each Class allocable to interest;

          (iii) the aggregate Servicing Fee (and any other compensation payable
     to the Servicer) and the Trustee Fee during the related Due Period and such
     other customary information as the Trustee deems necessary or desirable, or
     which a Certificateholder reasonably requests, to enable Certificateholders
     to prepare their tax returns;

          (iv) the aggregate amount of Advances for such Distribution Date;

          (v) the aggregate Stated Principal Balance of the Mortgage Loans and
     any REO Properties as of the close of business on such Distribution Date;

          (vi) the number, aggregate Principal Balance, weighted average
     remaining term to maturity and weighted average Mortgage Rate of the
     Mortgage Loans as of the related Due Date;

          (vii) the number and aggregate unpaid principal balance of Mortgage
     Loans (a) delinquent 30 to 59 days, (b) delinquent 60 to 89 days, (c)
     delinquent 90 or more days, in each case, as of the last day of the
     preceding calendar month, (d) as to which foreclosure proceedings have been
     commenced and (e) with respect to which the related Mortgagor has filed for
     protection under applicable bankruptcy laws, with respect to whom
     bankruptcy proceedings are pending or with respect to whom bankruptcy
     protection is in force;

          (viii) the total number and cumulative principal balance of all REO
     Properties as of the close of business on the last day of the preceding
     Prepayment Period;

                                      -108-

<PAGE>

          (ix) [reserved];

          (x) the aggregate amount of Principal Prepayments made during the
     related Prepayment Period;

          (xi) the aggregate amount of Realized Losses incurred during the
     related Prepayment Period, the aggregate amount of Realized Losses incurred
     since the Closing Date and the aggregate amount of Subsequent Recoveries
     received during the related Prepayment Period and the cumulative amount of
     Subsequent Recoveries received since the Closing Date;

          (xii) the aggregate amount of Extraordinary Trust Fund Expenses
     withdrawn from the Collection Account or the Distribution Account for such
     Distribution Date;

          (xiii) the aggregate Certificate Principal Balance and Notional
     Amount, as applicable, of each Class of Certificates, after giving effect
     to the distributions, and allocations of Realized Losses, made on such
     Distribution Date, separately identifying any reduction thereof due to
     allocations of Realized Losses;

          (xiv) the Certificate Factor for each such Class of Certificates
     applicable to such Distribution Date;

          (xv) the Monthly Interest Distributable Amount in respect of the Class
     A Certificates, the Mezzanine Certificates and the Class CE Certificates
     for such Distribution Date and the Unpaid Interest Shortfall Amount, if
     any, with respect to the Class A Certificates and the Mezzanine
     Certificates on such Distribution Date, separately identifying any
     reduction thereof due to allocations of Realized Losses, Prepayment
     Interest Shortfalls and Relief Act Interest Shortfalls;

          (xvi) the aggregate amount of any Prepayment Interest Shortfall for
     such Distribution Date, to the extent not covered by payments by the
     Servicer pursuant to Section 3.24;

          (xvii) the aggregate amount of Relief Act Interest Shortfalls for such
     Distribution Date;

          (xviii) the Overcollateralization Target Amount, Overcollateralized
     Amount and Overcollateralization Deficiency Amount and the Credit
     Enhancement Percentage for such Distribution Date;

          (xix) the respective Pass-Through Rates applicable to the Class A
     Certificates, the Mezzanine Certificates and the Class CE Certificates for
     such Distribution Date and the Pass-Through Rate applicable to the Class A
     Certificates and the Mezzanine Certificates for the immediately succeeding
     Distribution Date;

          (xx) the Aggregate Loss Severity Percentage;

                                      -109-

<PAGE>

          (xxi) when the Stepdown Date or Trigger Event has occurred;

          (xxii) the Available Funds;

          (xxiii) the Net WAC Rate Carryover Amount for the Class A Certificates
     and the Mezzanine Certificates, if any, for such Distribution Date, the
     amount remaining unpaid after reimbursements therefor on such Distribution
     Date; and

          (xxiv) payments, if any, made under the Cap Contracts.

     In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class.

     Within a reasonable period of time after the end of each calendar year, the
Trustee shall, upon written request, forward to each Person who at any time
during the calendar year was a Holder of a Regular Certificate and the NIMS
Insurer a statement containing the information set forth in subclauses (i)
through (iii) above, 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 from time to time are in force.

     On each Distribution Date, the Trustee shall make available on its website
at www.usbank.com/abs for access by the Depositor, the NIMS Insurer, each Holder
of a Residual Certificate and the Servicer, the reports available to the Regular
Certificateholders on such Distribution Date and a statement setting forth the
amounts, if any, actually distributed with respect to the Residual Certificates,
respectively, on such Distribution Date.

     Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each Person who at any time during the calendar year
was a Holder of a Residual Certificate and the NIMS Insurer a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.

     The Trustee shall, upon request, furnish to each Certificateholder and the
NIMS Insurer, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trustee's duties are limited to the extent
that the Trustee receives timely reports as required from the Servicer.

     On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.

                                      -110-

<PAGE>

     SECTION 4.03. Remittance Reports; Advances.

     (a) Not later than the eighteenth day of each calendar month, or if such
eighteenth day is not a Business Day, the following Business Day, the Servicer
shall deliver to the Trustee and the NIMS Insurer by telecopy or electronic mail
(or by such other means as the Servicer and the Trustee may agree from time to
time) a Remittance Report with respect to the related Distribution Date. Not
later than the eighteenth day of each calendar month, or if such eighteenth day
is not a Business Day, the following Business Day, the Servicer shall deliver or
cause to be delivered to the Trustee in addition to the information provided on
the Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably require to perform
the calculations necessary to make the distributions contemplated by Section
4.01 and to prepare the statements to Certificateholders contemplated by Section
4.03. The Trustee shall not be responsible to recompute, recalculate or verify
any information provided to it by the Servicer.

     (b) The amount of Advances to be made by the Servicer for any Distribution
Date shall equal, subject to Section 4.03(d), the sum of (i) the aggregate
amount of Monthly Payments (net of the related Servicing Fee), due during the
related Due Period in respect of the Mortgage Loans, which Monthly Payments were
delinquent on a contractual basis as of the close of business on the related
Determination Date; and (ii) with respect to each REO Property, which REO
Property was acquired during or prior to the related Due Period and as to which
REO Property an REO Disposition did not occur during the related Due Period, an
amount equal to the excess, if any, of the REO Imputed Interest on such REO
Property for the most recently ended calendar month, over the net income from
such REO Property transferred to the Distribution Account pursuant to Section
3.23 for distribution on such Distribution Date.

     On or before 1:00 p.m. New York time on the Servicer Remittance Date, the
Servicer shall remit in immediately available funds to the Trustee for deposit
in the Distribution Account an amount equal to the aggregate amount of Advances,
if any, to be made in respect of the Mortgage Loans and REO Properties for the
related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case it will cause to be made an appropriate entry in the records of
Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.03, used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans and REO Properties. Any amounts held for future distribution used by the
Servicer to make an Advance as permitted in the preceding sentence shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 on such Distribution Date
if such amounts held for future distributions had not been so used to make
Advances. The Trustee will provide notice to the Servicer and the NIMS Insurer
by telecopy by the close of business on any Servicer Remittance Date in the
event that the amount remitted by the Servicer to the Trustee on such date is
less than the Advances required to be made by the Servicer for the related
Distribution Date, as set forth in the related Remittance Report.

                                      -111-

<PAGE>

     (c) The obligation of the Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below;
and, with respect to any Mortgage Loan, shall continue until the Mortgage Loan
is paid in full or until all Liquidation Proceeds thereon have been recovered,
or a Final Recovery Determination has been made thereon.

     (d) Notwithstanding anything herein to the contrary, 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 Nonrecoverable Advance
or Nonrecoverable Servicing Advance, respectively. The determination by the
Servicer that it has made a Nonrecoverable Advance or a Nonrecoverable Servicing
Advance or that any proposed Advance or Servicing Advance, if made, would
constitute a Nonrecoverable Advance or Nonrecoverable Servicing Advance,
respectively, shall be evidenced by an Officers' Certificate of the Servicer
delivered to the Depositor, the NIMS Insurer and the Trustee. Furthermore, the
Servicer shall not be required to advance Relief Act Interest Shortfalls.

     SECTION 4.04. Allocation of Realized Losses.

     (a) Not later than the eighteenth day of the calendar month, or if such
eighteenth day is not a Business Day, the following Business Day in which such
Distribution Date occurs, the Servicer shall determine as to each Mortgage Loan
and REO Property: (i) the total amount of Realized Losses, if any, incurred in
connection with any Final Recovery Determinations made during the related
Prepayment Period; and (ii) the respective portions of such Realized Losses
allocable to interest and allocable to principal. Not later than the eighteenth
day of the calendar month in which such Distribution Date occurs, the Servicer
shall also determine as to each Mortgage Loan: (i) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period; and (ii) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the
preceding sentence that is to be supplied by the Servicer shall be evidenced by
an Officer's Certificate delivered to the Trustee by the Servicer not later than
the eighteenth day of the calendar month, or if such eighteenth day is not a
Business Day, the following Business Day in which such Distribution Date occurs,
immediately following the end of the Prepayment Period during which any such
Realized Loss was incurred.

     (b) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class CE Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-10 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-9 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class M-8 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero sixth, to the
Class M-7 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; seventh, to the Class M-6 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; eightth, to the Class M-5
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; ninth, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; tenth, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
eleventh, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and twelfth, to

                                      -112-

<PAGE>

the Class M-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.

     Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
CE Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(a)(4)(xviii). No allocations of any Realized
Losses shall be made to the Certificate Principal Balances of the Class A
Certificates or the Class P Certificates.

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

     (c)(i) The REMIC I Marker Percentage of all Realized Losses on the Mortgage
Loans shall be allocated by the Trustee on each Distribution Date to the
following REMIC I Regular Interests in the specified percentages, as follows:
first, to Uncertificated Interest payable to the REMIC I Regular Interest I-LTAA
and REMIC I Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC
I Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Balances of the REMIC I Regular Interest I-LTAA and REMIC I
Regular Interest I- LTZZ up to an aggregate amount equal to the REMIC I
Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM10 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM10 has been reduced to zero; fourth, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM9 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM9 has been reduced to zero; fifth, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM8 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM8 has been reduced to zero; sixth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM7 and REMIC I Regular
Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM7 has been reduced to zero; seventh, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM6 has been reduced to zero; eighth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTZZ,

                                      -113-

<PAGE>

98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I- LTM5 has been reduced to zero; ninth, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM4 and
REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM4 has been reduced to
zero; tenth, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest I-LTZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM3 has been reduced to zero; eleventh to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM2 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM2 has been reduced to zero; and
twelfth, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I- LTM1 and REMIC I Regular Interest II-LTZZ, 98%, 1%
and 1%, respectively, until the Uncertificated Balance of REMIC I Regular
Interest I-LTM1 has been reduced to zero.

     (ii) The REMIC I Sub WAC Allocation Percentage of all Realized Losses shall
be applied after all distributions have been made on each Distribution Date
first, so as to keep the Uncertificated Balance of each REMIC I Regular Interest
ending with the designation "GRP" equal to 0.01% of the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group; second, to
each REMIC I Regular Interest ending with the designation "SUB," so that the
Uncertificated Balance of each such REMIC I Regular Interest is equal to 0.01%
of the excess of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group over (y) the Certificate Principal Balance of
the Class A Certificate in the related Loan Group (except that if any such
excess is a larger number than in the preceding distribution period, the least
amount of Realized Losses shall be applied to such REMIC I Regular Interests
such that the REMIC I Subordinated Balance Ratio is maintained); and third, any
remaining Realized Losses shall be allocated to REMIC I Regular Interest I-LTXX.

     (iii) Realized losses are allocable to, each REMIC II Regular Interests in
the same time and manner as Realized Losses are allocated to the Corresponding
Certificates.

     SECTION 4.05. Compliance with Withholding Requirements

     Notwithstanding any other provision of this Agreement, the Trustee shall
comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.

     SECTION 4.06. Exchange Commission; Additional Information.

     (a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with satisfying the reporting requirements of the Trust
Fund under the Exchange Act. The Trustee shall prepare and sign on behalf of the
Trust Fund any Forms 8-K customary for similar securities as required by the
Exchange Act and the Rules and Regulations of the Commission

                                      -114-

<PAGE>

thereunder, and the Trustee shall file (via the Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Trust Fund. The
Trustee shall prepare and sign any Form 10-K which includes as exhibits (i) the
Certification (as defined in (b) below), (ii) the Servicer's annual statement of
compliance described under Section 3.20 and (iii) the accountant's report
described under Section 3.21 and the Trustee shall file (via the Commission's
Electronic Data Gathering and Retrieval System) such forms on behalf of the
Trust Fund. To the extent that the Commission requires any additional
information to be filed pursuant to a Form 10-K, the Trustee, shall prepare,
sign and promptly file an amended Form 10-K containing such additional
information. To the extent that the Servicer acquires actual knowledge of
material information (as determined by the Servicer in good faith) concerning
the Trust Fund, it shall notify the Trustee of such information.

     (b) Each Form 8-K shall be filed by the Trustee within 15 days after each
Distribution Date with a copy of the Monthly Statement for such Distribution
Date as an exhibit thereto. Prior to March 31st of each year (or such earlier
date as may be required by the Exchange Act and the Rules and Regulations of the
Commission), the Trustee shall file a Form 10-K, in substance as required by
applicable law or applicable Commission staff's interpretations. Such Form 10-K
shall include as exhibits the Servicer's annual statement of compliance
described under Section 3.20 and the accountant's report described under Section
3.21, in each case to the extent they have been timely delivered to the Trustee.
If they are not so timely delivered, the Trustee shall file an amended Form 10-K
including such documents as exhibits reasonably promptly after they are
delivered to the Trustee. The Trustee shall have no liability with respect to
any failure to properly prepare or file such periodic reports resulting from or
relating to (a) the Trustee's inability or failure to obtain any information not
resulting from its own negligence or willful misconduct or (b) any inaccuracy in
such periodic reports resulting from incorrect information provided to the
Trustee by the Servicer in a Remittance Report or otherwise. The Form 10-K shall
also include a certification in the form attached hereto as Exhibit J-1 (the
"Certification"), which shall be signed by the Trustee.

     (c) In addition, the Servicer shall sign a certification (in the form
attached hereto as Exhibit J-2) for the benefit of the Trustee and its officers,
directors and Affiliates regarding certain aspects of the Certification
(provided, however, that the Servicer shall not undertake an analysis of the
accountant's report attached as an exhibit to the Form 10-K). The Servicer's
certification shall be delivered to the Trustee by no later than March 15th of
each year (or if such day is not a Business Day, the immediately preceding
Business Day).

     In addition, (i) the Trustee shall, subject to the provisions of Sections
8.01 and 8.02, indemnify and hold harmless the Depositor and the Servicer and
their respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the Trustee's obligations under Section 4.06(b) or the
Trustee's negligence, bad faith or willful misconduct in connection therewith,
and (ii) the Servicer shall indemnify and hold harmless the Depositor, the
Trustee and their respective officers, directors and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon a breach of the Servicer's obligations under this Section
4.06(b) or the Servicer's negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Depositor or the Servicer, then (i) the
Trustee agrees that it shall

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contribute to the amount paid or payable by the Depositor or the Servicer, as
applicable, as a result of the losses, claims, damages or liabilities of the
Depositor or the Servicer, as applicable, in such proportion as is appropriate
to reflect the relative fault of the or the Depositor or the Servicer, as
applicable, on the one hand and the Trustee on the other in connection with a
breach of the Trustee's obligations under this Section 4.06(b) or the Trustee's
negligence, bad faith or willful misconduct in connection therewith and (ii) the
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor or the Trustee, as applicable, as a result of the losses, claims,
damages or liabilities of the Depositor or the Trustee, as applicable, in such
proportion as is appropriate to reflect the relative fault of the Depositor or
the Trustee, as applicable, on the one hand and the Servicer on the other in
connection with a breach of the Servicer's obligations under this Section
4.06(b) or the Servicer's negligence, bad faith or willful misconduct in
connection therewith. Notwithstanding any other provision in this Agreement to
the contrary, the Servicer shall not have any responsibility or liability to any
party relating to the certification or information prepared, certified or
distributed by the Trustee or any other party other than the Servicer unless
such information was derived from erroneous or incomplete information required
to be provided by the Servicer under this Agreement.

     (d) Upon any filing with the Commission pursuant to this Section 4.06(b),
the Trustee shall promptly deliver to the Depositor a copy of any executed
report, statement or information.

     (e) Prior to January 30 of the first year in which the Trustee is able to
do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust Fund.

     SECTION 4.07. Net WAC Rate Carryover Reserve Account.

     No later than the Closing Date, the Trustee shall establish and maintain
with itself a separate, segregated trust account titled, "U.S. Bank National
Association as Trustee, in trust for the registered holders of MASTR Asset
Backed Securities Trust 2004-FRE1, Mortgage Pass-Through Certificates, Series
2004-FRE1--Net WAC Rate Carryover Reserve Account." Amounts deposited in the Net
WAC Rate Carryover Reserve Account will consist of any payments received by the
Trustee under the Cap Contracts and deposited into the Net WAC Rate Carryover
Reserve Account.

     On each Distribution Date as to which there is a Net WAC Rate Carryover
Amount payable to the Class A Certificates and/or the Mezzanine Certificates,
the Trustee has been directed by the Class CE Certificateholders to, and
therefore will, deposit into the Net WAC Rate Carryover Reserve Account the
amounts described in Section 4.01(a)(4)(xvii), rather than distributing such
amounts to the Class CE Certificateholders. On each such Distribution Date, the
Trustee shall hold all such amounts for the benefit of the Holders of the Class
A Certificates and the Mezzanine Certificates, and will distribute such amounts
to the Holders of the Class A Certificates and/or the Mezzanine Certificates in
the amounts and priorities set forth in Section 4.01(d).

     For federal and state income tax purposes, the Class CE Certificateholders
will be deemed to be the owners of the Net WAC Rate Carryover Reserve Account
and all amounts deposited into the Net WAC Rate Carryover Reserve Account shall
be treated as amounts distributed by REMIC III to the Holders of the Class CE
Interest and by REMIC IV to the Holders of the Class

                                      -116-

<PAGE>

CE Certificates. Upon the termination of the Trust Fund, or the payment in full
of the Class A Certificates and the Mezzanine Certificates, all amounts
remaining on deposit in the Net WAC Rate Carryover Reserve Account will be
released by the Trust Fund and distributed to the Class CE Certificateholders or
their designees. The Net WAC Rate Carryover Reserve Account will be part of the
Trust Fund but not part of any REMIC and any payments to the Holders of the
Class A Certificates or the Mezzanine Certificates of Net WAC Rate Carryover
Amounts will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860(G)(a)(1).

     By accepting a Class CE Certificate, each Class CE Certificateholder hereby
agrees to direct the Trustee, and the Trustee hereby is directed, to deposit
into the Net WAC Rate Carryover Reserve Account the amounts described above on
each Distribution Date as to which there is any Net WAC Rate Carryover Amount
rather than distributing such amounts to the Class CE Certificateholders. By
accepting a Class CE Certificate, each Class CE Certificateholder further agrees
that such direction is given for good and valuable consideration, the receipt
and sufficiency of which is acknowledged by such acceptance.

     At the direction of the Holders of a majority in Percentage Interest in the
Class CE Certificates, the Trustee shall direct any depository institution
maintaining the Net WAC Rate Carryover Reserve Account to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class CE Certificates with respect to the Net WAC
Rate Carryover Reserve Account is received by the Trustee, the Trustee shall
invest the funds in such account in Permitted Investments managed by the Trustee
or an Affiliate of the kind described in clause (vi) of the definition of
Permitted Investments. All income and gain earned upon such investment shall be
deposited into the Net WAC Rate Carryover Reserve Account.

     For federal tax return and information reporting, the value of the right of
the Class A-1 Certificateholders, the Class A-2 Certificateholders and the
Mezzanine Certificateholders to receive payments from the Net WAC Rate Carryover
Reserve Account in respect of any Net WAC Rate Carryover Amount shall be $
210,677.22, $ 93,052.45 and $ 76,270.33, respectively.

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                                    ARTICLE V

                                THE CERTIFICATES

     SECTION 5.01. The Certificates.

     (a) The Certificates in the aggregate will represent the entire beneficial
ownership interest in the Mortgage Loans and all other assets included in REMIC
I.

     The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-15. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.

     Upon original issue, the Certificates shall be executed by the Trustee and
authenticated and delivered by the Trustee to or upon the order of the
Depositor. The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized signatory. Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Trustee shall bind the Trustee notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. 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 provided
herein executed by the Trustee by manual signature, and such certificate of
authentication 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.

     (b) The Class A Certificates and the Mezzanine Certificates shall initially
be issued as one or more Certificates held by the Book-Entry Custodian or, if
appointed to hold such Certificates as provided below, the Depository and
registered in the name of the Depository or its nominee and, except as provided
below, registration of such Certificates may not be transferred by the Trustee
except to another Depository that agrees to hold such Certificates for the
respective Certificate Owners with Ownership Interests therein. The Certificate
Owners shall hold their respective Ownership Interests in and to such
Certificates through the book-entry facilities of the Depository and, except as
provided below, shall not be entitled to definitive, fully registered
Certificates ("Definitive Certificates") in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book- Entry Custodian shall, appoint, by a written
instrument delivered to the Depositor, the Servicer and the Trustee, any other
transfer agent (including the Depository or any successor Depository) to act

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<PAGE>

as Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of its
duties or responsibilities by reason of any such appointment of other than the
Depository. If the Trustee resigns or is removed in accordance with the terms
hereof, the successor trustee or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.

     The Trustee, the Servicer and the Depositor may for all purposes (including
the making of payments due on the Book-Entry Certificates) deal with the
Depository as the authorized representative of the Certificate Owners with
respect to the Book-Entry Certificates for the purposes of exercising the rights
of Certificateholders hereunder. The rights of Certificate Owners with respect
to the Book-Entry Certificates shall be limited to those established by law and
agreements between such Certificate Owners and the Depository Participants and
brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of the Book-Entry
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Certificateholders and shall give notice to the
Depository of such record date.

     If (i)(A) the Depositor advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository, and (B) the Depositor is unable to locate a qualified successor or
(ii) after the occurrence of a Servicer Event of Default, Certificate Owners
representing in the aggregate not less than 51% of the Ownership Interests of
the Book-Entry Certificates advise the Trustee through the Depository, in
writing, that the continuation of a book-entry system through the Depository is
no longer in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Book-Entry Custodian or the Depository, as applicable,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall cause the Definitive Certificates to be issued. Such
Definitive Certificates will be issued in minimum denominations of $25,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $25,000 immediately prior to the issuance of
a Definitive Certificate shall be issued in a minimum denomination equal to the
amount represented by such Book-Entry Certificate. None of the Depositor, the
Servicer or the Trustee shall be liable for any delay in the delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of 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 the Definitive Certificates as Certificateholders hereunder.

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<PAGE>

     SECTION 5.02. Registration of Transfer and Exchange of Certificates.

     (a) The Trustee shall cause to be kept at one of the offices or agencies to
be appointed by the Trustee in accordance with the provisions of Section 8.11, a
Certificate Register for the Certificates in which, subject 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.

     (b) No transfer of any Class A-IO Certificate, Class CE Certificate, Class
P Certificate or Residual Certificate (the "Private Certificates") shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of a Class A-IO Certificate, Class CE
Certificate, Class P Certificate or Residual Certificate is to be made without
registration or qualification (other than in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor), the Trustee shall require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the forms
attached hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration or qualification (which Opinion of Counsel shall not be an expense
of the Trust Fund or of the Depositor, the Trustee, the Servicer in its capacity
as such or any Sub-Servicer), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. None of the Depositor, the Servicer or the Trustee is
obligated to register or qualify any such Certificates under the 1933 Act or any
other securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of any such
Certificate shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

     (c) No transfer of a Private Certificate or any interest therein shall be
made to any Plan subject to ERISA or Section 4975 of the Code, any Person
acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "Plan Assets" of a Plan within the meaning of
the Department of Labor regulation promulgated at 29 C. F. R. ss. 2510.3-101
("Plan Assets"), as certified by such transferee in the form of Exhibit G,
unless the Trustee is provided with an Opinion of Counsel for the benefit of the
Trustee, the Depositor and the Servicer and on which they may rely which
establishes to the satisfaction of the Depositor, the Trustee and the Servicer
that the purchase of such Certificates is permissible under applicable law, will
not constitute or result in any prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Depositor, the Servicer, the NIMS
Insurer, the Trustee or the Trust Fund to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Depositor, the Servicer, the Trustee or the Trust Fund. Neither
an Opinion of Counsel nor any certification will be required in connection with
the initial transfer of any such Certificate by the Depositor to an

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<PAGE>

affiliate of the Depositor (in which case, the Depositor or any affiliate
thereof shall have deemed to have represented that such affiliate is not a Plan
or a Person investing Plan Assets) and the Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee,
shall be a written representation) from the Depositor of the status of such
transferee as an affiliate of the Depositor.

     Each beneficial owner of a Mezzanine Certificates or any interest therein
shall be deemed to have represented, by virtue of its acquisition or holding of
that certificate or interest therein, that either (i) it is not a Plan investor,
(ii) it has acquired and is holding such Mezzanine Certificates in reliance on
the Underwriters' Exemption, and that it understands that there are certain
conditions to the availability of the Underwriters' Exemption, including that
the Mezzanine Certificates must be rated, at the time of purchase, not lower
than "BBB-" (or its equivalent) by Fitch, Moody's or S&P or (iii) (1) it is an
insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in PTCE 95-60, and (3) the conditions in Sections I and III
of PTCE 95-60 have been satisfied.

     If any Mezzanine Certificate or Private Certificate or any interest therein
is acquired or held in violation of the provisions of the preceding two
paragraphs, the next preceding permitted beneficial owner will be treated as the
beneficial owner of that Certificate retroactive to the date of transfer to the
purported beneficial owner. Any purported beneficial owner whose acquisition or
holding of any such Certificate or interest therein was effected in violation of
the provisions of the preceding two paragraphs shall indemnify and hold harmless
the Depositor, the Servicer, the NIMS Insurer, the Trustee and the Trust Fund
from and against any and all liabilities, claims, costs or expenses incurred by
those parties as a result of that acquisition or holding.

     (d)(i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of Transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Residual Certificate are expressly subject to the following provisions:

          (A) Each Person holding or acquiring any Ownership Interest in a
     Residual 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.

          (B) In connection with any proposed Transfer of any Ownership Interest
     in a Residual Certificate, the Trustee shall require delivery to it, and
     shall not register the Transfer of any Residual Certificate until its
     receipt of, an affidavit and agreement (a "Transfer Affidavit and
     Agreement," in the form attached hereto as Exhibit F-2) from the proposed
     Transferee, in form and substance satisfactory to the Trustee, representing
     and warranting, among other things, that such Transferee is a Permitted
     Transferee, that it is not acquiring its Ownership Interest in the Residual
     Certificate that is the subject of the proposed Transfer

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<PAGE>

     as a nominee, trustee or agent for any Person that is not a Permitted
     Transferee, that for so long as it retains its Ownership Interest in a
     Residual Certificate, it will endeavor to remain a Permitted Transferee,
     and that it has reviewed the provisions of this Section 5.02(d) and agrees
     to be bound by them.

          (C) Notwithstanding the delivery of a Transfer Affidavit and Agreement
     by a proposed Transferee under clause (B) above, if a Responsible Officer
     of the Trustee who is assigned to this transaction has actual knowledge
     that the proposed Transferee is not a Permitted Transferee, no Transfer of
     an Ownership Interest in a Residual Certificate to such proposed Transferee
     shall be effected.

          (D) Each Person holding or acquiring any Ownership Interest in a
     Residual Certificate shall agree (x) to require a Transfer Affidavit and
     Agreement in the form attached hereto as Exhibit F-2 from any other Person
     to whom such Person attempts to transfer its Ownership Interest in a
     Residual Certificate and (y) not to transfer its Ownership Interest unless
     it provides a Transferor Affidavit (in the form attached hereto as Exhibit
     F-2) to the Trustee stating that, among other things, it has no actual
     knowledge that such other Person is not a Permitted Transferee.

          (E) Each Person holding or acquiring an Ownership Interest in a
     Residual Certificate, by purchasing an Ownership Interest in such
     Certificate, agrees to give the Trustee written notice that it is a
     "pass-through interest holder" within the meaning of temporary Treasury
     regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
     Ownership Interest in a Residual Certificate, if it is, or is holding an
     Ownership Interest in a Residual Certificate on behalf of, a "pass-through
     interest holder."

     (ii) The Trustee will register the Transfer of any Residual Certificate
only if it shall have received the Transfer Affidavit and Agreement and all of
such other documents as shall have been reasonably required by the Trustee as a
condition to such registration. In addition, no Transfer of a Residual
Certificate shall be made unless the Trustee shall have received a
representation letter from the Transferee of such Certificate to the effect that
such Transferee is a Permitted Transferee.

          (iii)(A) If any purported Transferee shall become a Holder of a
     Residual Certificate in violation of the provisions of this Section
     5.02(d), then the last preceding Permitted Transferee shall be restored, to
     the extent permitted by law, to all rights as holder thereof retroactive to
     the date of registration of such Transfer of such Residual Certificate. The
     Trustee shall be under no liability to any Person for any registration of
     Transfer of a Residual Certificate that is in fact not permitted by this
     Section 5.02(d) or for making any payments due on such Certificate to the
     holder thereof or for taking any other action with respect to such holder
     under the provisions of this Agreement.

          (B) If any purported Transferee shall become a holder of a Residual
     Certificate in violation of the restrictions in this Section 5.02(d) and to
     the extent that the retroactive restoration of the rights of the holder of
     such Residual Certificate as described in clause (iii)(A) above shall be
     invalid, illegal or unenforceable, then the Trustee shall have the right,

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<PAGE>

     without notice to the holder or any prior holder of such Residual
     Certificate, to sell such Residual Certificate to a purchaser selected by
     the Trustee on such terms as the Trustee may choose. Such purported
     Transferee shall promptly endorse and deliver each Residual Certificate in
     accordance with the instructions of the Trustee. Such purchaser may be the
     Trustee itself or any Affiliate of the Trustee. The proceeds of such sale,
     net of the commissions (which may include commissions payable to the
     Trustee or its Affiliates), expenses and taxes due, if any, will be
     remitted by the Trustee to such purported Transferee. The terms and
     conditions of any sale under this clause (iii)(B) shall be determined in
     the sole discretion of the Trustee, and the Trustee shall not be liable to
     any Person having an Ownership Interest in a Residual Certificate as a
     result of its exercise of such discretion.

     (iv) The Trustee shall make available to the Internal Revenue Service and
those Persons specified by the REMIC Provisions all information necessary to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is a Disqualified Organization,
including the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess inclusions" of
such Residual Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common Trust, partnership, trust, estate
or organization described in Section 1381 of the Code that holds an Ownership
Interest in a Residual Certificate having as among its record holders at any
time any Person which is a Disqualified Organization. Reasonable compensation
for providing such information may be accepted by the Trustee.

     (v) The provisions of this Section 5.02(d) set forth prior to this
subsection (v) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee and the NIMS Insurer at the expense of
the party seeking to modify, add to or eliminate any such provision the
following:

          (A) written notification from each Rating Agency to the effect that
     the modification, addition to or elimination of such provisions will not
     cause such Rating Agency to downgrade its then-current ratings of any Class
     of Certificates; and

          (B) an Opinion of Counsel, in form and substance satisfactory to the
     Trustee and the NIMS Insurer, to the effect that such modification of,
     addition to or elimination of such provisions will not cause any Trust
     REMIC to cease to qualify as a REMIC and will not cause any Trust REMIC to
     be subject to an entity-level tax caused by the Transfer of any Residual
     Certificate to a Person that is not a Permitted Transferee or a Person
     other than the prospective transferee to be subject to a REMIC-tax caused
     by the Transfer of a Residual Certificate to a Person that is not a
     Permitted Transferee.

     The Trustee shall forward to the NIMS Insurer a copy of the items delivered
to it pursuant to (A) and (B) above.

     (e) Subject to the preceding subsections, upon surrender for registration
of transfer of any Certificate at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.11, the Trustee shall execute,
authenticate and deliver, in the name of the

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     designated Transferee or Transferees, one or more new Certificates of the
     same Class of a like aggregate Percentage Interest.

     (f) At the option of the Holder thereof, any Certificate may be exchanged
for other Certificates of the same Class with authorized denominations and a
like aggregate Percentage Interest, upon surrender of such Certificate to be
exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.11. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute, authenticate and deliver, the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing. In addition, (i)
with respect to each Class R Certificate, the holder thereof may exchange, in
the manner described above, such Class R Certificate for two separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-I Interest and the Class R-II Interest, respectively, in each case
that was evidenced by the Class R Certificate being exchanged and (ii) with
respect to each Class R-X Certificate, the holder thereof may exchange, in the
manner described above, such Class R-X Certificate for two separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-III Interest and the Class R-IV Interest, respectively, in each case
that was evidenced by the Class R-X Certificate being exchanged.

     (g) No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

     (h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Trustee in accordance with its customary
procedures.

     SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.

     If (i) 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 (ii) there is delivered to the Trustee and the NIMS
Insurer such security or indemnity as may be required by it to save it harmless,
then, in the absence of actual knowledge by the Trustee that such Certificate
has been acquired by a bona fide purchaser or 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 the same Class and
of like denomination and Percentage Interest. Upon the issuance of any new
Certificate under this Section, 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) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the applicable REMIC created hereunder, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.

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     SECTION 5.04. Persons Deemed Owners.

     The Depositor, the Servicer, the NIMS Insurer, the Trustee and any agent of
any of them may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever, and none of the
Depositor, the Servicer, the NIMS Insurer, the Trustee or any agent of any of
them shall be affected by notice to the contrary.

     SECTION 5.05. Certain Available Information.

     On or prior to the date of the first sale of any Private Certificate to an
Independent third party, the Depositor shall provide to the Trustee ten copies
of any private placement memorandum or other disclosure document used by the
Depositor in connection with the offer and sale of such Certificates. In
addition, if any such private placement memorandum or disclosure document is
revised, amended or supplemented at any time following the delivery thereof to
the Trustee, the Depositor promptly shall inform the Trustee of such event and
shall deliver to the Trustee ten copies of the private placement memorandum or
disclosure document, as revised, amended or supplemented. The Trustee shall
maintain at its Corporate Trust Office and shall make available free of charge
during normal business hours for review by any Holder of a Certificate or any
Person identified to the Trustee as a prospective transferee of a Certificate,
originals or copies of the following items: (i) in the case of a Holder or
prospective transferee of a Private Certificate, the related private placement
memorandum or other disclosure document relating to such Class of Certificates,
in the form most recently provided to the Trustee; and (ii) in all cases, (A)
this Agreement and any amendments hereof entered into pursuant to Section 11.01,
(B) all monthly statements required to be delivered to Certificateholders of the
relevant Class pursuant to Section 4.02 since the Closing Date, and all other
notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date, (C) all certifications delivered by a Responsible Officer of the
Trustee since the Closing Date pursuant to Section 10.01(h), (D) any and all
Officers' Certificates delivered to the Trustee by the Servicer since the
Closing Date to evidence the Servicer's determination that any Advance or
Servicing Advance was, or if made, would be a Nonrecoverable Advance or
Nonrecoverable Servicing Advance, respectively, and (E) any and all Officers'
Certificates delivered to the Trustee by the Servicer since the Closing Date
pursuant to Section 4.04(a). Copies and mailing of any and all of the foregoing
items will be available from the Trustee upon request at the expense of the
Person requesting the same.

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                                   ARTICLE VI

                         THE DEPOSITOR AND THE SERVICER

     SECTION 6.01. Liability of the Servicer and the Depositor.

     The Servicer shall be liable in accordance herewith only to the extent of
the obligations specifically imposed upon and undertaken by Servicer herein. The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Depositor.

     SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations
          of, the Servicer or the Depositor.

     Any entity into which the Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.

     SECTION 6.03. Limitation on Liability of the Servicer and Others.

     (a) The Servicer (except the Trustee if it is required to succeed the
Servicer hereunder) indemnifies and holds the NIMS Insurer, the Trustee and the
Depositor harmless against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the NIMS Insurer, the Trustee and the Depositor
may sustain in any way related to the failure of the Servicer to perform its
duties and service the Mortgage Loans in compliance with the terms of this
Agreement. The Servicer shall immediately notify the NIMS Insurer, the Trustee
and the Depositor if a claim is made that may result in such claims, losses,
penalties, fines, forfeitures, legal fees or related costs, judgments, or any
other costs, fees and expenses, and the Servicer shall assume (with the consent
of the Trustee) the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against the NIMS Insurer,
the Trustee and/or the Depositor in respect of such claim. The provisions of
this Section 6.03 shall survive the termination of this Agreement and the
payment of the outstanding Certificates. Any payment hereunder made by the
Servicer to the Trustee shall be from the Servicer's own funds, without
reimbursement from REMIC I therefor.

     (b) None of the Servicer, the NIMS Insurer or the Depositor nor any of the
directors or officers or employees or agents of the Servicer, the NIMS Insurer
or the Depositor shall be under any liability to the Trust or the
Certificateholders for any action taken or for refraining from the taking of any
action by the Servicer or the Depositor in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer, the Depositor or any such Person against any
liability which would otherwise be imposed by reason of

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<PAGE>

its willful misfeasance, bad faith or negligence in the performance of duties of
the Servicer or the Depositor, as the case may be, or by reason of its reckless
disregard of its obligations and duties of the Servicer or the Depositor, as the
case may be, hereunder. The NIMS Insurer, the Servicer and any director or
officer or employee or agent of the NIMS Insurer 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 Servicer,
the NIMS Insurer and the Depositor, and any director or officer or employee or
agent of the Servicer, the NIMS Insurer or the Depositor, shall be indemnified
by the Trust and held harmless against any loss, liability or expense incurred
in connection with (i) any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred by reason of
its willful misfeasance, bad faith or negligence or by reason of its reckless
disregard of obligations and duties hereunder or by reason of its failure to
perform its obligations or duties hereunder and (ii) any breach of a
representation or warranty by such party regarding the Mortgage Loans. The
Servicer, the NIMS Insurer or the Depositor may undertake any such action which
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 Certificateholders
hereunder. In such event, unless the Depositor or the Servicer acts without the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights, the reasonable legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust and
the Servicer, and the NIMS Insurer shall be entitled to be reimbursed therefor
from the Collection Account as and to the extent provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Collection Account. The Servicer's right to
indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination). This paragraph shall apply to the Servicer solely
in its capacity as Servicer hereunder and in no other capacities.

     SECTION 6.04. Servicer Not to Resign.

     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 pursuant to the
preceding sentence permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect obtained at the expense of the Servicer
and delivered to the Trustee and the NIMS Insurer. No resignation of the
Servicer shall become effective until the Trustee or a successor servicer
acceptable to the NIMS Insurer shall have assumed the Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.

     Except as expressly provided in this Agreement, the Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Servicer hereunder. The foregoing prohibition on assignment
shall not prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however, no
Sub-Servicer shall be a third-party beneficiary hereunder and the parties hereto
shall not be required to recognize any Subservicer as an indemnitee under this
Agreement.

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<PAGE>

     SECTION 6.05. Delegation of Duties.

     In the ordinary course of business, the Servicer at any time may delegate
any of its duties hereunder to any Person, including any of its Affiliates, who
agrees to conduct such duties in accordance with standards comparable to those
set forth in Section 3.01. Such delegation shall not relieve the Servicer of its
liabilities and responsibilities with respect to such duties and shall not
constitute a resignation within the meaning of Section 6.04. Except as provided
in Section 3.02, no such delegation is permitted that results in the delegee
subservicing any Mortgage Loans. The Servicer shall provide the Trustee with 60
days prior written notice prior to the delegation of any of its duties to any
Person other than any of the Servicer's Affiliates or their respective
successors and assigns.

     SECTION 6.06. Reserved.

     SECTION 6.07. Inspection.

     The Servicer, in its capacity as Servicer, shall afford the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Servicer in respect of its rights and obligations hereunder
and access to officers of the Servicer responsible for such obligations.

     SECTION 6.08. Duties of the Credit Risk Manager.

     For and on behalf of the Depositor, the Credit Risk Manager will provide
reports and recommendations concerning certain delinquent and defaulted Mortgage
Loans, and as to the collection of any Prepayment Charges with respect to the
Mortgage Loans. Such reports and recommendations will be based upon information
provided to the Credit Risk Manager pursuant to the Credit Risk Management
Agreement, and the Credit Risk Manager shall look solely to the Servicer for all
information and data (including loss and delinquency information and data)
relating to the servicing of the related Mortgage Loans. Upon any termination of
the Credit Risk Manager or the appointment of a successor Credit Risk Manager,
the Depositor shall give written notice thereof to the Servicer, the Trustee,
and each Rating Agency. Notwithstanding the foregoing, the termination of the
Credit Risk Manager pursuant to this Section shall not become effective until
the appointment of a successor Credit Risk Manager.

     SECTION 6.09. Limitation Upon Liability of the Credit Risk Manager.

     Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by either Servicer under the Credit Risk
Management Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Credit Risk Manager or any such person against
liability that would otherwise be imposed by reason of willful malfeasance or
bad faith in its performance of its duties. The Credit Risk Manager and any
director, officer, employee, or agent of the Credit Risk Manager may rely in
good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person

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<PAGE>

respecting any matters arising hereunder, and may rely in good faith upon the
accuracy of information furnished by either Servicer pursuant to the applicable
Credit Risk Management Agreement in the performance of its duties thereunder and
hereunder.

     SECTION 6.10. Removal of the Credit Risk Manager.

     The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust Fund, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager.

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<PAGE>

                                   ARTICLE VII

                                     DEFAULT

     SECTION 7.01. Servicer Events of Default.

     (a) "Servicer Event of Default," wherever used herein, means any one of the
following events:

          (i) any failure by the Servicer to remit to the Trustee for
     distribution to the Certificateholders any payment (other than an Advance
     required to be made from its own funds on any Servicer Remittance Date
     pursuant to Section 4.03) required to be made under the terms of the
     Certificates and this Agreement which continues unremedied for a period of
     one Business Day after the date upon which written notice of such failure,
     requiring the same to be remedied, shall have been given to the Servicer by
     the Depositor or the Trustee (in which case notice shall be provided by
     telecopy), or to the Servicer, the Depositor and the Trustee by the NIMS
     Insurer or the Holders of Certificates entitled to at least 25% of the
     Voting Rights; or

          (ii) any failure on the part of the Servicer duly 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 the breach by the
     Servicer of any representation and warranty contained in Section 2.05,
     which continues unremedied for a period of 30 days (or if such failure or
     breach cannot be remedied within 30 days, then such remedy shall have been
     commenced within 30 days and diligently pursued thereafter; provided,
     however, that in no event shall such failure or breach be allowed to exist
     for a period of greater than 90 days) after the earlier of (i) the date on
     which written notice of such failure, requiring the same to be remedied,
     shall have been given to the Servicer by the Depositor, the Trustee or to
     the Servicer, the Depositor and the Trustee by the NIMS Insurer or the
     Holders of Certificates entitled to at least 25% of the Voting Rights and
     (ii) actual knowledge of such failure by a Servicing Officer of the
     Servicer; or

          (iii) a decree or order of a court or agency or supervisory authority
     having jurisdiction in the premises in an involuntary case under any
     present or future federal or state bankruptcy, insolvency or similar law or
     the appointment of a conservator or receiver or liquidator in any
     insolvency, readjustment of debt, marshalling of assets and liabilities or
     similar proceeding, or for the winding-up or liquidation of its affairs,
     shall have been entered against the Servicer and such decree or order shall
     have remained in force undischarged or unstayed for a period of 90 days; or

          (iv) the Servicer shall consent to the appointment of a conservator or
     receiver or liquidator in any insolvency, readjustment of debt, marshalling
     of assets and liabilities or similar proceedings of or relating to it or of
     or relating to all or substantially all of its property; or

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<PAGE>

          (v) the Servicer shall admit in writing its inability to pay its debts
     generally as they become due, file a petition to take advantage of any
     applicable insolvency or reorganization statute, make an assignment for the
     benefit of its creditors, or voluntarily suspend payment of its
     obligations; or

          (vi) [reserved]; or

          (vii) any failure of the Servicer to make any Advance on any Servicer
     Remittance Date required to be made from its own funds pursuant to Section
     4.03 which continues unremedied until 5:00 p.m. New York time on the
     Distribution Date.

     If a Servicer Event of Default described in clauses (i) through (vi) of
this Section shall occur, then, and in each and every such case, so long as such
Servicer Event of Default shall not have been remedied, the Depositor or the
Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights or the NIMS Insurer, the Trustee
shall, by notice in writing to the Servicer (and to the Depositor if given by
the Trustee or to the Trustee if given by the Depositor), terminate, subject to
Section 7.02 hereof, all of the rights and obligations of the Servicer in its
capacity as Servicer under this Agreement, to the extent permitted by law, and
in and to the Mortgage Loans and the proceeds thereof. If a Servicer Event of
Default described in clause (vii) hereof, the Trustee shall be obligated to make
such Advance and, then so long as such Servicer Event of Default shall not have
been remedied during the applicable time period set forth in clause (vii) above
(including the reimbursement to the Trustee by the Servicer, with interest
thereon at the Prime Rate, for any Advance made), the Trustee shall, by notice
in writing to the Servicer, the Depositor and the NIMS Insurer, terminate,
subject to Section 7.02 hereof, all of the rights and obligations of the
Servicer in its capacity as Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof. On or after the receipt by the Servicer
of such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Certificates (other than as a Holder of
any Certificate) or the Mortgage Loans or otherwise, shall pass to and be vested
in the Trustee pursuant to and under this Section, and, without limitation, the
Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise, to
execute and deliver, on behalf of and at the expense of the Servicer, 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. The Servicer agrees to
promptly (and in any event no later than ten Business Days subsequent to such
notice) provide the Trustee with all documents and records requested by it to
enable it to assume the Servicer's functions under this Agreement, and to
cooperate with the Trustee in effecting the termination of the Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Servicer to the Collection Account held by or on behalf of the Servicer, the
Distribution Account or any REO Account or Escrow Account held by or on behalf
of the Servicer or thereafter be received with respect to the Mortgage Loans or
any REO Property serviced by the Servicer (provided, however, that the Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of Advances or otherwise, and shall continue to be entitled to the
benefits of

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<PAGE>

Section 6.03, notwithstanding any such termination, with respect to events
occurring prior to such termination). For purposes of this Section 7.01, the
Trustee shall not be deemed to have knowledge of a Servicer Event of Default
unless a Responsible Officer of the Trustee assigned to and working in the
Trustee's Corporate Trust Office has actual knowledge thereof or unless written
notice of any event which is in fact such a Servicer Event of Default is
received by the Trustee and such notice references the Certificates, the Trust
Fund or this Agreement.

     SECTION 7.02. Trustee to Act; Appointment of Successor.

     (a)(1) From the time the Servicer (and the Trustee, if notice is sent by
the Holders of Certificates entitled to at least 51% of Voting Rights or the
NIMS Insurer) receives a notice of termination, the Trustee (or such other
successor Servicer as is acceptable to the NIMS Insurer) shall be the successor
in all respects to the Servicer in its capacity as Servicer under this Agreement
and the transactions set forth or provided for herein, and all the
responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Trustee (except for any representations or warranties of
the Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.05 (other than with respect to Section 2.05(x)) and the
obligation to deposit amounts in respect of losses pursuant to Section 3.12) by
the terms and provisions hereof; provided, however, the Trustee shall
immediately assume the Servicer's obligations to make Advances pursuant to
Section 4.03; provided, further, however, that if the Trustee is prohibited by
law or regulation from obligating itself to make advances regarding delinquent
mortgage loans, then the Trustee shall not be obligated to make Advances
pursuant to Section 4.03; and provided further, that any failure to perform such
duties or responsibilities caused by the Servicer's failure to provide
information required by Section 7.01 shall not be considered a default by the
Trustee as successor to the Servicer hereunder. As compensation therefor, the
Trustee shall be entitled to the Servicing Fee and all funds relating to the
Mortgage Loans to which the Servicer would have been entitled if it had
continued to act hereunder. Notwithstanding the above and subject to Section
7.02(a)(2) below, the Trustee if it shall be unwilling to so act, or shall, if
it is unable to so act or if it is prohibited by law from making advances
regarding delinquent mortgage loans or if the Holders of Certificates entitled
to at least 51% of the Voting Rights or the NIMS Insurer so request in writing
to the Trustee, promptly appoint or petition a court of competent jurisdiction
to appoint, an established mortgage loan servicing institution acceptable to
each Rating Agency and the NIMS Insurer and having a net worth of not less than
$15,000,000, as the successor to the Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer under this Agreement.

     Pending appointment of a successor to the Servicer hereunder, unless the
Trustee is prohibited by law from so acting, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to exceed the
Servicing Fee). The appointment of a successor Servicer shall not affect any
liability of the predecessor Servicer which may have arisen under this Agreement
prior to its termination as Servicer to pay any deductible under an insurance
policy pursuant to Section 3.14 or to indemnify the NIMS Insurer pursuant to
Section 6.03, nor shall any successor Servicer be liable for any acts or
omissions of the predecessor Servicer or

                                      -132-

<PAGE>

for any breach by such Servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. All reasonable Servicing Transfer
Costs shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the successor Servicer
or the Trustee (in which case the successor Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust Fund pursuant to Section 3.11(b)).

     (2) Notwithstanding Section 7.01 or any other provision of this Section
7.02, it is understood, agreed and acknowledged by the parties hereto that there
will be a period of transition (not to exceed 90 days) before the transition of
servicing obligations to the Trustee or other successor Servicer is fully
effective. Until completion of such transition, the predecessor Servicer shall
continue to perform such duties and obligations under this Agreement as shall be
reasonably required by the Trustee or other successor Servicer, for which the
predecessor Servicer shall receive such reasonable compensation (not to exceed
the Servicing Fee) as shall be agreed to by the predecessor Servicer and the
Trustee or other successor Servicer. The predecessor Servicer will continue to
be liable under this Agreement for the performance of such duties and
obligations subject to the provisions of Section 6.01 and 6.03 hereof, and
neither the Trustee or other successor Servicer shall have any liability for the
predecessor Servicer's performance of, or failure to perform, such duties and
obligations.

     (3) No appointment of a successor to the Servicer under this Agreement
shall be effective until the assumption by the successor of all of the
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Servicer under this
Agreement or the Trustee shall act in such capacity as hereinabove provided.

     Any successor to the Servicer, including the Trustee, shall during the term
of its service as servicer continue to service and administer the Mortgage Loans
for the benefit of Certificateholders, and maintain in force a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a Fidelity Bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.14.

     (b) In connection with the termination or resignation of the Servicer
hereunder, either (i) the successor servicer, including the Trustee if the
Trustee is acting as successor Servicer, shall represent and warrant that it is
a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to revise its records to reflect the transfer of servicing to the successor
Servicer as necessary under MERS' rules and regulations, or (ii) the

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<PAGE>

predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to execute and deliver an assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Trustee and to execute and deliver such other
notices, documents and other instruments as may be necessary or desirable to
effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor Servicer. The predecessor Servicer shall
file or cause to be filed any such assignment in the appropriate recording
office. The predecessor Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this Section 7.02(b).

     SECTION 7.03. Notification to Certificateholders.

     (a) Upon any termination of the Servicer pursuant to Section 7.01 above or
any appointment of a successor to the Servicer pursuant to Section 7.02 above,
the Trustee shall give prompt written notice thereof to Certificateholders and
the NIMS Insurer at their respective addresses appearing in the Certificate
Register.

     (b) Not later than the later of 60 days after the occurrence of any event,
which constitutes or which, with notice or lapse of time or both, would
constitute a Servicer Event of Default or five days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such an event, the Trustee
shall transmit by mail to the NIMS Insurer and to all Holders of Certificates
notice of each such occurrence, unless such default or Servicer Event of Default
shall have been cured or waived.

     SECTION 7.04. Waiver of Servicer Events of Default.

     The Holders representing at least 66% of the Voting Rights (with the
consent of the NIMS Insurer) evidenced by all Classes of Certificates affected
by any default or Servicer Event of Default hereunder may waive such default or
Servicer Event of Default; provided, however, that a default or Servicer Event
of Default under clause (i) or (vii) of Section 7.01 may be waived only by all
of the Holders of the Regular Certificates (with the consent of the NIMS
Insurer). Upon any such waiver of a default or Servicer Event of Default, such
default or Servicer Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Servicer Event of Default or impair any right
consequent thereon except to the extent expressly so waived. Notice of any such
waiver shall be given by the Trustee to the Rating Agencies and the NIMS
Insurer.

     SECTION 7.05. Survivability of Servicer Liabilities.

     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.

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

     SECTION 8.01. Duties of Trustee

     The Trustee prior to the occurrence of a Servicer Event of Default and
after the curing of all Servicer Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. During a Servicer Event of Default, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs. Any permissive right of the Trustee enumerated in this Agreement shall
not be construed as a duty.

     The Trustee upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to it, which
are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement; provided, however, that the Trustee will not be
responsible for the accuracy or content of any such resolutions, certificates,
statements, opinions, reports, documents or other instruments. If any such
instrument is found not to conform to the requirements of this Agreement in a
material manner, it shall take such action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to its
satisfaction, it will provide notice thereof to the Certificateholders and the
NIMS Insurer.

     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; provided, however, that:

          (i) Prior to the occurrence of a Servicer Event of Default, and after
     the curing of all such Servicer Events of Default which may have occurred,
     the duties and obligations of the Trustee shall be determined solely by the
     express provisions of this Agreement, the Trustee shall be liable except
     for the performance of such duties and obligations as are specifically set
     forth in this Agreement, no implied covenants or obligations shall be read
     into this Agreement against the Trustee, and in the absence of bad faith on
     the part of the Trustee, 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 that conform to
     the requirements of this Agreement;

          (ii) The Trustee shall not be personally liable for an error of
     judgment made in good faith by a Responsible Officer or Responsible
     Officers of it unless it shall be proved that it was negligent in
     ascertaining the pertinent facts;

          (iii) The Trustee shall not be personally liable with respect to any
     action taken, suffered or omitted to be taken by it in good faith in
     accordance with the direction of the NIMS Insurer or the Holders of
     Certificates entitled to at least 25% of the Voting Rights

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<PAGE>

     relating to the time, method and place of conducting any proceeding for any
     remedy available to it or exercising any trust or power conferred upon it
     under this Agreement; and

          (iv) The Trustee shall not be required to take notice or be deemed to
     have notice or knowledge of any default or Master Servicer Event of
     Termination unless a Responsible Officer of the Trustee at the Corporate
     Trust Office obtains actual knowledge of such failure or the Trustee
     receives written notice of such failure from the Depositor, the Servicer or
     the Holders of Certificates evidencing not less than 51% of the Voting
     Rights.

     The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of 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 rely upon and shall be protected in
     acting or refraining from acting upon any resolution, Officers'Certificate,
     certificate of auditors or any other certificate, statement, instrument,
     opinion, report, notice, request, consent, order, appraisal, bond or other
     paper or document reasonably believed by it to be genuine and to have been
     signed or presented by the proper party or parties;

          (ii) The Trustee may consult with counsel and any Opinion of Counsel
     shall be full and complete authorization and protection in respect of any
     action taken or suffered or omitted by it hereunder in good faith and in
     accordance with such Opinion of Counsel;

          (iii) The Trustee shall not be under any obligation to exercise any of
     the trusts or powers vested in it by this Agreement or to institute,
     conduct or defend any litigation hereunder or in relation hereto at the
     request, order or direction of any of the Certificateholders or the NIMS
     Insurer, pursuant to the provisions of this Agreement, unless such
     Certificateholders or the NIMS Insurer, as applicable, shall have offered
     to the Trustee reasonable security or indemnity against the costs, expenses
     and liabilities which may be incurred therein or thereby; nothing contained
     herein shall, however, relieve the Trustee of the obligation, upon the
     occurrence of a Servicer Event of Default (which has not been cured or
     waived), to exercise such of the rights and powers vested in it by this
     Agreement, and to use the same degree of care and skill in their exercise
     as a prudent person would exercise or use under the circumstances in the
     conduct of such person's own affairs;

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<PAGE>

          (iv) The Trustee shall not be personally 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;

          (v) Prior to the occurrence of a Servicer Event of Default hereunder
     and after the curing of all Servicer Events of Default which 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 to do so by
     the NIMS Insurer or the Holders of Certificates entitled to at least 25% of
     the Voting Rights; provided, however, that if the payment within a
     reasonable time to the Trustee, of the costs, expenses or liabilities
     likely to be incurred by it in the making of such investigation is, in the
     opinion of the Trustee, not reasonably assured to the Trustee, by such
     Certificateholders, the Trustee may require reasonable indemnity against
     such expense, or liability from such Certificateholders or the NIMS
     Insurer, as applicable, as a condition to taking any such action;

          (vi) The Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents or
     attorneys; provided, that the Trustee shall not be responsible for any
     negligence or willful misconduct on the part of the Custodian or any such
     agents or attorneys appointed by it with due care; and

          (vii) The Trustee shall not be personally liable for any loss
     resulting from the investment of funds held in the Collection Account at
     the direction of the Servicer pursuant to Section 3.12.

     (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

     (c) [Reserved].

     SECTION 8.03. Trustee not Liable for Certificates or Mortgage Loans.

     The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the authentication of the Trustee on the Certificates,
the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.12) shall be taken as
the statements of the Depositor and the Trustee shall not assume any
responsibility for their correctness. The Trustee shall not make any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 8.12) or of the
Certificates (other than the signature of the Trustee, and authentication of the
Trustee on the Certificates) or of any Mortgage Loan or related document or of
MERS or the MERS(R) System. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the

                                      -137-

<PAGE>

Collection Account by the Servicer, other than any funds held by or on behalf of
the Trustee in accordance with Section 3.10.

     SECTION 8.04. Trustee May Own Certificates.

     The Trustee in its individual capacity or any other capacity may become the
owner or pledgee of Certificates with the same rights it would have if it were
not the Trustee.

     SECTION 8.05. Trustee's Fees and Expenses.

     The Trustee shall be entitled to withdraw from the Distribution Account,
pursuant to Section 3.11(b), on each Distribution Date and pay to itself the
Trustee Fee. The Trustee and any director, officer, employee or agent of the
Trustee, shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee including the compensation and the expenses and
disbursements of its agents and counsel, in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) incurred by the
Trustee arising out of or in connection with the acceptance or administration of
its obligations and duties under this Agreement up to a limit of $600,000 per
calender year, other than any loss, liability or expense (i) resulting from any
breach of the Servicer's obligations in connection with this Agreement, (ii)
that constitutes a specific liability of the Trustee pursuant to Section
10.01(g) or (iii) 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 as a result
of a breach of the Trustee's obligations under Article X hereof. It is
understood by the parties hereto that a "claim" as used in the preceding
sentence includes any claim for indemnification made by the Custodian under
Section 11 of the Custodial Agreement. Notwithstanding anything herein to the
contrary, the Trustee shall be reimbursed from the Trust Fund for all Servicing
Transfer Costs without regard to the annual limitation.

     SECTION 8.06. Eligibility Requirements for Trustee

     The Trustee hereunder shall at all times be a corporation or an association
(other than the Depositor, the Originator, the Seller, the Servicer or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 (or a member of a bank holding company whose capital and surplus is
at least $50,000,000) and subject to supervision or examination by federal or
state authority. If such corporation or association publishes reports of
conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07.

     SECTION 8.07. Resignation and Removal of the Trustee

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<PAGE>

     The Trustee may at any time resign and be discharged from the trust hereby
created by giving written notice thereof to the Depositor, the NIMS Insurer, the
Servicer and to the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee acceptable
to the NIMS Insurer by written instrument, in duplicate, which instrument shall
be delivered to the resigning Trustee and to the successor trustee. A copy of
such instrument shall be delivered to the Certificateholders, the Trustee and
the Servicer by the Depositor. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.

     If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Depositor or the NIMS Insurer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged 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 or the NIMS Insurer may remove the and appoint a successor trustee
acceptable to the NIMS Insurer by written instrument, in duplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders,
the Trustee and the Servicer by the Depositor.

     The Holders of Certificates entitled to at least 51% of the Voting Rights
(or the NIMS Insurer upon failure of the Trustee to perform its obligations
hereunder) may at any time remove the Trustee and appoint a successor trustee
acceptable to the NIMS Insurer by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Depositor, one
complete set to the Trustee so removed and one complete set to the successor so
appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Servicer by the Depositor.

     Any resignation or removal of the Trustee and appointment of a successor
trustee, pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 8.08. Notwithstanding the foregoing, in the event the Trustee is
unable to continue to perform its obligations pursuant to the terms of this
Agreement prior to the appointment of a successor, the Trustee shall be
obligated to perform such obligations until a new trustee is appointed. Such
performance shall be without prejudice to any claim by a party hereto or
beneficiary hereof resulting from the Trustee's breach of its obligations
hereunder.

     SECTION 8.08. Successor Trustee

     Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor, the NIMS Insurer and its predecessor
trustee 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. The predecessor

                                      -139-

<PAGE>

trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements to the extent held by it hereunder, as well as all
moneys, held by it hereunder (other than any Mortgage Files at the time held by
the Custodian, which Custodian shall become the agent of any successor trustee
hereunder), and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.

     No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 8.06 and the appointment of such successor
trustee shall not result in a downgrading of any Class of Certificates by any
Rating Agency, as evidenced by a letter from each Rating Agency.

     Upon acceptance of appointment by a successor trustee, as provided in this
Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.

     SECTION 8.09. Merger or Consolidation of Trustee.

     Any corporation or association into which either the Trustee may be merged
or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

     SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

     Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of REMIC
I or property securing the same may at the time be located, the Trustee shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee and the NIMS Insurer to act as co-trustee
or co-trustees, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of REMIC I, and to vest in such Person or Persons,
in such capacity, such title to REMIC I, or any part thereof, and, subject to
the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
NIMS Insurer. If the NIMS Insurer shall not have joined in such appointment
within 15 days after the receipt by it of a request to do so, 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 8.06 hereunder and no notice to Holders of Certificates of
the appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

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<PAGE>

     In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed by the Trustee (whether as Trustee hereunder or as
successor to a defaulting 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 REMIC I or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.

     Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee, or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the NIMS Insurer.

     Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee or co-trustee.

     SECTION 8.11. Appointment of Office or Agency; Appointment of Custodian.

     The Trustee will appoint an office or agency in the City of St. Paul,
Minnesota where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates and this Agreement may be
served.

     The Trustee may, with the consent of the Depositor, the Servicer and the
NIMS Insurer, appoint the Custodian to hold all or a portion of the Mortgage
Files as agent for the Trustee, by entering into the Custodial Agreement. The
appointment of the Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Servicer or the
NIMS Insurer to the Trustee, the consent to which shall not be unreasonably
withheld. The Trustee initially appoints Wells Fargo Bank, N.A. as Custodian,
and the Depositor and the Servicer each consent to such appointment. Subject to
Article VIII hereof, the Trustee agrees to comply with the terms of the
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders having an interest in any
Mortgage File held by the Custodian. The Custodian shall be a depository
institution or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least

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<PAGE>

$10,000,000 and shall be qualified to do business in the jurisdiction in which
it holds any Mortgage File. Subject to Section 8.02(a), in no event shall the
appointment of the Custodian pursuant to the Custodial Agreement diminish the
obligations of the Trustee hereunder.

     SECTION 8.12. Representations and Warranties.

     The Trustee hereby represents and warrants to the Servicer and the
Depositor, as of the Closing Date, that:

          (i) It is a national banking association duly organized, validly
     existing and in good standing under the laws of the United States of
     America.

          (ii) The execution and delivery of this Agreement by it, and the
     performance and compliance with the terms of this Agreement by it, will not
     violate its articles of association or bylaws or constitute a default (or
     an event which, with notice or lapse of time, or both, would constitute a
     default) under, or result in the breach of, any material agreement or other
     instrument to which it is a party or which is applicable to it or any of
     its assets.

          (iii) It has the full power and authority to enter into and consummate
     all transactions contemplated by this Agreement, has duly authorized the
     execution, delivery and performance of this Agreement, and has duly
     executed and delivered this Agreement.

          (iv) This Agreement, assuming due authorization, execution and
     delivery by the other parties hereto, constitutes a valid, legal and
     binding obligation of it, enforceable against it in accordance with the
     terms hereof, subject to (A) applicable bankruptcy, insolvency,
     receivership, reorganization, moratorium and other laws affecting the
     enforcement of creditors'rights generally, and (B) general principles of
     equity, regardless of whether such enforcement is considered in a
     proceeding in equity or at law.

          (v) It is not in violation of, and its execution and delivery of this
     Agreement and its performance and compliance with the terms of this
     Agreement will not constitute a violation of, any law, any order or decree
     of any court or arbiter, or any order, regulation or demand of any federal,
     state or local governmental or regulatory authority, which violation, in
     its good faith and reasonable judgment, is likely to affect materially and
     adversely either the ability of it to perform its obligations under this
     Agreement or its financial condition.

          (vi) No litigation is pending or, to the best of its knowledge,
     threatened against it, which would prohibit it from entering into this
     Agreement or, in its good faith reasonable judgment, is likely to
     materially and adversely affect either the ability of it to perform its
     obligations under this Agreement or its financial condition.

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<PAGE>

                                   ARTICLE IX

                                   TERMINATION

     SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage
          Loans.

     (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Servicer and the
Trustee (other than the indemnification obligations of the Servicer pursuant to
Section 6.03 and of the Servicer to make remittances to the Trustee and the
Trustee to make payments in respect of the REMIC I Regular Interests and the
Classes of Certificates as hereinafter set forth) shall terminate upon payment
to the Certificateholders and the deposit of all amounts held by or on behalf of
the Trustee and required hereunder to be so paid or deposited on the
Distribution Date coinciding with or following the earlier to occur of (i) the
purchase by the Terminator (as defined below) of all Mortgage Loans and each REO
Property remaining in REMIC I and (ii) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in REMIC I; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James, living on the date hereof. Subject
to Section 3.10 hereof, the purchase by the Terminator of all Mortgage Loans and
each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to the greater of (i) the Stated Principal Balance of the Mortgage
Loans and the appraised value of any REO Properties, such appraisal to be
conducted by an Independent appraiser mutually agreed upon by the Terminator and
the Trustee in their reasonable discretion and (ii) the fair market value of all
of the assets of REMIC I (as determined by the Terminator and the Trustee, as of
the close of business on the third Business Day next preceding the date upon
which notice of any such termination is furnished to Certificateholders pursuant
to the third paragraph of this Section 9.01) in each case, plus accrued and
unpaid interest thereon at the weighted average of the Mortgage Rates through
the end of the Due Period preceding the final Distribution Date, plus
unreimbursed Servicing Advances, Advances, any unpaid Servicing Fees and Trustee
Fees allocable to such Mortgage Loans and REO Properties, any accrued and unpaid
Net WAC Rate Carryover Amount; provided, however, such option may only be
exercised if (i) the Termination Price is sufficient to pay all interest accrued
on, as well as amounts necessary to retire the principal balance of, each class
of notes issued pursuant to the Indenture and any remaining amounts owed to the
trustee under the Indenture and the NIMS Insurer on the date such notes are
retired and (ii) the fair market value of the Mortgage Loans and REO Properties
determined as described above is at least equal to the Principal Balance of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and the appraised value of the REO Properties.

     (b) The majority holder of the Class CE Certificates (so long as such
holder is not an affiliate of the Seller) or if such majority holder fails to
exercise such right, the Servicer (or if the Servicer fails to exercise such
right, the NIMS Insurer) shall have the right (the party exercising such right,
the "Terminator"), to purchase all of the Mortgage Loans and each REO Property
remaining in REMIC I pursuant to clause (i) of the preceding paragraph no later
than the Determination Date

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<PAGE>

in the month immediately preceding the Distribution Date on which the
Certificates will be retired; provided, however, that the Terminator may elect
to purchase all of the Mortgage Loans and each REO Property remaining in REMIC I
pursuant to clause (i) above only if the aggregate Stated Principal Balance of
the Mortgage Loans and each REO Property remaining in the Trust Fund at the time
of such election is reduced to less than 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date. By acceptance of the
Residual Certificates, the Holder of the Residual Certificates agrees for so
long as any notes insured by the NIMS Insurer and secured by all or a portion of
the Class CE, Class P or Class R Certificates are outstanding, in connection
with any termination hereunder, to assign and transfer any amounts in excess of
par, and to the extent received in respect of such termination, to pay any such
amounts to the Holders of the Class CE Certificates.

     (c) Notice of the liquidation of the Certificates shall be given promptly
by the Trustee by letter to Certificateholders and the NIMS Insurer mailed (a)
in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
10th day and not later than the 20th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and the final payment in respect of the REMIC I Regular Interests and
the Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC I Regular Interests or the Certificates from and after the Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee . In the event such notice is given in connection with the purchase
of all of the Mortgage Loans and each REO Property remaining in REMIC I by the
Terminator, the Terminator shall deliver to the Trustee for deposit in the
Distribution Account not later than the last Business Day of the month next
preceding the month of the final distribution on the Certificates an amount in
immediately available funds equal to the Termination Price. The Trustee shall
remit to the Servicer from such funds deposited in the Distribution Account (i)
any amounts which the Servicer would be permitted to withdraw and retain from
the Collection Account pursuant to Section 3.11 and (ii) any other amounts
otherwise payable by the Trustee to the Servicer from amounts on deposit in the
Distribution Account pursuant to the terms of this Agreement, in each case prior
to making any final distributions pursuant to Section 10.01(d) below. Upon
certification to the Trustee by the Terminator of the making of such final
deposit, the Trustee shall promptly release to the Terminator the Mortgage Files
for the remaining Mortgage Loans, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.

     (d) Upon presentation of the Certificates by the Certificateholders on the
final Distribution Date, the Trustee shall distribute to each Certificateholder
so presenting and surrendering its Certificates the amount otherwise
distributable on such Distribution Date in accordance with Section 4.01 in
respect of the Certificates so presented and surrendered. Any funds not
distributed to any Holder or Holders of Certificates being retired on such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust and
credited to the account of the appropriate non-tendering Holder or

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Holders. If any Certificates as to which notice has been given pursuant to this
Section 9.01 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to the remaining non-
tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the Trust Fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to UBS Securities LLC
all such amounts, and all rights of non-tendering Certificateholders in or to
such amounts shall thereupon cease. No interest shall accrue or be payable to
any Certificateholder on any amount held in trust by the Trustee as a result of
such Certificateholder's failure to surrender its Certificate(s) for final
payment thereof in accordance with this Section 9.01. Any such amounts held in
trust by the Trustee shall be held in an Eligible Account and the Trustee may
direct any depository institution maintaining such account to invest the funds
in one or more Permitted Investments. All income and gain realized from the
investment of funds deposited in such accounts held in trust by the Trustee
shall be for the benefit of the Trustee; provided, however, that the Trustee
shall deposit in such account the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon the realization of such loss.

     Immediately following the deposit of funds in trust hereunder in respect of
the Certificates, the Trust Fund shall terminate.

     SECTION 9.02. Additional Termination Requirements.

     (a) In the event that the Terminator purchases all the Mortgage Loans and
each REO Property or the final payment on or other liquidation of the last
Mortgage Loan or REO Property remaining in REMIC I pursuant to Section 9.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee and the Servicer have received an Opinion of
Counsel, which Opinion of Counsel shall be at the expense of the Terminator (or
in connection with a termination resulting from the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I,
which Opinion of Counsel shall be at the expense of the person seeking
nonadherence to the following additional requirements but which in no event
shall be at the expense of the Trust Fund or, unless it is the person seeking
nonadherence to the following additional requirements, the Servicer or the
Trustee), to the effect that the failure of REMIC I to comply with such
additional requirements of this Section 9.02 will not (A) result in the
imposition on the Trust Fund of taxes on "prohibited transactions," as described
in Section 860F of the Code, or (B) cause REMIC I to fail to qualify as a REMIC
at any time that any Certificate is outstanding:

          (i) The Trustee shall specify the first day in the 90-day liquidation
     period in a statement attached to each Trust REMIC's final Tax Return
     pursuant to Treasury regulation Section 1.860F-1 and shall satisfy all
     requirements of a qualified liquidation under Section 860F of the Code and
     any regulations thereunder, as evidenced by an Opinion of Counsel obtained
     at the expense of the Terminator;

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<PAGE>

          (ii) During such 90-day liquidation period and, at or prior to the
     time of making of the final payment on the Certificates, the Trustee shall
     sell all of the assets of REMIC I to the Terminator 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 Holders of the Residual Certificates all
     cash on hand in the Trust Fund (other than cash retained to meet claims),
     and the Trust Fund shall terminate at that time.

     (b) At the expense of the Terminator, the Depositor shall prepare or cause
to be prepared the documentation required in connection with the adoption of a
plan of liquidation of each Trust REMIC pursuant to this Section 9.02.

     (c) By their acceptance of Certificates, the Holders thereof hereby agree
to authorize the Trustee to specify the 90-day liquidation period for each Trust
REMIC, which authorization shall be binding upon all successor
Certificateholders.

                                      -146-

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

     SECTION 10.01. REMIC Administration.

     (a) The Trustee shall elect to treat each Trust REMIC as a REMIC under the
Code and, if necessary, under applicable state law. Each such election will be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return or any appropriate state return for the taxable year ending on the last
day of the calendar year in which the Certificates are issued. For the purposes
of the REMIC election in respect of REMIC I, the REMIC I Regular Interests shall
be designated as the Regular Interests in REMIC I and the Class R-I Interest
shall be designated as the Residual Interest in REMIC I. The REMIC II Regular
Interests shall be designated as the Regular Interests in REMIC II and the Class
R-II Interest shall be designated as the Residual Interest in REMIC II. The
Class A Certificates, the Class A-IO Certificates, the Mezzanine Certificates,
the Class CE Interest and the Class P Interest shall be designated as the
Regular Interests in REMIC III and the Class R-III Interest shall be designated
as the Residual Interest in REMIC III. The CE Certificates shall be designated
as the Regular Interests in REMIC IV and the Class R-IV Interest shall be
designated as the Residual Interest in REMIC IV. The P Certificates shall be
designated as the Regular Interests in REMIC V and the Class R-V Interest shall
be designated as the Residual Interest in REMIC V. The Trustee shall not permit
the creation of any "interests" in any Trust REMIC (within the meaning of
Section 860G of the Code) other than the REMIC I Regular Interests, the REMIC II
Regular Interests, the Class CE Interest, the Class P Interest and the interests
represented by the Certificates.

     (b) The Closing Date is hereby designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

     (c) The Trustee shall be reimbursed for any and all expenses relating to
any tax audit of the Trust Fund (including, but not limited to, any professional
fees or any administrative or judicial proceedings with respect to any Trust
REMIC that involve the Internal Revenue Service or state tax authorities),
including the expense of obtaining any tax related Opinion of Counsel except as
specified herein. The Trustee, as agent for each Trust REMIC's tax matters
person shall (i) act on behalf of the Trust Fund in relation to any tax matter
or controversy involving any Trust REMIC and (ii) represent the Trust Fund in
any administrative or judicial proceeding relating to an examination or audit by
any governmental taxing authority with respect thereto. The holder of the
largest Percentage Interest of the Residual Certificates shall be designated, in
the manner provided under Treasury regulations section 1.860F-4(d) and Treasury
regulations section 301.6231(a)(7)-1, as the tax matters person of the related
REMIC created hereunder. By their acceptance thereof, the holder of the largest
Percentage Interest of the Residual Certificates hereby agrees to irrevocably
appoint the Trustee or an Affiliate as its agent to perform all of the duties of
the tax matters person for the Trust Fund.

     (d) The Trustee shall prepare, sign and file all of the Tax Returns
(including Form 8811, which must be filed within 30 days following the Closing
Date) in respect of each Trust

                                      -147-

<PAGE>

REMIC. The expenses of preparing and filing such returns shall be borne by the
Trustee without any right of reimbursement therefor.

     (e) The Trustee shall perform on behalf of each Trust REMIC all reporting
and other tax compliance duties that are the responsibility of such REMIC under
the Code, the REMIC Provisions or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, as required by the Code, the REMIC Provisions or other such compliance
guidance, the Trustee shall provide (i) to any Transferor of a Residual
Certificate such information as is necessary for the application of any tax
relating to the transfer of a Residual Certificate to any Person who is not a
Permitted Transferee, (ii) to the Certificateholders such information or reports
as are required by the Code or the REMIC Provisions including reports relating
to interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of each Trust REMIC. The Depositor shall provide or cause to be
provided to the Trustee, within ten (10) days after the Closing Date, all
information or data that the Trustee reasonably determines to be relevant for
tax purposes as to the valuations and issue prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flow of the Certificates.

     (f) The Trustee shall take such action and shall cause each Trust REMIC to
take such action as shall be necessary to create or maintain the status thereof
as a REMIC under the REMIC Provisions. The Trustee shall not take any action or
cause the Trust Fund to take any action or fail to take (or fail to cause to be
taken) any action that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of any Trust REMIC as a REMIC or
(ii) result in the imposition of a tax upon the Trust Fund (including but not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions to a REMIC set forth in Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee
and the NIMS Insurer has received an Opinion of Counsel, addressed to the
Trustee (at the expense of the party seeking to take such action but in no event
at the expense of the Trustee) to the effect that the contemplated action will
not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor shall the Servicer take or fail to take any action
(whether or not authorized hereunder) as to which the Trustee and the NIMS
Insurer has advised it in writing that it has received an Opinion of Counsel to
the effect that an Adverse REMIC Event could occur with respect to such action;
provided that the Servicer may conclusively rely on such Opinion of Counsel and
shall incur no liability for its action or failure to act in accordance with
such Opinion of Counsel. In addition, prior to taking any action with respect to
any Trust REMIC or the respective assets of each, or causing any Trust REMIC to
take any action, which is not contemplated under the terms of this Agreement,
the Servicer will consult with the Trustee, the NIMS Insurer or its designee, in
writing, with respect to whether such action could cause an Adverse REMIC Event
to occur with respect to any Trust REMIC and the Servicer shall not take any
such action or cause any Trust REMIC to take any such action as to which the
Trustee or the NIMS Insurer has advised it in writing that an Adverse REMIC
Event could occur; provided that the Servicer may conclusively rely on such
writing and shall incur no liability for its action or failure to act in
accordance with such writing. The Trustee or the NIMS Insurer may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee. At

                                      -148-

<PAGE>

all times as may be required by the Code, the Trustee will ensure that
substantially all of the assets of REMIC I will consist of "qualified mortgages"
as defined in Section 860G(a)(3) of the Code and "permitted investments" as
defined in Section 860G(a)(5) of the Code, to the extent such obligations are
within the Trustee's control and not otherwise inconsistent with the terms of
this Agreement.

     (g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Servicer pursuant to Section 10.03
hereof, if such tax arises out of or results from a breach by the Servicer of
any of its obligations under Article III or this Article X, or (iii) against
amounts on deposit in the Distribution Account and shall be paid by withdrawal
therefrom.

     (h) On or before April 15th of each calendar year, commencing April 15,
2005, the Trustee shall deliver to each Rating Agency and the NIMS Insurer an
Officer's Certificate of the Trustee stating the Trustee's compliance with this
Article X (without regard to any action taken by any party other than the
Trustee).

     (i) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to each Trust REMIC on a calendar year and on an accrual
basis.

     (j) Following the Startup Day, neither the Servicer nor the Trustee shall
accept any contributions of assets to any Trust REMIC other than in connection
with any Qualified Substitute Mortgage Loan delivered in accordance with Section
2.03 unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund will not cause the related REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject such REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

     (k) Neither the Trustee nor the Servicer shall enter into any arrangement
by which any Trust REMIC will receive a fee or other compensation for services
nor permit either REMIC to receive any income from assets other than "qualified
mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.

     SECTION 10.02. Prohibited Transactions and Activities.

     None of the Depositor, the Servicer or the Trustee shall sell, dispose of
or substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage Loan, including but not limited to, the acquisition or
sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of REMIC I, (iii) the termination of REMIC I pursuant to Article IX
of this Agreement, (iv) a substitution pursuant to Article II of this Agreement
or (v) a purchase of Mortgage Loans pursuant to Article II or III of this
Agreement), nor acquire any assets for any

                                      -149-

<PAGE>

Trust REMIC (other than REO Property acquired in respect of a defaulted Mortgage
Loan), nor sell or dispose of any investments in the Collection Account or the
Distribution Account for gain, nor accept any contributions to any Trust REMIC
after the Closing Date (other than a Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03), unless it has received an Opinion of
Counsel, addressed to the Trustee and the NIMS Insurer (at the expense of the
party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust REMIC
to be subject to a tax on "prohibited transactions" or "contributions" pursuant
to the REMIC Provisions.

     SECTION 10.03. Servicer and Trustee Indemnification.

     (a) In the event that any Trust REMIC 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 (i) the negligent performance by the Trustee of its duties and obligations
set forth herein or (ii) any state, local or franchise taxes imposed upon the
Trust Fund as a result of the location of the Trustee or any co-trustee, the
Trustee shall indemnify the NIMS Insurer, the Servicer and the Trust Fund
against any and all Losses resulting from such negligence, including, without
limitation, any reasonable attorneys' fees imposed on or incurred as a result of
a breach of the Trustee's or any co-trustee's covenants; 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 such Residual
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual 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 Residual 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 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).

     (b) In the event that any Trust REMIC 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 (i) the negligent performance by the Servicer of its duties and obligations
set forth herein or (ii) any state, local or franchise taxes imposed upon the
Trust Fund as a result of the location of the Servicer or any sub-servicer, the
Servicer shall indemnify the NIMS Insurer, the Trustee and the Trust Fund
against any and all losses, claims, damages, liabilities or expenses ("Losses")
resulting from such negligence, including, without limitation, any reasonable
attorneys' fees imposed on or incurred as a result of a breach of the Servicer's
or any sub- servicer's covenants; 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 such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual 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 Residual Certificate now

                                      -150-

<PAGE>

or 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 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).

                                      -150-

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

     SECTION 11.01. Amendment.

     This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the NIMS Insurer and without the
consent of any of the Certificateholders, (i) to cure any ambiguity or defect,
(ii) to correct, modify or supplement any provisions herein (including to give
effect to the expectations of Certificateholders), or (iii) to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement, provided
that such action shall not adversely affect in any material respect the
interests of any Certificateholder as evidenced by either (i) an Opinion of
Counsel delivered to the Servicer, the Trustee and the NIMS Insurer or (ii)
confirmation from the Rating Agencies, delivered to the Servicer, the Trustee
and the NIMS Insurer, that such amendment will not result in the reduction or
withdrawal of the rating of any outstanding Class of Certificates. No amendment
shall be deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no Opinion of Counsel
shall be required to address the effect of any such amendment on any such
consenting Certificateholder.

     This Agreement may also be amended from time to time by the Depositor, the
Servicer, the NIMS Insurer and the Trustee with the consent of the NIMS Insurer
and the Holders of Certificates entitled to at least 66% 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 received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates (as evidenced by either (i) an Opinion of Counsel
delivered to the Trustee and the NIMS Insurer or (ii) confirmation from the
Rating Agencies, delivered to the Servicer, the Trustee and the NIMS Insurer,
that such action will not result in the reduction or withdrawal of the rating of
any outstanding Class of Certificates) in a manner, other than as described in
(i), or (iii) modify the consents required by the immediately preceding clauses
(i) and (ii) without the consent of the Holders of all Certificates then
outstanding. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.01,
Certificates registered in the name of the Depositor or the Servicer or any
Affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates.

     Notwithstanding any contrary provision of this Agreement, neither the
Trustee nor the NIMS Insurer shall consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel satisfactory to the
NIMS Insurer to the effect that such amendment will not result in the imposition
of any tax on any Trust REMIC pursuant to the REMIC Provisions or cause any
Trust REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.

                                      -152-

<PAGE>

     Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder and make available to
each Certificateholder and the NIMS Insurer.

     It shall not be necessary for the consent of Certificateholders under this
Section 11.01 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.

     The cost of any Opinion of Counsel to be delivered pursuant to this Section
11.01 shall be borne by the Person seeking the related amendment, but in no
event shall such Opinion of Counsel be an expense of the Trustee.

     The Trustee may, but shall not be obligated to enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise.

     SECTION 11.02. Recordation of Agreement; Counterparts.

     To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Certificateholders, but only upon direction of
the Trustee accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.

     For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.

     SECTION 11.03. Limitation on Rights of Certificateholders.

     The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

     No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of any 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

                                      -153-

<PAGE>

third person 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 of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 15 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 is
understood and intended, and 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 whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

     SECTION 11.04. Governing Law.

     This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.

     SECTION 11.05. Notices.

     All directions, demands and notices hereunder shall be in writing and shall
be deemed to have been duly given when received if personally delivered at or
mailed by first class mail, postage prepaid, or by express delivery service or
delivered in any other manner specified herein, to (a) in the case of the
Depositor, 1285 Avenue of the Americas, New York, New York 10019, Attention:
Glenn McIntyre (telecopy number (212) 713-2080), or such other address or
telecopy number as may hereafter be furnished to the Servicer, the NIMS Insurer,
if any, and the Trustee in writing by the Depositor, (b) in the case of the
Servicer, HomEq Servicing Corporation, 4837 Watt Avenue, North Highlands,
California 95660-5101, Attention: Portfolio Management, Facsimile No. (919)
339-6995 with a copy to HomEq Servicing Corporation, 1620 East Roseville
Parkway, Suite 210, 2nd Floor, Roseville, California 95661, Attention: Legal
Department, Facsimile No. (919) 339- 6995, or such other address or telecopy
number as may hereafter be furnished to the Depositor and the Trustee in writing
by the Servicer, (c) in the case of the Trustee, 60 Livingston Avenue, St. Paul,
Minnesota 55107, Attention: Structured Finance/MASTR 2004-FRE1 (telecopy number
(651) 495- 8090), or such other address or telecopy number as may hereafter be
furnished to the Depositor, the NIMS Insurer, the Trustee and the Servicer in
writing by the Trustee, or such other address or telecopy number as may
hereafter be furnished to the Servicer, the NIMS Insurer and the Depositor

                                      -154-

<PAGE>

in writing by the Trustee and (d) in the case of the NIMS Insurer, if any, as
applicable, (i) Radian Insurance Inc., 1601 Market Street, Philadelphia,
Pennsylvania 19103, Attention: General Counsel and/or (ii) Financial Security
Assurance Inc., 350 Park Avenue, New York, New York 10022, Attn: Transaction
Oversight, or such other address or telecopy number as may hereafter be
furnished to the Servicer, the Depositor and the Trustee in writing by the NIMS
Insurer. Any notice required or permitted to be given to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above.

     SECTION 11.06. 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.

     SECTION 11.07. Notice to Rating Agencies and the NIMS Insurer.

     The Trustee shall use its best efforts promptly to provide notice to the
Rating Agencies and the NIMS Insurer with respect to each of the following of
which it has actual knowledge:

          1. Any material change or amendment to this Agreement;

          2. The occurrence of any Servicer Event of Default that has not been
     cured or waived;

          3. The resignation or termination of the Servicer or the Trustee;

          4. The repurchase or substitution of Mortgage Loans pursuant to or as
     contemplated by Section 2.03;

          5. The final payment to the Holders of any Class of Certificates;

          6. Any change in the location of the Collection Account or the
     Distribution Account;

          7. Any event that would result in the inability of the Trustee to make
     advances regarding delinquent Mortgage Loans; and

          8. The filing of any claim under any Servicer's blanket bond and
     errors and omissions insurance policy required by Section 3.14 or the
     cancellation or material modification of coverage under any such
     instrument.

                                      -155-

<PAGE>

     In addition, the Trustee shall promptly make available to each Rating
Agency and the NIMS Insurer copies of each report to Certificateholders
described in Section 4.02 and copies of the following:

          1. Each annual statement as to compliance described in Section 3.20;
     and

          2. Each annual independent public accountants' servicing report
     described in Section 3.21.

     Any such notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service to Moody's
Investors Service Inc., 99 Church Street, New York, New York 10004, Standard &
Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York 10007 and Fitch Ratings, One State Street Plaza, New
York, New York 10004 or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.

     SECTION 11.08. Article and Section References.

     All article and section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.

     SECTION 11.09. Grant of Security Interest.

     It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Depositor to the Trustee, be, and be construed as, a sale
of the Mortgage Loans by the Depositor and not a pledge of the Mortgage Loans to
secure a debt or other obligation of the Depositor. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage Loans are
held to be property of the Depositor, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor
and (b)(1) this Agreement shall also be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York; (2) the conveyance provided for in
Section 2.01 hereof shall be deemed to be a grant by the Depositor to the
Trustee of a security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans and all amounts payable to the holders of
the Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts, other
than investment earnings, from time to time held or invested in the Collection
Account and the Distribution Account, whether in the form of cash, instruments,
securities or other property; (3) the obligations secured by such security
agreement shall be deemed to be all of the Depositor's obligations under this
Agreement, including the obligation to provide to the Certificateholders the
benefits of this Agreement relating to the Mortgage Loans and the Trust Fund;
and (4) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such

                                      -156-

<PAGE>

security interest under applicable law. Accordingly, the Depositor hereby grants
to the Trustee a security interest in the Mortgage Loans and all other property
described in clause (2) of the preceding sentence, for the purpose of securing
to the Trustee the performance by the Depositor of the obligations described in
clause (3) of the preceding sentence. Notwithstanding the foregoing, the parties
hereto intend the conveyance pursuant to Section 2.01 to be a true, absolute and
unconditional sale of the Mortgage Loans and assets constituting the Trust Fund
by the Depositor to the Trustee.

     SECTION 11.10. Third Party Rights.

     The NIMs 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.

                                      -157-

<PAGE>

     IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, in each case as of the day and year first above written.

                                    MORTGAGE ASSET SECURITIZATION
                                    TRANSACTIONS, INC.,
                                    as Depositor

                                    By:      /s/ Jeffrey Lown
                                        ----------------------------------------
                                    Name:    Jeffrey Lown
                                    Title:   Executive Director

                                    By:      /s/ Glenn McIntyre
                                        ----------------------------------------
                                    Name:    Glenn McIntyre
                                    Title:   Director

                                    HOMEQ SERVICING CORPORATION
                                    as Servicer

                                    By:      /s/ Arthur Lyon
                                        ----------------------------------------
                                    Name: Arthur Lyon
                                    Title:

                                    U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                    By:      /s/ Shannon Rantz
                                        ----------------------------------------
                                    Name: Shannon Rantz
                                    Title: Vice President

                                      -158-

<PAGE>

For purposes of Sections 6.08, 6.09 and 6.10:

THE MURRAYHILL COMPANY

By:__/s/ Kevin J. Kanouff__________
Name: Kevin J. Kanouff
Title: President and General Counsel

                                      -159-

<PAGE>

STATE OF NEW YORK                   )
                                    ) ss.:
COUNTY OF NEW YORK                          )

     On the th day of July 2004, before me, a notary public in and for said
State, personally appeared ________________, known to me to be a
________________ of Mortgage Asset Securitization Transactions, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                        --------------------
                                           Notary Public

[Notarial Seal]

                                      -160-

<PAGE>

STATE OF ______________                     )
                                            ) ss.:
COUNTY OF ____________                      )

     On the ____ day of July 2004, before me, a notary public in and for said
State, personally appeared _____________________, known to me to be
__________________ of HomEq Servicing Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                          -------------------------
                                               Notary Public

[Notarial Seal]

                                      -161-

<PAGE>

STATE OF MINNESOTA                  )
                                    )ss.:
COUNTY OF RAMSEY                    )

     On the ____ day of July 2004, before me, a notary public in and for said
State, personally appeared ______________, known to me to be a ____________ of
U.S. Bank National Association, one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                          ------------------------
                                              Notary Public

[Notarial Seal]

                                      -162-

<PAGE>

                                   EXHIBIT A-1

                          FORM OF CLASS A-1 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

<TABLE>
<CAPTION>
<S>                                                       <C>
Series: 2004-FRE1                                          Aggregate Certificate Principal Balance of the
                                                           Class A-1 Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $276,076,000.00

Cut-off Date and date of Pooling and                       Denomination: $276,076,000.00
Servicing Agreement: July 1, 2004
                                                           Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                           Trustee: U.S. Bank National Association
No. 1
                                                           Issue Date: July 29, 2004

                                                           CUSIP: 57643L DR 4
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                      A-1-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class A-1 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class A-1 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class A-1 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class A-1 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
A-1 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-1-2

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

                                      A-1-3

<PAGE>

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer and the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-1-4

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:________________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-1-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-1-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                      A-1-7

<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS A-2 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

<TABLE>
<CAPTION>

<S>                                               <C>
Series:  2004-FRE1                                 Aggregate Certificate Principal Balance of the
                                                   Class A-2 Certificates as of the Issue Date:
Pass-Through Rate: Variable                        $122,267,000.00

Cut-off Date and date of Pooling and               Denomination: $122,267,000.00
Servicing Agreement: July 1, 2004
                                                   Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                   Trustee: U.S. Bank National Association
No. 1
                                                   Issue Date: July 29, 2004

                                                   CUSIP: 57643L DS 2
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                      A-1-8

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class A-2 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class A-2 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class A-2 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class A-2 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
A-2 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-1-9

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer

                                     A-1-10

<PAGE>

or the Trustee may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and none of the Depositor, the Servicer,
the Trustee nor any such agent shall be affected by notice to the contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-1-11

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July ___, 2004                       U.S. BANK NATIONAL ASSOCIATION
                                            not in its individual capacity, but
                                            solely as Trustee for the MASTR
                                            Asset Backed Securities Trust
                                            2004-FREI

                                             By:________________________________
                                                   Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-1-12

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-1-13

<PAGE>

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-1-14

<PAGE>

                                   EXHIBIT A-3

                         FORM OF CLASS A-IO CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

          THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
          UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
          ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
          EXCEPT TO A PERSON THAT IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
          MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
          ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
          TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, IN A TRANSACTION
          EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
          WHICH THE TRANSFEREE MAKES OR IS DEEMED TO MAKE CERTAIN
          REPRESENTATIONS AND UNDERTAKINGS SET FORTH IN THE AGREEMENT AND IN
          ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
          UNITED STATES.

                                     A-1-15

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>

Series: 2004-FRE1                                          Aggregate Notional Amount of the Class A-
                                                           IO Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $509,064,639.00

Cut-off Date and date of Pooling and                       Denomination: $509,064,639.00
Servicing Agreement: July 1, 2004
                                                           Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                           Trustee: U.S. Bank National Association
No. 1
                                                           Issue Date: July 29, 2004

                                                           CUSIP: 57643L DT 0

</TABLE>

                                     A-1-16

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Notional Amount of the Class A-IO Certificates as of the Issue Date)
in that certain beneficial ownership interest evidenced by all the Class A-IO
Certificates in a REMIC created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among Mortgage Asset Securitization
Transactions, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class A-IO Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the greater of (i)

                                     A-1-17

<PAGE>

0.00% and (ii) 2.50% minus One-Month LIBOR.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Notional
Amount of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

     No transfer of this Certificate shall be made unless the transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer

                                     A-1-18

<PAGE>

of this Certificate is to be made without registration or qualification, the
Trustee and the Certificate Registrar shall require receipt of written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder's prospective transferee, substantially in the
forms attached to the Agreement as Exhibit F-1. None of the Depositor, the
Certificate Registrar or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer and the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-1-19

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-1-20

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                     A-1-21

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-1-22

<PAGE>

                                   EXHIBIT A-4

                          FORM OF CLASS M-1 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES AND THE CLASS A-IO CERTIFICATES TO THE EXTENT
          DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-2-1

<PAGE>

<TABLE>
<CAPTION>

<S>                                             <C>
Series:  2004-FRE1                               Aggregate Certificate Principal Balance of the
                                                 Class M-1 Certificates as of the Issue Date:
Pass-Through Rate: Variable                      $19,854,000.00

Cut-off Date and date of Pooling and             Denomination: $19,854,000.00
Servicing Agreement: July 1, 2004
                                                 Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                 Trustee: U.S. Bank National Association
No. 1
                                                 Issue Date: July 29, 2004

                                                 CUSIP: 57643L DU 7
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                      A-2-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-1 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-1 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-1 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-1 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-1 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-2-3

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                      A-2-4

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-2-5

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004
                                          U.S. BANK NATIONAL ASSOCIATION,
                                          not in its individual capacity,
                                          but solely as Trustee for the
                                          MASTR Asset Backed ecurities Trust
                                          2004-FRE1

                                          By:________________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-2-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-2-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                      A-2-8

<PAGE>

                                   EXHIBIT A-5

                          FORM OF CLASS M-2 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATE AND THE CLASS M-1
          CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
          AGREEMENT REFERRED TO HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-3-1

<PAGE>

<TABLE>
<CAPTION>

<S>                                            <C>
Series:  2004-FRE1                              Aggregate Certificate Principal Balance of the
                                                Class M-2 Certificates as of the Issue Date:
Pass-Through Rate: Variable                     $13,999,000.00

Cut-off Date and date of Pooling and            Denomination: $13,999,000.00
Servicing Agreement: July 1, 2004
                                                Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                Trustee: U.S. Bank National Association
No. 1
                                                Issue Date: July 29, 2004

                                                CUSIP: 57643L DW 3
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                      A-3-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-2 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-2 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-2 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-2 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-2 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-3-3

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                      A-3-4

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-3-5

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004
                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:_________________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-3-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-3-7

<PAGE>

                           DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                      A-3-8

<PAGE>

                                   EXHIBIT A-6

                          FORM OF CLASS M-3 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
          CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE EXTENT DESCRIBED IN
          THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-3-9

<PAGE>

<TABLE>
<CAPTION>

<S>                                              <C>
Series:  2004-FRE1                                Aggregate Certificate Principal Balance of the
                                                  Class M-3 Certificates as of the Issue Date:
Pass-Through Rate: Variable                       $11,454,000.00

Cut-off Date and date of Pooling and              Denomination: $11,454,000.00
Servicing Agreement: July 1, 2004
                                                  Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                  Trustee: U.S. Bank National Association
No. 1
                                                  Issue Date: July 29, 2004

                                                  CUSIP: 57643L DW 3
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                     A-3-10

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one-to four-family,
fixed-rate and adjustable-rate, first and second lien mortgage loans (the
"Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-3 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-3 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-3 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-3 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-3 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                     A-3-11

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                     A-3-12

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-3-13

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004
                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:_________________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-3-14

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-3-15

<PAGE>

                           DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-3-16

<PAGE>

                                   EXHIBIT A-7

                          FORM OF CLASS M-4 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
          CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS M-3
          CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
          AGREEMENT REFERRED TO HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-5-1

<PAGE>

<TABLE>
<CAPTION>

<S>                                            <C>
Series:  2004-FRE1                               Aggregate Certificate Principal Balance of the
                                                 Class M-4 Certificates as of the Issue Date:
Pass-Through Rate: Variable                      $10,181,000.00

Cut-off Date and date of Pooling and             Denomination: $10,181,000.00
Servicing Agreement: July 1, 2004
                                                 Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                 Trustee: U.S. Bank National Association
No. 1
                                                 Issue Date: July 29, 2004

                                                 CUSIP: 57643L DX 1
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                      A-5-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-4 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-4 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-4 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-4 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-4 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-5-3

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                      A-5-4

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                      A-5-5

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:_________________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-5-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-5-7

<PAGE>

                           DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                      A-5-8

<PAGE>

                                   EXHIBIT A-8

                          FORM OF CLASS M-5 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
          CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES
          AND THE CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING
          AND SERVICING AGREEMENT REFERRED TO HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-5-9

<PAGE>

<TABLE>
<CAPTION>

<S>                                             <C>
Series:  2004-FRE1                               Aggregate Certificate Principal Balance of the
                                                 Class M-5 Certificates as of the Issue Date:
Pass-Through Rate: Variable                      $8,909,000.00

Cut-off Date and date of Pooling and             Denomination: $8,909,000.00
Servicing Agreement: July 1, 2004
                                                 Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                 Trustee: U.S. Bank National Association
No. 1
                                                 Issue Date: July 29, 2004

                                                 CUSIP: 57643L DY 9
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                     A-5-10

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-5 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-5 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-5 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-5 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-5 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                     A-5-11

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                     A-5-12

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-5-13

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:_________________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-5-14

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-5-15

<PAGE>

                           DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-16

<PAGE>

                                   EXHIBIT A-9

                          FORM OF CLASS M-6 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES, THE CLASS A-IO 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 TO THE
          EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
          HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                     A-5-17

<PAGE>

<TABLE>
<CAPTION>

<S>                                             <C>
Series:  2004-FRE1                               Aggregate Certificate Principal Balance of the
                                                 Class M-6 Certificates as of the Issue Date:
Pass-Through Rate: Variable                      $8,909,000.00

Cut-off Date and date of Pooling and             Denomination: $8,909,000.00
Servicing Agreement: July 1, 2004
                                                 Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                 Trustee: U.S. Bank National Association
No. 1
                                                 Issue Date: July 29, 2004

                                                 CUSIP: 57643L DZ 6
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                     A-5-18

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-6 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-6 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-6 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-6 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-6 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                     A-5-19

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                     A-5-20

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-5-21

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004
                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:_________________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-5-22

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-5-23

<PAGE>

                           DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-24

<PAGE>

                                  EXHIBIT A-10

                          FORM OF CLASS M-7 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
          CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES,
          THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES AND THE CLASS
          M-6 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
          AGREEMENT REFERRED TO HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                     A-5-25

<PAGE>

<TABLE>
<CAPTION>

<S>                                             <C>
Series:  2004-FRE1                               Aggregate Certificate Principal Balance of the
                                                 Class M-7 Certificates as of the Issue Date:
Pass-Through Rate: Variable                      $7,636,000.00

Cut-off Date and date of Pooling and             Denomination: $7,636,000.00
Servicing Agreement: July 1, 2004
                                                 Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                 Trustee: U.S. Bank National Association
No. 1
                                                 Issue Date: July 29, 2004

                                                 CUSIP: 57643L EA 0
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                     A-5-26

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-7 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-7 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-7 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-7 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-7 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                     A-5-27

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                     A-5-28

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-5-29

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004
                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:_________________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-5-30

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-5-31

<PAGE>

                           DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-31

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
___________________________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number
______________________________, or, if mailed by check,
to_______________________________________________________________
______________________________________________________________________________.
Applicable statements should be mailed to_____________________________________
______________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-32

<PAGE>

                                  EXHIBIT A-11

                          FORM OF CLASS M-8 CERTIFICATE

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
          OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
          THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
          PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
          REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
          SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
          DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
          BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
          HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
          "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
          THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
          THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

          THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
          CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
          CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES,
          THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6
          CERTIFICATES AND THE CLASS M-7 CERTIFICATES TO THE EXTENT DESCRIBED IN
          THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

          NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
          RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
          SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED
          EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                     A-5-33

<PAGE>

<TABLE>
<CAPTION>

<S>                                             <C>
Series:  2004-FRE1                               Aggregate Certificate Principal Balance of the
                                                 Class M-8 Certificates as of the Issue Date:
Pass-Through Rate: Variable                      $7,636,000.00

Cut-off Date and date of Pooling and             Denomination: $7,636,000.00
Servicing Agreement: July 1, 2004
                                                 Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                 Trustee: U.S. Bank National Association
No. 1
                                                 Issue Date: July 29, 2004

                                                 CUSIP: 57643L EB 8
</TABLE>

          DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
          THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
          THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY
          BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
          CERTIFICATE.

                                     A-5-34

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

          THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
          MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
          TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
          CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
          AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-8 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-8 Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-8 Certificates on such Distribution Date
pursuant to the Agreement.

     All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of Class M-8 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-8 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                     A-5-35

<PAGE>

     The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

     This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Distribution Account may be made from time to time for purposes other than
distributions to Certificateholders, such purposes including reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer and the Trustee
with the consent of the Holders of Certificates entitled to at least 66% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 5.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange of Certificates,
but the Trustee may require

                                     A-5-36

<PAGE>

payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     The Depositor, the Servicer, the Trustee and any agent of the Depositor,
the Servicer or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
the Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall terminate upon payment to the Certificateholders of all amounts held by
the Trustee and required to be paid to them pursuant to the Agreement following
the earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan and REO Property remaining in REMIC I
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all of the Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and the Trustee assumes no responsibility for their correctness.

     Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

                                     A-5-37

<PAGE>

     IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004
                                           U.S. BANK NATIONAL ASSOCIATION,
                                           not in its individual capacity, but
                                           solely as Trustee for the MASTR
                                           Asset Backed Securities Trust
                                           2004-FRE1

                                           By:_________________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                             By:________________________________
                                                   Authorized Signatory

                                      A-5-38

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-5-39

<PAGE>

                           DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-40

<PAGE>

                                  EXHIBIT A-12
                                  ------------

                          FORM OF CLASS M-9 CERTIFICATE

      UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
       OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
       THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
      PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
          & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
       REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
        SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
         OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
            OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
          REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

       SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
       "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
              AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
               860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
                            AS AMENDED (THE "CODE").

       THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
       CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
      CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES,
      THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6
     CERTIFICATES, THE CLASS M-7 CERTIFICATES AND THE CLASS M-8 CERTIFICATES
         TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
                               REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
              OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR THE CODE
           WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
                                DESCRIBED HEREIN.

                                     A-5-41

<PAGE>

<TABLE>
<CAPTION>

<S>                                                        <C>
Series:  2004-FRE1                                         Aggregate Certificate Principal Balance of the
                                                           Class M-9 Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $6,363,000.00

Cut-off Date and date of Pooling and                       Denomination: $6,363,000.00
Servicing Agreement: July 1, 2004
                                                           Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                           Trustee: U.S. Bank National Association
No. 1
                                                           Issue Date: July 29, 2004

                                                           CUSIP: 57643L EC 6
</TABLE>

             DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
               BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS
                                SET FORTH HEREIN.
        ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
           AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
                        DENOMINATION OF THIS CERTIFICATE.

                                     A-5-42

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

       evidencing a beneficial ownership interest in a portion of a Trust
     Fund (the "Trust Fund") consisting primarily of a pool of conventional
              one- to four-family, fixed-rate and adjustable-rate,
           first and second lien mortgage loans (the "Mortgage Loans")
                               formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

       THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
       MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
         NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
                    OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-9 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-9 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Mortgage
Asset Securitization Transactions, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-9 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of Class M-9 Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
M-9 Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with

                                     A-5-43

<PAGE>

respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account may be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No

                                     A-5-44

<PAGE>

service charge will be made for any such registration of transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.

                  The Depositor, the Servicer, the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Servicer, the Trustee nor any such agent shall be affected by
notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all of the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-5-45

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     not in its individual capacity, but
                                     solely as Trustee for the MASTR
                                     Asset Backed Securities Trust
                                     2004-FRE1

                                     By:_________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     as Trustee

                                       By:_________________________________
                                             Authorized Signatory

                                     A-5-46

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                     A-5-47

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds
to ___________________________________________________________________________
____________________________________________________________ for the account of
_______________________________, account number ______________________________,
or, if mailed by check,
to____________________________________________________________________________
______________________________________________________________________________
.. Applicable statements should be mailed
to____________________________________________________________________________
______________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-48

<PAGE>

                                  EXHIBIT A-13
                                  ------------

                         FORM OF CLASS M-10 CERTIFICATE

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
         TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
         PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
         CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
         REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
         OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
         ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
         TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
         & CO., HAS AN INTEREST HEREIN.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
         CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
         CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES,
         THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6
         CERTIFICATES, THE CLASS M-7 CERTIFICATES, THE CLASS M-8 CERTIFICATES
         AND THE CLASS M-9 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING
         AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                     A-5-49

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series:  2004-FRE1                                         Aggregate Certificate Principal Balance of the
                                                           Class M-10 Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $5,091,000.00

Cut-off Date and date of Pooling and                       Denomination: $5,091,000.00
Servicing Agreement: July 1, 2004
                                                           Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                           Trustee: U.S. Bank National Association
No. 1
                                                           Issue Date: July 29, 2004

                                                           CUSIP: 57643L ED 4
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-5-50

<PAGE>

MORTGAGE PASS-THROUGH CERTIFICATE evidencing a beneficial ownership interest in
a portion of a Trust Fund (the "Trust Fund") consisting primarily of a pool of
conventional one- to four-family, fixed-rate and adjustable-rate, first and
second lien mortgage loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

       THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
       MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
         NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
                    OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-10 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-10 Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Mortgage
Asset Securitization Transactions, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-10 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of Class M-10 Certificates the aggregate initial
Certificate Principal Balance of which is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class M-10 Certificates, or otherwise by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with

                                     A-5-51

<PAGE>

respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) the related Formula Rate for such Distribution
Date and (ii) the related Net WAC Rate for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account may be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the

                                     A-5-52

<PAGE>

same aggregate Percentage Interest, as requested by the Holder surrendering the
same. No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                  The Depositor, the Servicer, the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Servicer, the Trustee nor any such agent shall be affected by
notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all of the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-5-53

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     not in its individual capacity, but
                                     solely as Trustee for the MASTR
                                     Asset Backed Securities Trust
                                     2004-FRE1

                                     By:_________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     as Trustee

                                       By:_________________________________
                                             Authorized Signatory

                                     A-5-54

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                     A-5-55

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-56

<PAGE>

                                  EXHIBIT A-14

                          FORM OF CLASS CE CERTIFICATE

       SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
       "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
              AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
               860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986
                            AS AMENDED (THE "CODE").

       THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
       CLASS A-2 CERTIFICATES, THE CLASS A-IO CERTIFICATES, THE CLASS M-1
      CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES,
      THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6
      CERTIFICATES, THE CLASS M-7 CERTIFICATES, THE CLASS M-8 CERTIFICATES,
        THE CLASS M-9 CERTIFICATES AND THE CLASS M-10 CERTIFICATES TO THE
        EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
                                   TO HEREIN.

       THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
          AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
           PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
        TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
        UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
                THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

              NOTRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT
               PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE
               EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
                     AMENDED, OR THE CODE WILL BE REGISTERED
           EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
<TABLE>
<CAPTION>

<S>                                                       <C>
Series 2004-FRE1                                           Aggregate Certificate Principal Balance of the
                                                           Class CE Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $10,689,539.20

Cut-off Date and date of Pooling and                       Denomination: $10,689,539.20
Servicing Agreement: July 1, 2004
                                                           Servicer: HomEq Servicing Corporation
First Distribution Date: August 25, 2004
                                                           Trustee: U.S. Bank National Association
No. 1
                                                           Issue Date: July 29, 2004
Aggregate Notional Amount of the Class
CE Certificates as of the Issue Date:
$509,064,539.20
</TABLE>

             DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
               BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS
                                SET FORTH HEREIN.
        ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
           AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
                        DENOMINATION OF THIS CERTIFICATE.

                                     A-5-57

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

       evidencing a beneficial ownership interest in a portion of a Trust
     Fund (the "Trust Fund") consisting primarily of a pool of conventional
              one- to four-family, fixed-rate and adjustable-rate,
           first and second lien mortgage loans (the "Mortgage Loans")
                               formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

       THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
       MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
         NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
                    OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that [_______] is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class CE Certificates in a REMIC created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Mortgage
Asset Securitization Transactions, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of Class CE Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
CE Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                                     A-5-58

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account may be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. None of the Depositor or the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any

                                     A-5-59

<PAGE>

action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Servicer, the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Servicer, the Trustee nor any such agent shall be affected by
notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all of the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-5-60

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     not in its individual capacity, but
                                     solely as Trustee for the MASTR
                                     Asset Backed Securities Trust
                                     2004-FRE1

                                     By:_________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     as Trustee

                                       By:_________________________________
                                             Authorized Signatory

                                     A-5-61

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                     A-5-62

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                     A-5-63

<PAGE>

                                  EXHIBIT A-15

                           FORM OF CLASS P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-6-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                       <C>
Series:  2004-FRE1                                         Aggregate Certificate Principal Balance of the
                                                           Class P Certificates as of the Issue Date:
Cut-off Date and date of Pooling and                       $100.00
Servicing Agreement: July 1, 2004
                                                           Denomination: $100.00
First Distribution Date: August 25, 2004
                                                           Servicer: HomEq Servicing Corporation
No. 1
                                                           Trustee: U.S. Bank National Association

                                                           Issue Date: July 29, 2004
</TABLE>

                  DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
                  BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
                  HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
                  BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
                  ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

                                      A-6-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
         NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that [_______] is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class P Certificates in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Mortgage Asset
Securitization Transactions, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of Class P Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class P
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                                      A-6-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account may be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. None of the Depositor or the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any

                                      A-6-4

<PAGE>

action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Servicer, the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Servicer, the Trustee nor any such agent shall be affected by
notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all of the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-6-5

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     not in its individual capacity, but
                                     solely as Trustee for the MASTR
                                     Asset Backed Securities Trust
                                     2004-FRE1

                                     By:_________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     as Trustee

                                       By:_________________________________
                                             Authorized Signatory

                                      A-6-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-6-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                      A-6-8

<PAGE>

                                  EXHIBIT A-16

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED
         STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
         ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
         AND 860D OF THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
         FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
         IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH
         PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR

                                      A-7-1

<PAGE>

         (3) SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION")
         OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF
         SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND
         (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING
         TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
         THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR
         OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
         AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE
         DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
         SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
         HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
         ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
         HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
         PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
         DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
         OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>
<S>                                                        <C>
Series:  2004-FRE1                                         Aggregate Percentage Interest of the Class R
                                                           Certificates as of the Issue Date: 100.00%
Cut-off Date and date of Pooling and
Servicing Agreement: July 1, 2004                          Servicer: HomEq Servicing Corporation

First Distribution Date: August 25, 2004                   Trustee: U.S. Bank National Association

No.1                                                       Issue Date: July 29, 2004

</TABLE>

                                      A-7-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
         NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that [_______] is the registered owner of a
Percentage Interest (as specified above) in that certain beneficial ownership
interest evidenced by all the Certificates of the Class to which this
Certificate belongs created pursuant to a Pooling and Servicing Agreement, dated
as specified above (the "Agreement"), among Mortgage Asset Securitization
Transactions, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of Class R Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class R
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                                      A-7-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account may be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without

                                      A-7-4

<PAGE>

registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor and the
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  The Depositor, the Servicer, the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Servicer, the Trustee nor any such agent shall be affected by
notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-7-5

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all of the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-7-6

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     not in its individual capacity, but
                                     solely as Trustee for the MASTR
                                     Asset Backed Securities Trust
                                     2004-FRE1

                                     By:_________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     as Trustee

                                       By:_________________________________
                                             Authorized Signatory

                                      A-7-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-7-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                      A-7-1

<PAGE>

                                  EXHIBIT A-17

                          FORM OF CLASS R-X CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED
         STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
         ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
         AND 860D OF THE INTERNAL REVENUE CODE OF 1986 AS AMENDED (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
         FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
         IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH
         PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR

                                      A-7-1

<PAGE>

         (3) SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION")
         OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF
         SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND
         (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING
         TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING
         THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR
         OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
         AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE
         DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
         SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
         HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
         ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
         HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
         PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
         DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
         OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>
<S>                                                        <C>
Series:  2004-FRE1                                         Aggregate Percentage Interest of the Class R-
                                                           X Certificates as of the Issue Date: 100.00%
Cut-off Date and date of Pooling and
Servicing Agreement: July 1, 2004                          Servicer: HomEq Servicing Corporation

First Distribution Date: August 25, 2004                   Trustee: U.S. Bank National Association

No.1                                                       Issue Date: July 29, 2004
</TABLE>

                                      A-7-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate and adjustable-rate, first and second lien mortgage
loans (the "Mortgage Loans") formed and sold by

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC., THE SERVICER, THE
         TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
         NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that UBS Securities LLC is the registered owner
of a Percentage Interest (as specified above) in that certain beneficial
ownership interest evidenced by all the Certificates of the Class to which this
Certificate belongs created pursuant to a Pooling and Servicing Agreement, dated
as specified above (the "Agreement"), among Mortgage Asset Securitization
Transactions, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-X Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of Class R-X Certificates the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the Class
R-X Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-7-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account may be made from time to
time for purposes other than distributions to Certificateholders, such purposes
including reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Servicer in their respective capacities as such), together with copies of
the written certification(s) of the Holder of the Certificate desiring to effect
the transfer and/or such Holder's prospective transferee upon which such Opinion
of Counsel is based. Neither the Depositor nor the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without

                                      A-7-4

<PAGE>

registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor and the
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-X Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-X Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  The Depositor, the Servicer, the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Servicer, the Trustee nor any such agent shall be affected by
notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-7-5

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all of the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-7-6

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: July __, 2004

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     not in its individual capacity, but
                                     solely as Trustee for the MASTR
                                     Asset Backed Securities Trust
                                     2004-FRE1

                                     By:_________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     as Trustee

                                       By:_________________________________
                                             Authorized Signatory

                                      A-7-7

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties                 (Cust) (Minor) under
                                                       Uniform Gifts
JT TEN - as joint tenants with right                   to Minors Act
         if survivorship and not as                     _______________
          tenants in common                                     (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

     I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
_____________________________________________________________________________.

Dated: _________________

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          ___________________________
                                          Signature Guaranteed

                                      A-7-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to_____________________________________________________
______________________________________________________________________________ .
Applicable statements should be mailed
to______________________________________________________________________________
________________________________________________________________________________
__________________________________________.This information is provided by
___________________________________________, the assignee named above, or
________________________________________, as its agent.

                                      A-7-1

<PAGE>

                                    EXHIBIT B

                                   [Reserved]

                                       B-1

<PAGE>

                                   EXHIBIT C-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                     [Date]

<TABLE>
<CAPTION>
<S>                                                            <C>
Mortgage Asset Securitization Transactions, Inc.               U.S. Bank National Association,
1285 Avenue of the Americas                                    60 Livingston Street
New York, New York 10019                                       St. Paul, Minnesota 55107
HomEq Servicing Corporation
4837 Watt Avenue
North Highlands, California 95660
</TABLE>

          Re:  Pooling and Servicing Agreement, dated as of July1, 2004, among
               Mortgage Asset Securitization Transactions, Inc., HomEq Servicing
               Corporation and U.S. Bank National Association, Mortgage
               Pass-Through Certificates, Series 2004-FRE1

Ladies and Gentlemen:

         Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File included any of the documents specified in clause (vi) of Section
2.01 of the Pooling and Servicing Agreement.

                                      C-1-1

<PAGE>

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
This Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.

                                           U.S. BANK NATIONAL ASSOCIATION

                                           By:________________________________
                                           Name:
                                           Title:

                                      C-1-2

<PAGE>

                                   EXHIBIT C-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                  [Date]

<TABLE>
<CAPTION>

<S>                                                            <C>
Mortgage Asset Securitization Transactions, Inc.               U.S. Bank National Association,
1285 Avenue of the Americas                                    60 Livingston Street
New York, New York 10019                                       St. Paul, Minnesota 55107
HomEq Servicing Corporation
4837 Watt Avenue
North Highlands, California 95660

</TABLE>

               Re:  Pooling and Servicing Agreement, dated as of July 1, 2004,
                    among Mortgage Asset Securitization Transactions, Inc.,
                    HomEq Servicing Corporation and U.S. Bank National
                    Association, Mortgage Pass-Through Certificates, Series
                    2004-FRE1

Ladies and Gentlemen:

         In accordance with Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Trustee, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage loan paid in full
or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.

         The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File included any of the documents specified in clause (vi) of Section
2.01 of the Pooling and Servicing Agreement.

                                      C-2-1

<PAGE>

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
This Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.

                                          U.S. BANK NATIONAL ASSOCIATION

                                          By:________________________________
                                          Name:
                                          Title:

                                      C-2-2

<PAGE>

                                   EXHIBIT C-3

                        FORM OF RECEIPT OF MORTGAGE NOTE

<TABLE>
<CAPTION>

<S>                                                           <C>
Mortgage Asset Securitization Transactions, Inc.              U.S. Bank National Association,
1285 Avenue of the Americas                                   60 Livingston Street
New York, New York 10019                                      St. Paul, Minnesota 55107
HomEq Servicing Corporation
4837 Watt Avenue
North Highlands, California 95660
</TABLE>

               Re:  Pooling and Servicing Agreement, dated as of July 1, 2004,
                    among Mortgage Asset Securitization Transactions, Inc.,
                    HomEq Servicing Corporation and U.S. Bank National
                    Association, Mortgage Pass-Through Certificates, Series
                    2004-FRE1

Ladies and Gentlemen:

         Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of July 1, 2004, among Mortgage Asset Securitization Transactions, Inc. as
Depositor, HomEq Servicing Corporation as Servicer (the "Servicer") and U.S.
Bank National Association. as Trustee, we hereby acknowledge the receipt of the
original Mortgage Notes (a copy of which is attached hereto as Exhibit 1) with
any exceptions thereto listed on Exhibit 2.

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:_______________________________
Name:
Title:

                            C-2-3

<PAGE>

                                    EXHIBIT D

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>
                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (this "Agreement"),
dated July 26, 2004, between UBS Real Estate Securities Inc., a Delaware
corporation (the "Seller") and Mortgage Asset Securitization Transactions, Inc.,
a Delaware corporation (the "Purchaser").

                              PRELIMINARY STATEMENT

                  The Seller intends to sell the Mortgage Loans (as hereinafter
identified) and the Cap Contracts to the Purchaser on the terms and subject to
the conditions set forth in this Agreement. The Purchaser intends to deposit the
Mortgage Loans into a mortgage pool comprising the Trust Fund. The Trust Fund
will be evidenced by a single series of mortgage pass-through certificates
designated as Series 2004-FRE1 (the "Certificates"). The Certificates will
consist of seventeen classes of certificates. The Certificates will be issued
pursuant to a Pooling and Servicing Agreement for Series 2004-FRE1, dated as of
July 1, 2004 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, HomEq Servicing Corporation servicer (the "Servicer") and U.S. Bank
National Association as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Pooling and Servicing
Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell
and the Purchaser agrees to purchase, on or before July 29, 2004 (the "Closing
Date"), certain fixed-rate and adjustable-rate conventional, one- to
four-family, residential mortgage loans (the "Mortgage Loans"), having an
aggregate principal balance as of the close of business on July 1, 2004, (the
"Cut-off Date") of $509,064,639.20 (the "Closing Balance"), after giving effect
to all payments due on the Mortgage Loans on or before the Cut-off Date, whether
or not received including the right to any Prepayment Charges payable by the
related Mortgagors in connection with any Principal Prepayments on the Mortgage
Loans.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that shall describe such Mortgage Loans and set forth
all of the Mortgage Loans to be purchased under this Agreement, including the
Prepayment Charges. The Closing Schedule will conform to the requirements set
forth in this Agreement and to the definitions of "Mortgage Loan Schedule" and
"Prepayment Charge Schedule" under the Pooling and Servicing Agreement, it being
understood that for purposes of this Agreement, "Mortgage Loan Schedule" shall
refer to the schedule delivered by the Seller to the Purchaser. The Closing
Schedule shall be used as the Mortgage Loan Schedule and Prepayment Charge
Schedule under the Pooling and Servicing Agreement.

                                       -1-

<PAGE>

                  SECTION 3.        CONSIDERATION.

                  (a) In consideration for the Mortgage Loans to be purchased
hereunder, the Purchaser shall, as described in Section 8, pay to or upon the
order of the Seller in immediately available funds an amount (the "Mortgage Loan
Purchase Price") equal to the net sale proceeds of the Certificates.

                  (b) The Purchaser or any assignee, transferee or designee of
the Purchaser shall be entitled to all scheduled payments of principal due after
the Cut-off Date, all other payments of principal due and collected after the
Cut-off Date, and all payments of interest on the Mortgage Loans allocable to
the period after the Cut-off Date. All scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date
shall belong to the Seller.

                  (c) Pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders.

                  SECTION 4.        TRANSFER OF THE MORTGAGE LOANS.

                  (a) POSSESSION OF MORTGAGE FILES. The Seller does hereby sell,
         transfer, assign, set over and convey to the Purchaser, without
         recourse but subject to the terms of this Agreement, all of its right,
         title and interest in, to and under the Mortgage Loans, including the
         related Prepayment Charges. The contents of each Mortgage File not
         delivered to the Purchaser or to any assignee, transferee or designee
         of the Purchaser on or prior to the Closing Date are and shall be held
         in trust by the Seller for the benefit of the Purchaser or any
         assignee, transferee or designee of the Purchaser. Upon the sale of the
         Mortgage Loans, the ownership of each Mortgage Note, the related
         Mortgage and the other contents of the related Mortgage File is vested
         in the Purchaser and the ownership of all records and documents with
         respect to the related Mortgage Loan prepared by or that come into the
         possession of the Seller on or after the Closing Date shall immediately
         vest in the Purchaser and shall be delivered immediately to the
         Purchaser or as otherwise directed by the Purchaser.

                  (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller will, on
         or prior to the Closing Date, deliver or cause to be delivered to the
         Purchaser or any assignee, transferee or designee of the Purchaser each
         of the following documents for each Mortgage Loan:

                  (i) the original Mortgage Note, endorsed in blank or in the
         following form: "Pay to the order of U.S. Bank National Association, as
         Trustee under the applicable agreement, without recourse," with all
         prior and intervening endorsements showing a complete chain of
         endorsement from the Originator to the Person so endorsing to the
         Trustee;

                  (ii) the original Mortgage, noting the presence of the MIN of
         the Mortgage Loan and language indicating that the Mortgage Loan is a
         MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
         thereon, and the original recorded power of attorney, if the Mortgage
         was executed pursuant to a power of attorney, with evidence of
         recording thereon;

                                       -2-

<PAGE>

                  (iii) unless the Mortgage Loan is registered on the MERS(R)
         System, an original Assignment in blank;

                  (iv) the original recorded Assignment or Assignments showing a
         complete chain of assignment from the Originator to the Person
         assigning the Mortgage to the Trustee as contemplated by the
         immediately preceding clause (iii);

                  (v) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any; and

                  (vi) the original lender's title insurance policy, together
         with all endorsements or riders that were issued with or subsequent to
         the issuance of such policy, insuring the priority of the Mortgage as a
         first lien on the Mortgaged Property represented therein as a fee
         interest vested in the Mortgagor, or in the event such original title
         policy is unavailable, a written commitment or uniform binder or
         preliminary report of title issued by the title insurance or escrow
         company.

                  With respect to a maximum of approximately 2.0% of the
Mortgage Loans, by outstanding principal balance of the Mortgage Loans as of the
Cut-off Date, if any original Mortgage Note referred to in Section 4(b)(i) above
cannot be located, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon delivery to the Purchaser of a photocopy of such
Mortgage Note, if available, with a lost note affidavit substantially in the
form of Exhibit I to the Pooling and Servicing Agreement. If any of the original
Mortgage Notes for which a lost note affidavit was delivered to the Purchaser is
subsequently located, such original Mortgage Note shall be delivered to the
Purchaser within three Business Days.

                  Except with respect to any Mortgage Loan for which MERS is
identified on the Mortgage or on a properly recorded assignment of the Mortgage
as the mortgagee of record, the Seller promptly shall (within sixty Business
Days following the later of the Closing Date and the date of receipt by the
Seller of the recording information for a Mortgage, but in no event later than
ninety days following the Closing Date) submit or cause to be submitted for
recording, at no expense to the Purchaser, in the appropriate public office for
real property records, each Assignment referred to in Section 4(b)(iii) and (iv)
above and in connection therewith, the Seller shall execute, or cause to be
executed, each original Assignment in the following form: "U.S. Bank National
Association, as Trustee under the applicable agreement." In the event that any
such Assignment is lost or returned unrecorded because of a defect therein, the
Seller shall promptly prepare or cause to be prepared a substitute Assignment or
cure or cause to be cured such defect, as the case may be, and thereafter cause
each such Assignment to be duly recorded.

                  In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Originator further agrees that it will
cause, within 30 Business Days after the Closing Date, the MERS(R) System to
indicate that such Mortgage Loans have been assigned by the Purchaser to the
Trustee in accordance with the Pooling and Servicing Agreement for the benefit
of the Certificateholders by including in such computer files (a) the code in
the field which identifies the specific Trustee and (b) the code in the field
"Pool Field" which identifies the series of the Certificates issued in
connection with such Mortgage Loans.

                                       -3-

<PAGE>

                  If any of the documents referred to in Sections 4(b)(ii),
(iii) or (iv) above has, as of the Closing Date, been submitted for recording
but either (x) has not been returned from the applicable public recording office
or (y) has been lost or such public recording office has retained the original
of such document, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Purchaser of a copy of each
such document certified by the Originator in the case of (x) above or the
applicable public recording office in the case of (y) above to be a true and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Originator, delivery to the Purchaser promptly upon
receipt thereof of either the original or a copy of such document certified by
the applicable public recording office to be a true and complete copy of the
original. The Seller shall provide such notice to the Trustee and the Rating
Agencies if delivery pursuant to clause (2) above will be made more than 180
days after the Closing Date.

                  If the original lender's title insurance policy was not
delivered pursuant to Section 4(b)(vi) above, the Seller shall deliver or cause
to be delivered to the Purchaser, promptly after receipt thereof, the original
lender's title insurance policy. The Seller shall deliver or cause to be
delivered to the Purchaser promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.

                  Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Seller, shall be so held for the benefit of the Purchaser, its assignee,
transferee or designee.

                  (c) ACCEPTANCE OF MORTGAGE LOANS. The documents delivered
pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or any
assignee, transferee or designee of the Purchaser at any time before or after
the Closing Date (and with respect to each document permitted to be delivered
after the Closing Date, within seven days of its delivery) to ascertain that all
required documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                  (d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser has the
right to assign its interest under this Agreement, in whole or in part, to the
Trustee, as may be required to effect the purposes of the Pooling and Servicing
Agreement, without the consent of the Seller, and the assignee shall succeed to
the rights and obligations hereunder of the Purchaser. Any expense reasonably
incurred by or on behalf of the Purchaser or the Trustee in connection with
enforcing any obligations of the Seller under this Agreement will be promptly
reimbursed by the Seller.

                  (e) EXAMINATION OF MORTGAGE FILES. Prior to the Closing Date,
the Seller shall either (i) deliver in escrow to the Purchaser, or to any
assignee, transferee or designee of the Purchaser for examination, the Mortgage
File pertaining to each Mortgage Loan or (ii) make such Mortgage Files available
to the Purchaser or to any assignee, transferee or designee of the Purchaser for
examination. Such examination may be made by the Purchaser or the Trustee, and
their respective designees, upon reasonable notice to the Seller during normal
business hours before the Closing Date and within 60 days after the Closing
Date. If any such person makes such examination

                                       -4-

<PAGE>

prior to the Closing Date and identifies any Mortgage Loans that do not conform
to the requirements of the Purchaser as described in this Agreement, such
Mortgage Loans shall be deleted from the Closing Schedule. The Purchaser may, at
its option and without notice to the Seller, purchase all or part of the
Mortgage Loans without conducting any partial or complete examination. The fact
that the Purchaser or any person has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
rights of the Purchaser or any assignee, transferee or designee of the Purchaser
to demand repurchase or other relief as provided herein or under the Pooling and
Servicing Agreement.

                  SECTION 5.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF
                                 THE SELLER.

                  (a) The Seller hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:

                  (i) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware with full
corporate power and authority to conduct its business as presently conducted by
it to the extent material to the consummation of the transactions contemplated
herein. The Seller has the full corporate power and authority to own the
Mortgage Loans and to transfer and convey the Mortgage Loans to the Purchaser
and has the full corporate power and authority to execute and deliver, engage in
the transactions contemplated by, and perform and observe the terms and
conditions of this Agreement.

                  (ii) The Seller has duly authorized the execution, delivery
and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.

                  (iii) The execution, delivery and performance of this
Agreement by the Seller (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provisions of the
articles of incorporation or by-laws of the Seller, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the Seller
is a party or by which the Seller or any of its property is bound or (C) any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Seller or any of its
property and (y) does not create or impose and will not result in the creation
or imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans.

                  (iv) No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of the Seller to any
governmental authority or court is required, under federal laws or the laws of
the State of Delaware, for the execution, delivery and performance by the Seller
of, or compliance by the Seller with, this Agreement or the consummation by the
Seller of any other transaction contemplated hereby and by the Pooling and
Servicing Agreement; provided, however,

                                       -5-

<PAGE>

that the Seller makes no representation or warranty regarding federal or state
securities laws in connection with the sale or distribution of the Certificates.

                  (v) This Agreement does not contain any untrue statement of
material fact or omit to state a material fact necessary to make the statements
contained herein not misleading. The written statements, reports and other
documents prepared and furnished or to be prepared and furnished by the Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby taken in the aggregate do not contain any untrue statement of material
fact or omit to state a material fact necessary to make the statements contained
therein not misleading.

                  (vi) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder.

                  (vii) The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement.

                  (viii) Immediately prior to the sale of the Mortgage Loans to
the Purchaser as herein contemplated, the Seller will be the owner of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note,
and, upon the payment to the Seller of the Mortgage Loan Purchase Price, the
Purchaser shall have good and marketable title to each Mortgage Loan, each
related Mortgage Note and the related Mortgage Files with respect thereto free
and clear of all liens, pledges, charges, claims security interests,
participations and other encumbrances.

                  (ix) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans by the Seller or the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the Seller
of its obligations under, or validity or enforceability of, this Agreement.

                  (x) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or any similar statutory
provisions.

                  (xi) The Seller has not dealt with any broker, investment
banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans (except that an entity that previously
financed the Seller's ownership of the Mortgage Loans may be entitled to a fee
to release

                                       -6-

<PAGE>

its security interest in the Mortgage Loans, which fee shall have been paid and
which security interest shall have been released on or prior to the Closing
Date).

                  (xii) There is no litigation currently pending or, to the best
of the Seller's knowledge without independent investigation, threatened against
the Seller that would reasonably be expected to adversely affect the transfer of
the Mortgage Loans, the issuance of the Certificates or the execution, delivery,
performance or enforceability of this Agreement, or that would result in a
material adverse change in the financial condition of the Seller.

                  (xiii) As of the Closing Date, the Seller has no knowledge of
any circumstances or condition with respect to the Mortgaged Property, the
Mortgagor, the Mortgagor's credit standing or the Mortgage that can reasonably
be expected to cause the Mortgage Loan to be an unacceptable investment, cause
the Mortgage Loan to become delinquent, or adversely affect the value of the
Mortgage Loan.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
                             RELATING TO THE MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser
that as to each Mortgage Loan as of the Closing Date:

                  (1) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects;

                  (2) The Mortgage creates a (A) first lien and first priority
security interest with respect to each Mortgage Loan which is indicated to be a
first lien (as reflected on the Mortgage Loan Schedule) or (B) second lien and
second priority security interest with respect to each Mortgage Loan which is
indicated to be a second lien (as reflected on the Mortgage Loan Schedule), in
either case, in the related Mortgaged Property securing the related Mortgage
Note;

                  (3) The Seller has not advanced funds, or induced, solicited
or knowingly received any advance of funds from a party other than the owner of
the Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan; no payment with respect to
each Mortgage Loan has been past due by one calendar month during the preceding
twelve-month period;

                  (4) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

                  (5) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law. No instrument of waiver, alteration or modification has been
executed, and no Mortgagor has been released, in whole or in part, from the

                                       -7-

<PAGE>

terms thereof except in connection with an assumption agreement and which
assumption agreement is part of the Mortgage File and the terms of which are
reflected in the related Mortgage Loan Schedule; the substance of any such
waiver, alteration or modification has been approved by the issuer of any
related title insurance policy, to the extent required by the related policy.

                  (6) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set off, counterclaim or defense, including, without
limitation, the defense of usury. The operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder, shall
not render the Mortgage Note or Mortgage unenforceable, in whole or in part
(except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization and similar laws), or render the Mortgage Note or
Mortgage subject to any right of rescission, set off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set off,
counterclaim or defense has been asserted with respect thereto; and the
Mortgagor was not a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;

                  (7) All buildings or other customarily insured improvements
upon the Mortgaged Property are insured by an insurer generally acceptable to
prudent lenders in the secondary mortgage market, against loss by fire, hazards
of extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, in an amount representing coverage not less
than the lesser of (i) the maximum insurable value of the improvements securing
such Mortgage Loans, and (ii) the greater of (a) either (1) the outstanding
principal balance of the Mortgage Loan with respect to each Mortgage Loan which
is indicated to be a first lien (as reflected on the Mortgage Loan Schedule) or
(2) with respect to each second lien Mortgage Loan, the sum of the outstanding
principal balance of the first lien on such Mortgage Loan and the outstanding
principal balance of such second lien Mortgage Loan, and (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the
mortgagee from becoming a co-insurer, but in no event greater than the maximum
amount permitted under applicable law. All such standard hazard policies are in
full force and effect and on the date of origination contained a standard
mortgagee clause naming the Originator and its successors in interest and
assigns as loss payee and such clause is still in effect and all premiums due
thereon have been paid. If required by the Flood Disaster Protection Act of
1973, as amended, the Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration which policy is generally acceptable to prudent lenders in the
secondary mortgage market, in an amount not less than the amount required by the
Flood Disaster Protection Act of 1973, as amended. Such policy was issued by an
insurer generally acceptable to prudent lenders in the secondary mortgage
market. The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and upon the Mortgagor's failure
to do so, authorizes the holder of the Mortgage to maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;

                  (8) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity,
fair housing, predatory and abusive lending, or disclosure laws applicable to
the Mortgage Loan have been complied with in all material respects;

                                       -8-

<PAGE>

                  (9) The Mortgage has not been satisfied, canceled or
subordinated (other than the subordination of any second lien Mortgage Loan to
the related first lien), in whole or in part, or rescinded, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Originator has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Originator waived any default resulting from any action or inaction by the
Mortgagor;

                  (10) The related Mortgage is a valid, subsisting, enforceable
and perfected (A) first lien and first priority security interest with respect
to each Mortgage Loan which is indicated to be a first lien (as reflected on the
Mortgage Loan Schedule), or (B) second lien and second priority security
interest with respect to each Mortgage Loan which is indicated to be a second
lien Mortgage Loan (as reflected on the Mortgage Loan Schedule), in either case,
on the Mortgaged Property including all buildings on the Mortgaged Property and
all installations and mechanical, electrical, plumbing, heating and air
conditioning systems affixed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such lien is free and clear of all adverse claims, liens and
encumbrances having priority over the first lien of the Mortgage subject only to
(1) the lien of non delinquent current real property taxes and assessments not
yet due and payable, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, (3)
other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property and (4) with respect to each Mortgage Loan which is indicated
to be a second lien Mortgage Loan (as reflected on the Mortgage Loan Schedule) a
first lien on the Mortgaged Property. Any security agreement, chattel mortgage
or equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, subsisting, enforceable and perfected (A)
first lien and first priority security interest with respect to each Mortgage
Loan which is indicated to be a first lien (as reflected on the Mortgage Loan
Schedule), or (B) second lien and second priority security interest with respect
to each Mortgage Loan which is indicated to be a second lien Mortgage Loan (as
reflected on the Mortgage Loan Schedule), in either case, on the property
described therein;

                  (11) The Mortgage Note and the related Mortgage are original
and genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application affecting the rights of creditors and by general equitable
principles. All parties to the Mortgage Note and the Mortgage had the legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage. The Mortgage Note and the Mortgage have been duly and
properly executed by such parties. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of the Originator or the Mortgagor, or, on the part of any other
party involved in the

                                       -9-

<PAGE>

origination of the Mortgage Loan. The proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on site or off site
improvements and as to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid or are in the process
of being paid, and the Mortgagor is not entitled to any refund of any amounts
paid or due under the Mortgage Note or Mortgage;

                  (12) Each Mortgage Loan is covered by an ALTA lender's title
insurance policy issued by a title insurer generally acceptable to prudent
lenders in the secondary mortgage market and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in (j)(1), (2) and (3) above and, with respect to each
Mortgage Loan which is indicated to be a second lien Mortgage Loan (as reflected
on the Mortgage Loan Schedule) clause (4)) the Originator, its successors and
assigns, as to the first (or, where applicable, second) priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and, with respect
to each Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Rate and Monthly Payment.
Additionally, such policy affirmatively insures ingress and egress to and from
the Mortgaged Property. Where required by applicable state law or regulation,
the Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. The Originator, its successors and assigns,
are the sole insureds of such lender's title insurance policy, such title
insurance policy has been duly and validly endorsed to the Seller or the
assignment to the Seller of the Originator's interest therein does not require
the consent of or notification to the insurer and such lender's title insurance
policy is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Originator, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;

                  (13) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
permitting acceleration; and neither the Originator nor any prior mortgagee has
waived any default, breach, violation or event permitting acceleration. With
respect to each Mortgage Loan which is indicated to be a second lien Mortgage
Loan (as reflected on the Mortgage Loan Schedule) (i) the first lien is in full
force and effect, (ii) there is no default, breach, violation or event of
acceleration existing under such first lien mortgage or the related mortgage
note, (iii) other than with respect to a delinquent Monthly Payment of which the
Due Date was the related Cut-off Date, to the best of the Seller's knowledge, no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration thereunder, and either (A) the first lien mortgage contains a
provision which allows or (B) applicable law requires, the mortgagee under the
second lien Mortgage Loan to receive notice of, and affords such mortgagee an
opportunity to cure any default by payment in full or otherwise under the first
lien mortgage;

                                      -10-

<PAGE>

                  (14) Other than liens covered by the related title insurance
policy, there are no mechanics' or similar liens or claims which have been filed
for work, labor or material (and no rights are outstanding that under law could
give rise to such liens) affecting the related Mortgaged Property which are or
may be liens prior to or equal to the lien of the related Mortgage;

                  (15) All improvements subject to the Mortgage which were
considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit). No
improvements on adjoining properties encroach upon the Mortgaged Property except
those which are insured against by the title insurance policy referred to in
clause (m) above and all improvements on the property comply with all applicable
zoning and subdivision laws and ordinances;

                  (16) The Mortgage Loan was originated by or for the
Originator. The Mortgage Loan complies with all the terms, conditions and
requirements of the Originator's Underwriting Standards in effect at the time of
origination of such Mortgage Loan. The Mortgage Notes and Mortgages (exclusive
of any riders) are on forms generally acceptable to Fannie Mae or Freddie Mac.
The Mortgage Loan bears interest at the Mortgage Rate set forth in the related
Mortgage Loan Schedule, and Monthly Payments under the Mortgage Note are due and
payable on the first day of each month. The Mortgage contains the usual and
enforceable provisions of the originator at the time of origination for the
acceleration of the payment of the unpaid principal amount of the Mortgage Loan
if the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;

                  (17) The Mortgaged Property is not subject to any material
damage by waste, fire, earthquake, windstorm, flood or other casualty. At
origination of the Mortgage Loan there was, and there currently is, no
proceeding pending for the total or partial condemnation of the Mortgaged
Property. There have not been any condemnation proceedings with respect to the
Mortgaged Property and, to the best of the Seller's knowledge, there are no such
proceedings scheduled to commence at a future date;

                  (18) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage;

                  (19) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
or attempted sale after default by the Mortgagor;

                  (20) The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, who had no interest, direct or indirect,
in the Mortgaged Property or in any loan made on the security thereof,

                                      -11-

<PAGE>

and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the requirements
Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of
1989, and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated. The appraisal is in a form acceptable to
Fannie Mae or Freddie Mac;

                  (21) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;

                  (22) The related Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to in
(j) above and such collateral does not serve as security for any other
obligation;

                  (23) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of such mortgage loans;

                  (24) The Mortgage Loan does not contain "graduated payment"
features and does not have a shared appreciation or other contingent interest
feature; no Mortgage Loan contains any buydown provisions;

                  (25) The Mortgagor is not in bankruptcy. Taking into account
the credit standing of the related Mortgagors pursuant to the Underwriting
Guidelines, the Seller has no knowledge of any circumstances or condition with
respect to the Mortgage, the Mortgaged Property or the Mortgagor that can
reasonably be expected to cause the Mortgage Loan to become delinquent or
adversely affect the value of the Mortgage Loan as compared to other mortgage
loans in the Seller's portfolio meeting the requirements of this Agreement;

                  (26) Other than with respect to Mortgage Loans identified on
the Mortgage Loan Schedule as interest-only Mortgage Loans, (i) principal
payments on the Mortgage Loan commenced no more than sixty (60) days after the
funds were disbursed in connection with the Mortgage Loan and (ii) each Mortgage
Note requires a monthly payment which is sufficient to fully amortize the
original principal balance over the original term thereof and to pay interest at
the related Mortgage Rate. With respect to each Mortgage Loan identified on the
Mortgage Loan Schedule as an interest-only Mortgage Loan, (i) payments on the
Mortgage Loan commenced no more than sixty (60) days after the funds were
distributed in connection with the Mortgage Loan, (ii) the interest-only period
shall not exceed the interest-only period set forth on the Mortgage Loan
Schedule and (iii) following the expiration of such interest-only period, the
remaining Monthly Payments shall be sufficient to fully amortize the original
principal balance over the remaining term of the Mortgage Loan. Each Mortgage
Loan has an original term to maturity of not more than 30 years, with interest

                                      -12-

<PAGE>

payable in arrears on the first day of each month. No Mortgage Loan contains
terms or provisions which would result in negative amortization;

                  (27) No Mortgage Loan is subject to a lender-paid mortgage
insurance policy;

                  (28) As to any Mortgage Loan which is not a MERS Mortgage
Loan, the Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located;

                  (29) The Mortgaged Property is located in the state identified
in the related Mortgage Loan Schedule and consists of a single parcel of real
property with a detached single family residence erected thereon, or a
townhouse, or a two-to four-family dwelling, or an individual condominium unit
in a condominium project, or an individual unit in a planned unit development or
a de minimis planned unit development, provided, however, that no residence or
dwelling is a single parcel of real property with a cooperative housing
corporation erected thereon, or a mobile home. As of the date of origination, no
portion of the Mortgaged Property was used for commercial purposes, and since
the date or origination no portion of the Mortgaged Property has been used for
commercial purposes;

                  (30) Except as set forth on the Mortgage Loan Schedule, none
of the Mortgage Loans are subject to a Prepayment Charge. For any Mortgage Loan
originated prior to October 1, 2002 that is subject to a Prepayment Charge, such
Prepayment Charge does not extend beyond five years after the date of
origination. For any Mortgage Loan originated on or following October 1, 2002
that is subject to a Prepayment Charge, such Prepayment Charge does not extend
beyond three years after the date of origination. Any such Prepayment Charge is
enforceable and was originated in compliance with all applicable federal, state,
and local laws;

                  (31) The Mortgaged Property is lawfully occupied under
applicable law, and all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities;

                  (32) If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development),
such condominium or planned unit development project is generally acceptable to
prudent lenders in the secondary mortgage market and meets the eligibility
requirements of the Originator's Underwriting Guidelines;

                  (33) There is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any environmental law,
rule or regulation is an issue; there is no violation of any environmental law,
rule or regulation with respect to the Mortgaged Property; and, to the best of
Seller's knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;

                                      -13-

<PAGE>

                  (34) The Mortgagor has not notified the Originator requesting
relief under the Servicemembers Civil Relief Act, and the Originator has no
knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers' Civil Relief Act;

                  (35) As of the related Closing Date, no Mortgage Loan was in
construction or rehabilitation status or has facilitated the trade-in or
exchange of a Mortgaged Property;

                  (36) No action has been taken or failed to be taken on or
prior to the related Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any insurance policy
related to a Mortgage Loan (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the insured)
whether arising out of actions, representations, errors, omissions, negligence,
or fraud, or for any other reason under such coverage;

                  (37) The Mortgage Loan was originated by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act, a savings and loan association, a savings bank,
a commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority;

                  (38) [Reserved];

                  (39) With respect to any broker fees collected and paid on any
of the Mortgage Loans, all broker fees have been properly assessed and the
Mortgagor is not entitled to any reimbursement therefore;

                  (40) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Purchaser certifying that the original
Mortgage Note has been lost or destroyed and not been replaced, if such Mortgage
Loan is subsequently in default, the enforcement of such Mortgage Loan will not
be materially adversely affected by the absence of the original Mortgage Note;

                  (41) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);

                  (42) There does not exist on the related Mortgaged Property
any hazardous substances, hazardous wastes or solid wastes, as such terms are
defined in the Comprehensive Environmental Response Compensation and Liability
Act, the Resource Conservation and Recovery Act of 1976, or other federal, state
or local environmental legislation;

                  (43) No Mortgage Loan had a Loan-to-Value Ratio or combined
Loan-to-Value Ratio at the time of origination in excess of the applicable
percentages set forth in the Mortgage Loan Schedule or on the exhibits attached
thereto and in no event was the Loan-to-Value Ratio or Combined Loan-to-Value
Ratio more than 100%;

                  (44) None of the Mortgage Loans are (a) subject to, covered by
or in violation of the Home Ownership and Equity Protection Act of 1994
("HOEPA"), (b) classified as "high cost," "covered" (other than a purchase money
Covered Loan under the New Jersey Home Ownership

                                      -14-

<PAGE>

Security Act of 2002), "high risk home," "high-rate, high-fee," "threshold," or
"predatory" loans under HOEPA or any other applicable state, federal or local
law, including any predatory or abusive lending laws (or similarly classified
loans using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having
high interest rates, points and/or fees) or (c) in violation of any state law or
ordinance similar to HOEPA;

                  (45) No Mortgagor was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan; None of the proceeds of the Mortgage Loan were
used to purchase or finance single-premium credit life or disability insurance
policies or any comparable insurance;

                  (46) Any principal advances made to the Mortgagor prior to the
related Closing Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having (A) first lien priority with respect to each Mortgage Loan which is
indicated to be a first lien (as reflected on the Mortgage Loan Schedule), or
(B) second lien priority with respect to each Mortgage Loan indicated to be a
second lien Mortgage Loan (as reflected on the Mortgage Loan Schedule), in
either case, by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence generally
acceptable to prudent lenders in the secondary mortgage market. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (47) Interest on each Mortgage Loan is calculated on the basis
of a 360-day year consisting of twelve 30-day months;

                  (48) No Mortgage Loan is a Balloon Mortgage Loan;

                  (49) With respect to each MERS Mortgage Loan, a MIN has been
assigned by MERS and such MIN is accurately provided on the related Mortgage
Loan Schedule. The related assignment of Mortgage to MERS has been duly and
properly recorded;

                  (50) With respect to each MERS Mortgage Loan, the Originator
has not received any notice of liens or legal actions with respect to such
Mortgage Loan and no such notices have been electronically posted by MERS;

                  (51) Any Mortgaged Property that is considered manufactured
housing is legally classified as real property, is permanently affixed to a
foundation, assumes the characteristics of site-built housing and is otherwise
generally acceptable to prudent lenders in the secondary mortgage market;

                  (52) With respect to each Mortgage Loan, the Originator has
fully and accurately furnished complete information on the related borrower
credit files to Equifax, Experian and Trans Union Credit Information Company, in
accordance with the Fair Credit Reporting Act and its

                                      -15-

<PAGE>

implementing regulations, on a monthly basis and the Company will fully furnish,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on its borrower credit files to
Equifax, Experian, and Trans Union Credit Information Company, on a monthly
basis;

                  (53) [Reserved];

                  (54) With respect to each Mortgage Loan which is a second lien
Mortgage Loan (i) if the related first lien provides for negative amortization,
the Loan-to-Value Ratio was calculated at the maximum principal balance of such
first lien that could result upon application of such negative amortization
feature, and (ii) either no consent for the Mortgage Loan is required by the
holder of the first lien or such consent has been obtained and is contained in
the Mortgage File;

                  (55) No predatory or deceptive lending practices, including
but not limited to, the extension of credit to the applicable Mortgagor without
regard for said Mortgagor's ability to repay the Mortgage Loan and the extension
of credit to said Mortgagor which has no apparent benefit to said Mortgagor,
were employed by the originator of the Mortgage Loan in connection with the
origination of the Mortgage Loan;

                  (56) No Mortgage Loan is a "High Cost Home Loan" as defined in
the Georgia Fair Lending Act, as amended (the "Georgia Act") or New York Banking
Law 6-1. No Mortgage Loan secured by owner occupied real property or an owner
occupied manufactured home located in the State of Georgia was originated (or
modified) on or after October 1, 2002 through and including March 6, 2003;

                  (57) No Mortgage Loan (a) is secured by property located in
the State of New York; (b) had an unpaid principal balance at origination of
$300,000 or less, and (c) has an application date on or after April 1, 2003, the
terms of which Mortgage Loan equal or exceed either the APR or the points and
fees threshold for "high-cost home loans," as defined in Section 6-L of the New
York State Banking Law;

                  (58) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Loan have been disclosed in writing
to the Mortgagor in accordance with applicable state and federal law and
regulation;

                  (59) As of the related Closing Date, each Loan is eligible for
sale in the secondary mortgage market or for securitization without unreasonable
credit enhancement;

                  (60) No Mortgage Loan is a high cost loan or a covered loan,
as applicable (as such terms are defined in Standard & Poor's LEVELS Version 5.6
Glossary Revised, Appendix E).

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                                      -16-

<PAGE>

                  (a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of the Certificates.

                  With respect to the representations and warranties contained
herein that are made to the knowledge or the best knowledge of the Seller or as
to which the Seller has no knowledge, if it is discovered that the substance of
any such representation and warranty is inaccurate and the inaccuracy materially
and adversely affects the value of the related Mortgage Loan, or the interest
therein of the Purchaser or the Purchaser's assignee, designee or transferee,
then notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation and warranty being inaccurate at the time the
representation and warranty was made, such inaccuracy shall be deemed a breach
of the applicable representation and warranty and the Seller shall take such
action described in the following paragraphs of this Section 3.03 in respect of
such Mortgage Loan. Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Initial Certification) as part of any Mortgage File, or of a
breach of any of the representations and warranties contained in Section 6 that
materially and adversely affects the value of any Mortgage Loan or the interest
therein of the Purchaser or the Purchaser's assignee, transferee or designee,
the party discovering such breach shall give prompt written notice to the
Seller; provided, that a breach of the representations and warranties made in
Section 6 (31), (45), (46), (53) and (57) shall be deemed to materially and
adversely affects the value of any Mortgage Loan or the interest therein of the
Certificateholders. Within sixty (60) days of its discovery or its receipt of
notice of any such missing documentation that was not transferred by the Seller
as described above, or of materially defective documentation, or of any such
breach of a representation and warranty, the Seller promptly shall deliver such
missing document or cure such defect or breach in all material respects or, in
the event the Seller cannot deliver such missing document or cannot cure such
defect or breach, the Seller shall, within ninety (90) days of its discovery or
receipt of notice, either (i) repurchase the affected Mortgage Loan at the
Purchase Price (as defined in the Pooling and Servicing Agreement) or (ii)
pursuant to the provisions of the Pooling and Servicing Agreement, cause the
removal of such Mortgage Loan from the Trust Fund and substitute one or more
Qualified Substitute Mortgage Loans. The Seller shall amend the Closing Schedule
to reflect the withdrawal of such Mortgage Loan from the terms of this Agreement
and the Pooling and Servicing Agreement. The Originator or the Seller, as
applicable, shall deliver to the Purchaser such amended Closing Schedule and
shall deliver such other documents as are required by this Agreement or the
Pooling and Servicing Agreement within five (5) days of any such amendment. Any
repurchase pursuant to this Section 7(a) shall be accomplished by transfer to an
account designated by the Purchaser of the amount of the Purchase Price in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase required by this Section shall be made in a manner consistent with
Section 2.03 of the Pooling and Servicing Agreement.

         Notwithstanding the foregoing, within 90 days of the earlier of
discovery by the Seller or receipt of notice by the Seller of the breach of the
representation of the Seller set forth in Section 6(30) above which materially
and adversely affects the interests of the Holders of the Class P Certificates
in any Prepayment Charge, the Seller shall pay the amount of the scheduled
Prepayment

                                      -17-

<PAGE>

Charge, for the benefit of the Holders of the Class P Certificates by remitting
such amount to the Servicer for deposit into the Collection Account, net of any
amount previously collected by the Servicer or paid by the Servicer, for the
benefit of the Holders of the Class P Certificates in respect of such Prepayment
Charge.

                  (b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure or repurchase a defective Mortgage
Loan constitute the sole remedies of the Purchaser against the Seller respecting
a missing document or a breach of the representations and warranties contained
in Section 6.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood LLP at 10:00 a.m. New York City time
on the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a) All of the representations and warranties of the Seller
         under this Agreement shall be true and correct in all material respects
         as of the date as of which they are made and no event shall have
         occurred which, with notice or the passage of time, would constitute a
         default under this Agreement;

                  (b) The Purchaser shall have received, or the attorneys of the
         Purchaser shall have received in escrow (to be released from escrow at
         the time of closing), all Closing Documents as specified in Section 9
         of this Agreement, in such forms as are agreed upon and acceptable to
         the Purchaser, duly executed by all signatories other than the
         Purchaser as required pursuant to the respective terms thereof;

                  (c) The Seller shall have delivered or caused to be delivered
         and released to the Purchaser or to its designee, all documents
         (including without limitation, the Mortgage Loans) required to be so
         delivered by the Purchaser pursuant to Section 2.01 of the Pooling and
         Servicing Agreement; and

                  (d) All other terms and conditions of this Agreement and the
         Pooling and Servicing Agreement shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the Mortgage Loan Purchase
Price for the Mortgage Loans as specified in Section 3 of this Agreement.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                  (a) A Secretary's Certificate of the Seller, dated the Closing
         Date, in form satisfactory to and upon which the Purchaser, UBS
         Securities LLC and WaMu Capital Corp.

                                      -18-

<PAGE>

          (together, the "Underwriters") may rely, and attached thereto copies
         of the certificate of incorporation, by-laws and certificate of good
         standing of the Seller under the laws of Delaware;

                  (b) An Opinion of Counsel to the Seller, dated the Closing
         Date, in form satisfactory to and addressed to the Underwriters;

                  (c) Such opinions of counsel as the Rating Agencies or the
         Trustee may request in connection with the sale of the Mortgage Loans
         by the Seller to the Purchaser or the Seller's execution and delivery
         of, or performance under, this Agreement;

                  (d) A letter from Deloitte & Touche LLP, certified public
         accountants, to the effect that they have performed certain specified
         procedures as a result of which they determined that certain
         information of an accounting, financial or statistical nature set forth
         in the Prospectus Supplement contained under the captions
         "Summary--Mortgage Loans," "Risk Factors," (to the extent of
         information concerning the Mortgage Loans contained therein) and
         "Description of the Mortgage Loans" agrees with the records of the
         Originator or the Seller, as applicable;

                  (e) Such further information, certificates, opinions and
         documents as the Purchaser or the Underwriters may reasonably request.

                  SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) the fees and expenses of the Seller's accountants and
attorneys and the costs and expenses incurred in connection with obtaining the
documents referred to in Sections 9(a), 9(b), 9(e) and 9(f), the costs and
expenses of printing (or otherwise reproducing) and delivering this Agreement,
the Pooling and Servicing Agreement, the Certificates, the prospectus and
Prospectus Supplement, and any private placement memorandum relating to the
Certificates and other related documents, the initial fees, costs and expenses
of the Trustee, the fees and expenses of the Purchaser's counsel in connection
with the preparation of all documents relating to the securitization of the
Mortgage Loans, the filing fee charged by the Securities and Exchange Commission
for registration of the Certificates and the fees charged by any rating agency
to rate the Certificates. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expense.

                  SECTION 11. [RESERVED].

                  SECTION 12. INDEMNIFICATION. The Seller shall indemnify and
hold harmless each of (i) the Purchaser, (ii) the Underwriter, (iii) the Person,
if any, to which the Purchaser assigns its rights in and to a Mortgage Loan and
each of their respective successors and assigns and (iv) each person, if any,
who controls the Purchaser within the meaning of Section 15 of the Securities
Act of 1933, as amended (the "1933 Act") ((i) through (iv) collectively, the
"Indemnified Party") against any and all losses, claims, expenses, damages or
liabilities to which the Indemnified Party may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, expenses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement or alleged untrue statement of any material fact contained
in the Prospectus Supplement under the

                                      -19-

<PAGE>

captions "Summary-Mortgage Loan","Risk Factors" (to the extent information
regarding the Mortgage Loans is contained therein) and "Description of the
Mortgage Loans" or the omission or the alleged omission by the Seller to state
therein the material fact necessary in order to make the statements therein not
misleading and, with respect to any private placement memorandum, computational
material, marketing material or any information provided by the Underwriter to a
purchaser of the Certificates, any information of a comparable nature, or (ii)
the data files containing information with respect to the Mortgage Loans as
transmitted by modem to the Purchaser by the Seller or any of its affiliates (as
such transmitted information may have been amended in writing by the Sellerr or
any of its affiliates with the written consent of the Purchaser subsequent to
such transmission) or any data that was correctly and accurately derived
therefrom (it being understood that the Seller shall have no liability hereunder
resulting from the aggregation or manipulation by the Purchaser or any Affiliate
thereof of information in the Prospectus Supplement derived from information in
the Mortgage Loan Schedule that is otherwise accurate information) or (b) any
representation, warranty or covenant made by the Seller or any affiliate of the
Seller herein, other than the representations and warranties on which the
Purchaser has relied, being, or alleged to be, untrue or incorrect; provided,
however, that to the extent that any such losses, claims, expenses, damages or
liabilities to which the Indemnified Party may become subject arise out of or
are based upon both (1) statements, omissions, representations, warranties or
covenants of the Seller described in this section and (2) any other factual
basis, the Seller shall indemnify and hold harmless the Indemnified Party only
to the extent that the losses, claims, expenses, damages, or liabilities of the
person or persons asserting the claim are determined to rise from or be based
upon matters set forth in clause (1) above and do not result from the gross
negligence or willful misconduct of such Indemnified Party. This indemnity shall
be in addition to any liability that the Seller may otherwise have.

                  SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement, and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.

                  Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Mortgage Loan Purchase
Price, or any such condition shall not have been waived or

                                      -20-

<PAGE>

satisfied and the Purchaser determines not to pay or cause to be paid the
Mortgage Loan Purchase Price, the Purchaser shall immediately effect the
re-delivery of the Mortgage Loans, if delivery to the Purchaser has occurred,
and the security interest created by this Section 12 shall be deemed to have
been released.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by fax and, receipt of which is confirmed by telephone, if to the
Purchaser, addressed to the Purchaser at 1285 Avenue of the Americas, New York,
New York 10019, facsimile number (212) 713-7999, Attention: Glenn McIntyre, or
such other address as may hereafter be furnished to the Seller in writing by the
Purchaser; if to the Seller, addressed to the Seller at 1285 Avenue of the
Americas, New York, New York 10019, facsimile number (212) 713-7999, Attention:
Glenn McIntyre, or to such other address as the Seller may designate in writing
to the Purchaser.

                  SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement that is prohibited or that is held
to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 16. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement and the
Pooling and Servicing Agreement.

                  SECTION 17. SURVIVAL. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (OTHER THAN THE CHOICE OF LAW
PROVISIONS THEREIN) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO
INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW SHALL APPLY TO THIS AGREEMENT.

                                      -21-

<PAGE>

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then (a) it is the express
intent of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Seller to the Purchaser to secure a debt or other obligation of the
Seller and (b) (1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code; (2) the conveyance provided for in Section 4 hereof shall be
deemed to be a grant by the Seller to the Purchaser of a security interest in
all of the Seller's right, title and interest in and to the Mortgage Loans and
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession" by the secured party for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code; and (4) notifications to persons holding such property and
acknowledgments, receipts or confirmations from persons holding such property
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to Section 4(d)
hereof shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser 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 Mortgage Loans, 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 this Agreement and the Pooling and Servicing Agreement.

                  The NIMS Insurer, if any, shall be a third party beneficiary
hereof and may enforce the terms hereof as if a party hereto.

                                      -22-

<PAGE>

                  IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.

                                          MORTGAGE ASSET SECURITIZATION
                                          TRANSACTIONS, INC.

                                          By:________________________________
                                          Name:
                                          Title:

                                          By:________________________________
                                          Name:
                                          Title:

                                          UBS REAL ESTATE SECURITIES INC.

                                          By:________________________________
                                          Name:
                                          Title:

                                          By:________________________________
                                          Name:
                                          Title:

                                      -23-

<PAGE>

                                    EXHIBIT E

                               REQUEST FOR RELEASE
                                  OF DOCUMENTS

To:      U.S. Bank Trust National Association
         60 Livingston Ave
         St. Paul, MN 55107

                    Re:  Pooling and Servicing Agreement, dated as of July 1,
                         2004, among Mortgage Asset Securitization Transactions,
                         Inc., HomEq Servicing Corporation and U.S. Bank
                         National Association, Mortgage Pass- Through
                         Certificates, Series 2004-FRE1

         In connection with the administration of the Mortgage Loans held by you
as Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or 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 Reason: ___________________________________________

Address to which Trustee should deliver the Trustee's Mortgage File:

                                      E-1-1

<PAGE>

By:__________________________________
         (authorized signer)

Issuer:______________________________

Address:_____________________________

Date:________________________________

Trustee

U.S. Bank National Association
Please acknowledge the execution of the above request by your signature and date
below:

_____________________                       ___________
Signature                                   Date

Documents returned to Trustee:

_____________________                       ___________
Trustee                                     Date

                                      E-1-2

<PAGE>

                                   EXHIBIT F-1

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                 [Date]

U.S. Bank Trust National Association
60 Livingston Ave
St. Paul, MN 55107

                    Re:  MASTR Asset Backed Securities Trust, Series 2004-FRE1,
                         Mortgage Pass-Through Certificates, Class ___,
                         representing a ___% Class ___ Percentage Interest
                         -------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of July
1, 2004, among Mortgage Asset Securitization Transactions, Inc. as Depositor,
HomEq Servicing Corporation as Servicer and U.S. Bank National Association as
Trustee (the "Pooling and Servicing Agreement"), pursuant to which Pooling and
Servicing Agreement the Certificates were issued.

                                      F-1-1

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                             Very truly yours,

                                             [Transferor]

                                             By:___________________________
                                             Name:
                                             Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                         [Date]

U.S. Bank Trust National Association
60 Livingston Ave
St. Paul, MN 55107

                    Re:  MASTR Asset Backed Securities Trust, Series 2004-FRE1,
                         Mortgage Pass-Through Certificates, Class ___,
                         representing a ___% Class ___ Percentage Interest

Ladies and Gentlemen:

                  In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"1933 Act") and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that the
sale to it is being made in reliance on Rule 144A. The Transferee is acquiring
the Certificates for its own account or for the account of a qualified
institutional buyer, and understands that such Certificate may be resold,
pledged or transferred only (i) to a person reasonably believed 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 1933 Act.

                  2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the nature,
performance and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement referred to below, and (d) any credit enhancement mechanism associated
with the Certificates, that it has requested.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of July 1, 2004, among Mortgage Asset Securitization
Transactions, Inc. as Depositor, HomEq Servicing Corporation as Servicer and
U.S. Bank National Association as Trustee, pursuant to which the Certificates
were issued.
                                             [TRANSFEREE]

                                             By:__________________________
                                             Name:
                                             Title:

                                      F-1-3

<PAGE>

                             ANNEX 1 TO EXHIBIT F-1

                  QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and U.S. Bank National Association, as Trustee,
with respect to the mortgage pass-through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

         ___ CORPORATION, ETC. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986.

         ___ BANK. The Transferee (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
the 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 Transferee (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 any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an
audited net worth of at least

         ___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
--------
         1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities. $25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.

                                      F-1-4

<PAGE>

         ___ INSURANCE COMPANY. The Transferee 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 a
State, territory or the District of Columbia.

         ___ STATE OR LOCAL PLAN. The Transferee 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 Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.

         ___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee 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 Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor 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 Transferee may be in reliance on Rule 144A.

         ___      ___      Will the Transferee be purchasing the Certificates
         Yes      No       only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third

                                      F-1-5

<PAGE>

party unless the Transferee has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.

                  7. The Transferee 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 Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated: ___________

                                      ____________________________________
                                      Print Name of Transferee

                                      By:_________________________________
                                      Name:
                                      Title:

                                      F-1-6

<PAGE>

                             ANNEX 2 TO EXHIBIT F-1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and U.S. Bank National Association, as Trustee,
with respect to the mortgage pass- through certificates (the "Certificates")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee'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 Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

          ____ The Transferee owned $___________________ in securities (other
               than the excluded securities referred to below) as of the end of
               the Transferee's most recent fiscal year (such amount being
               calculated in accordance with Rule 144A).

          ____ The Transferee 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
               Transferee'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 Transferee or are part of the
Transferee'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.

                                      F-1-7

<PAGE>

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated: __________

                                     ___________________________________
                                     Print Name of Transferee or Advisor

                                     By:________________________________
                                     Name:
                                     Title:

                                     IF AN ADVISER:

                                     ___________________________________
                                     Print Name of Transferee

                                      F-1-8

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER
                    ----------------------------------------

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1. I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933, as
amended.

                  3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.

                                                 Name of Purchaser

                                                 ______________________________

                                                 By:____________________________
                                                 Name:
                                                 Title:

Date of this certificate: ______________

Date of information provided in paragraph 3: ______________

                                      F-1-9

<PAGE>

                                   EXHIBIT F-2

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK                   )

COUNTY OF NEW YORK                  )

                  __________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly organized and
existing under the laws of ______________, the record owner of MASTR Asset
Backed Securities Trust, Series 2004-FRE1, Mortgage Pass-Through Certificates,
Class [R][R-X] Certificates, (the "Residual Certificates"), on behalf of whom I
make this affidavit and agreement. Capitalized terms used but not defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement pursuant to which the Residual Certificates were issued.

                  2. The Owner (i) is and will be a "Permitted Transferee" as of
____________, 20__ and (ii) is acquiring the Residual Certificates for its own
account or for the account of another Owner from which it has received an
affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

                  3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Residual
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Residual Certificates may be a "noneconomic residual interest" within the
meaning of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                                      F-2-1

<PAGE>

                  4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificates if, at any time during the taxable
year of the pass-through entity, a non-Permitted Transferee is the record holder
of an interest in such entity. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain cooperatives.)

                  5. The Owner is aware that the Trustee will not register the
transfer of any Residual Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

                  6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.

                  7. The Owner's taxpayer identification number is
_________________.

                  8. The Owner has reviewed the restrictions set forth on the
face of the Residual Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Residual Certificates were
issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event that the Owner holds such
Certificate in violation of Section 5.02(d)); and that the Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.

                  9. The Owner is not acquiring and will not transfer the
Residual Certificates in order to impede the assessment or collection of any
tax.

                  10. The Owner anticipates that it will, so long as it holds
the Residual Certificates, have sufficient assets to pay any taxes owed by the
holder of such Residual Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Residual Certificates that the
Owner intends to pay taxes associated with holding such Residual Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Residual Certificates.

                  11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Residual Certificates.

                  12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

                  13. The Owner is not acquiring the Residual Certificates with
the intent to transfer the Residual Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Residual Certificates, or that may become insolvent or subject to a

                                      F-2-2

<PAGE>

bankruptcy proceeding, for so long as the Residual Certificates remain
outstanding.

                  14. The Owner will, in connection with any transfer that it
makes of the Residual Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Residual Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.

                  15. The Owner will, in connection with any transfer that it
makes of the Residual Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Residual Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Residual Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the
Residual Certificates remains outstanding; and (iii) is not a "Permitted
Transferee".

                  16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included 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.

                  17. The Owner of the Residual Certificate, hereby agrees that
in the event that the Trust Fund created by the Pooling and Servicing Agreement
is terminated pursuant to Section 9.01 thereof, the undersigned shall assign and
transfer to the Holders of the Class CE Certificates (with respect to a
termination of REMIC I) any amounts in excess of par received in connection with
such termination. Accordingly, in the event of such termination, the Trustee is
hereby authorized to withhold any such amounts in excess of par and to pay such
amounts directly to the Holders of the Class CE Certificates. This agreement
shall bind and be enforceable against any successor, transferee or assignee of
the undersigned in the Residual Certificate. In connection with any transfer of
the Residual Certificate, the Owner shall obtain an agreement substantially
similar to this clause from any subsequent owner.

                                      F-2-3

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 20__.

                                             [OWNER]

                                             By:__________________________
                                             Name:
                                             Title:  [Vice] President

ATTEST:

By:_________________________________
Name:
Title:    [Assistant] Secretary

                  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 a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of ____, 20___.

                                            ____________________________
                                                     Notary Public

                                            County of __________________
                                            State of ___________________

                                            My Commission expires:

                                      F-2-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK                   )

COUNTY OF NEW YORK                  )

                  __________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ____________________ of ____________________________
(the "Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Residual Certificates
(the "Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding; and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                      F-2-5

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 20__.

                                [OWNER]

                                By:________________________________
                                Name:
                                Title:            [Vice] President

ATTEST:

By:______________________________
Name:
Title:   [Assistant] Secretary

                  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 a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of ______, 20___.

                                       ____________________________
                                                Notary Public

                                       County of __________________
                                       State of ___________________

                                       My Commission expires:

                                     F-2-6

<PAGE>

                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                 ________, 2004

Mortgage Asset Securitization Transactions, Inc.
1285 Avenue of the Americas
New York, New York 10019

HomEq Servicing Corporation
4837 Watt Avenue
North Highlands, California 95660

U.S. Bank National Association
60 Livingston Street
St. Paul, Minnesota 55107

               Re:  MASTR Asset Backed Securities Trust, Series 2004-FRE1,
                    Mortgage Pass-Through Certificates, Class ___

Dear Sirs:

                  _______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of MASTR Asset Backed Securities Trust, Series 2004-FRE1,
Mortgage Pass-Through Certificates, Class [CE] [P] [R](the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of July 1, 2004, among Mortgage Asset Securitization
Transactions, Inc. as depositor (the "Depositor"), HomEq Servicing Corporation
as Servicer (the "Servicer") and U.S. Bank National Association as trustee (the
"Trustee"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to, and covenants with the
Depositor, the Trustee and the Servicer that:

         The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 C.F.R.ss.
2510.3-101.

                                       G-1

<PAGE>

                                               Very truly yours,

                                               _____________________________

                                               By:__________________________
                                               Name:
                                               Title:

                                       G-2

<PAGE>

                                    EXHIBIT H

                     FORM OF REPORT PURSUANT TO SECTION 4.06

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

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-K

                                  Annual Report

                     Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934 (Fee Required)

                     For fiscal year ended ________________

                       Commission file number: 333-_______

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.
            (as depositor under the Pooling and Servicing Agreement,
             dated as of July1, 2004, providing for the issuance of
              Mortgage Pass-Through Certificates, Series 2004-FRE1)

                Mortgage Asset Securitization Transactions, Inc.

             (Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------

           Delaware                                             [__]
(State or Other Jurisdiction                          (I.R.S. Employer
of Incorporation)                                     Identification Number)

1285 Avenue of the Americas
New York, New York 10019                                       10019
(Address of Principal Executive Offices)                      (Zip Code)

Registrant's telephone number, including area code: [___]

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

                                       H-1

<PAGE>

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate whether the Registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                                                      /X/ YES     / / No
Item 1.  Business:

Not applicable

Item 2.  Properties:

Not applicable

Item 3.  Legal Proceedings:

None

Item 4.  Submission of Matters to a Vote of Security-Holders

None

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

To the best knowledge of the registrant there is no established public trading
market for the certificates.

There are approximately _____ holders of record as of the end of the reporting
year.

Item 6.  Selected Financial Data.

Not applicable.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

Not applicable

Item 8.  Financial Statements and Supplementary Data.

                                       H-2

<PAGE>

Not applicable.

Item 9.  Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

None

Item 10.

Not applicable

Item 11.  Executive Compensation

Not applicable

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Not applicable

Item 13.  Certain Relationships and Related Transactions

Not applicable

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

         a)       The company filed on Form 8-K, separately for each
                  distribution date, the distribution of funds related to the
                  trust for each of the following distribution dates:

                           Distribution Date       Form 8-K Filing Date
                           _________________       ________________
                           _________________       ________________
                           _________________       ________________

         b) 99.1 Annual Report of Independent Public Accountants' as to
servicing activities,

                  (a) HomEq Servicing Corporation, as Servicer

                  99.2     Annual Statement of Compliance with obligations under
                           the Pooling and Servicing Agreement or servicing
                           agreement, as applicable, of:

                  (a) HomEq Servicing Corporation, as Servicer

Such document (i) is not filed herewith since such document was not received by
the Reporting Person at least three business days prior to the due date of this
report; and (ii) will be included in an amendment to this report on Form 10-K/A
to be filed within 30 days of the Reporting Person's receipt of such document.

                                       H-3

<PAGE>

                                   Signatures

                  Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.

Date: ___________

                               Mortgage Asset Securitization Transactions,
                               Inc., by U.S. Bank National Association, as
                               Trustee for MASTR Asset Backed Securities
                               Trust, Series 2004-FRE1, Mortgage Pass-
                               Through Certificates.

                               By:
                                   ------------------------------
                               Name:
                               Title:
                               Company:

                                       H-4

<PAGE>

                                    EXHIBIT I

                           FORM OF LOST NOTE AFFIDAVIT

                              Loan #: ____________
                             Borrower: _____________

                               LOST NOTE AFFIDAVIT

                  I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of Mortgage Asset Securitization Transactions, Inc. (the
"Purchaser"), _____________________ (the "Deponent"), being duly sworn, deposes
and says that:

         1. The Seller's address is: _____________________
                                     _____________________
                                     _____________________

         2.       The Seller previously delivered to the Purchaser a signed
                  Initial Certification with respect to such Mortgage and/or
                  Assignment of Mortgage;

         3.       Such Mortgage Note and/or Assignment of Mortgage was assigned
                  or sold to the Purchaser by ________________________, a
                  ____________ corporation pursuant to the terms and provisions
                  of a Mortgage Loan Purchase Agreement dated as of
                  __________ __, _____;

         4.       Such Mortgage Note and/or Assignment of Mortgage is not
                  outstanding pursuant to a request for release of Documents;

         5.       Aforesaid Mortgage Note and/or Assignment of Mortgage (the
                  "Original") has been lost;

         6.       Deponent has made or caused to be made a diligent search for
                  the Original and has been unable to find or recover same;

         7.       The Seller was the Seller of the Original at the time of the
                  loss; and

         8.       Deponent agrees that, if said Original should ever come into
                  Seller's possession, custody or power, Seller will immediately
                  and without consideration surrender the Original to the
                  Purchaser.

         9.       Attached hereto is a true and correct copy of (i) the Note,
                  endorsed in blank by the Mortgagee and (ii) the Mortgage or
                  Deed of Trust (strike one) which secures the Note, which
                  Mortgage or Deed of Trust is recorded in the county where the
                  property is located.

         10.      Deponent hereby agrees that the Seller (a) shall indemnify and
                  hold harmless the Purchaser, its successors and assigns,
                  against any loss, liability or damage, including reasonable
                  attorney's fees, resulting from the unavailability of any
                  Notes, including but not limited to any loss, liability or
                  damage arising from (i) any false statement contained in
                  this Affidavit, (ii) any claim of any party that has already
                  purchased a mortgage loan evidenced by the Lost Note or any
                  interest in such mortgage loan, (iii) any claim of any
                  borrower with respect to the existence of terms of a
                  mortgage loan evidenced by the Lost Note on the related
                  property to the fact that the mortgage loan is not evidenced
                  by an original note and (iv) the issuance of a new
                  instrument in lieu thereof (items (i) through (iv) above
                  hereinafter referred to as the "Losses") and (b) if required
                  by any Rating Agency in connection with placing such Lost
                  Note into a Pass-Through Transfer, shall obtain a surety
                  from an insurer acceptable to the applicable Rating Agency
                  to cover any Losses with respect to such Lost Note.

         11.      This Affidavit is intended to be relied upon by the Purchaser,
                  its successors and assigns. _____________________, a
                  ______________ corporation represents and warrants that is has
                  the authority to perform its obligations under this Affidavit
                  of Lost Note.

Executed this ____ day, of ___________ ______.

                                               SELLER

                                               By:__________________________
                                               Name:
                                               Title:

                  On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.

                                                Signature:

                                                [Seal]

                                       I-1

<PAGE>

                                   EXHIBIT J-1

                FORM CERTIFICATION TO BE PROVIDED BY THE TRUSTEE
                                 WITH FORM 10-K

                  Certification

                  I, [identify the certifying individual], certify that:

                  1. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution or servicing reports filed in
respect of periods included in the year covered by this annual report, of
[identify issuer (i.e., the name of the specific deal to which this
certification relates rather than just the name of the Depositor)];

                  2. Based on my knowledge, the information in these reports,
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 last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution or servicing
information required to be provided to the trustee by the servicer under the
pooling and servicing, or similar, agreement, for inclusion in these reports is
included in these reports;

                  4. Based on my knowledge and upon the annual compliance
statement included in the report and required to be delivered to the trustee in
accordance with the terms of the Pooling and Servicing Agreement, and except as
disclosed in the reports, the servicer has fulfilled its obligations under the
servicing agreement; and

                  5. The reports disclose all significant deficiencies relating
to the servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the pooling and servicing, or similar,
agreement, that is included in these reports.

                  In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: HomEq
Servicing Corporation.

                                       J-1

<PAGE>

                                      U.S. BANK NATIONAL ASSOCIATION

                                      By:____________________________________
                                      Name:
                                      Title:
                                      Date:

                                         J-2

<PAGE>

                                   EXHIBIT J-2

                      FORM OF CERTIFICATION TO BE PROVIDED
                           TO TRUSTEE BY THE SERVICER

U.S. Bank National Association
60 Livingston Street
St. Paul, Minnesota 55107

         Re:      MASTR Asset Backed Securities Trust 2004-FRE1

         HomEq Servicing Corporation, as Servicer hereby certifies to the
Trustee that:

         1. Based on my knowledge, the information in the Annual Statement of
Compliance, the Annual Independent Public Accountant's Servicing Report and all
servicing reports, officer's certificates and other information relating to the
servicing of the Mortgage 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. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Servicer under this Pooling and Servicing
Agreement has been provided to the Trustee;

         3. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon the review
required by such Pooling and Servicing Agreement, and except as disclosed in the
Annual Statement of Compliance and the Annual Independent Public Accountant's
Servicing Report submitted to the Trustee, the Servicer has, as of the date of
this certification fulfilled its obligations under such Pooling and Servicing
Agreement; and

         4. The Servicer has 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
in the Pooling and Servicing Agreement.

         Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated as of July 1,
2004, among Mortgage Asset Securitization Transactions, Inc. as depositor, HomEq
Servicing Corporation, as servicer and U.S. Bank National Association, as
trustee.

                                   HomEq Servicing Corporation, as Servicer

                                   By:_________________________________
                                   Name:
                                   Title:
                                   Date:

                                       J-3

<PAGE>

                                    EXHIBIT K

                           FORM OF CUSTODIAL AGREEMENT

                                       K-1

<PAGE>

                                    EXHIBIT L

             Annual Statement of Compliance pursuant to Section 3.20

                  MASTR Asset Backed Securities Trust 2004-FRE1
              Mortgage Pass Through Certificates, Series 2004-FRE1

                  I, _____________________, hereby certify that I am a duly
appointed __________________________ of HomEq Servicing Corporation (the
"Servicer"), and further certify as follows:

                  1. This certification is being made pursuant to Section 3.20
of the Pooling and Servicing Agreement, dated as of July 1, 2004 (the
"Agreement"), among Mortgage Asset Securitization Transactions, Inc., as
depositor, HomEq Servicing Corporation, as servicer, and U.S. Bank National
Association, as trustee.

                  2. I have reviewed the activities of the Servicer during the
preceding year and the Servicer's performance under the Agreement and to the
best of my knowledge, based on such review, the Servicer has fulfilled all of
its obligations under the Agreement throughout the year.

                  Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreement.

Dated: _____________, 2004

                                       K-2

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.

                                           By:  _____________________________
                                           Name:
                                           Title:

                  I, _________________________, a (an) __________________ of the
Servicer, hereby certify that _________________ is a duly elected, qualified,
and acting _______________________ of the Servicer and that the signature
appearing above is his/her genuine signature.

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.

                                            By:  ______________________________
                                            Name:
                                            Title:

                                       K-3

<PAGE>

                                    EXHIBIT M

                             FORMS OF CAP CONTRACTS

                             Available Upon Request

                                       K-4

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                [FILED BY PAPER]

                                       K-5

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                             Available Upon Request

                                  Schedule 2-1

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