Document:

c48176_ex4-2.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

AMENDED AND RESTATED TRUST AGREEMENT 

among 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION, 

as Depositor, 

U.S. BANK TRUST NATIONAL ASSOCIATION, 

as Owner Trustee 

and 

WELLS FARGO BANK, N.A., 

as Trust Administrator 

Dated as of April 12, 2007 

Fieldstone Mortgage Investment Trust, Series 2007-1 

Mortgage-Backed Notes 

	
TABLE OF CONTENTS
  
	 

  
	 

  	 
  	 

  	 
  	
Page 
  
	 

  
	
ARTICLE I
  
	
DEFINITIONS
  
	 

  
	
Section 1.01. 
  	 
  	
Definitions 
  	 
  	
1 
  
	
Section 1.02. 
  	 
  	
Other Definitional Provisions 
  	 
  	
5 
  
	 

  
	
ARTICLE II
  
	
ORGANIZATION
  
	 

  
	
Section 2.01. 
  	 
  	
Name 
  	 
  	
6 
  
	
Section 2.02. 
  	 
  	
Office 
  	 
  	
6 
  
	
Section 2.03. 
  	 
  	
Purpose and Powers 
  	 
  	
6 
  
	
Section 2.04. 
  	 
  	
Appointment of the Owner Trustee 
  	 
  	
6 
  
	
Section 2.05. 
  	 
  	
Initial Capital Contribution; Declaration of Trust 
  	 
  	
7 
  
	
Section 2.06. 
  	 
  	
Issuance of Initial Certificates 
  	 
  	
7 
  
	
Section 2.07. 
  	 
  	
Liability of the Ownership Certificate Holder 
  	 
  	
7 
  
	
Section 2.08. 
  	 
  	
Situs of Trust 
  	 
  	
7 
  
	
Section 2.09. 
  	 
  	
Title to Trust Property 
  	 
  	
8 
  
	
Section 2.10. 
  	 
  	
Representations and Warranties of the Depositor 
  	 
  	
8 
  
	
Section 2.11. 
  	 
  	
Tax Treatment 
  	 
  	
9 
  
	
Section 2.12. 
  	 
  	
Investment Company 
  	 
  	
9 
  
	 

  
	
ARTICLE III
  
	
THE CERTIFICATES AND TRANSFERS OF INTERESTS
  
	 

  
	
Section 3.01. 
  	 
  	
The Certificates 
  	 
  	
9 
  
	
Section 3.02. 
  	 
  	
Execution, Authentication and Delivery of the Certificates 
  	 
  	
10 
  
	
Section 3.03. 
  	 
  	
    Registration of and Limitations on Transfers and Exchanges of the Certificates  
    
	 	10 
	
Section 3.04. 
  	 
  	
Lost, Stolen, Mutilated or Destroyed Certificate 
  	 
  	
13 
  
	
Section 3.05. 
  	 
  	
Persons Deemed Certificateholders 
  	 
  	
13 
  
	
Section 3.06. 
  	 
  	
Access to List of Certificateholders’ Names and Addresses 
  	 
  	
13 
  
	
Section 3.07. 
  	 
  	
[Reserved] 
  	 
  	
13 
  
	
Section 3.08. 
  	 
  	
Maintenance of Office or Agency 
  	 
  	
13 
  
	
Section 3.09. 
  	 
  	
Certificate Paying Agent 
  	 
  	
14 
  
	
Section 3.10. 
  	 
  	
Initial Beneficiary 
  	 
  	
15 
  
	 

  
	
ARTICLE IV
  
	
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
  
	 

  
	
Section 4.01. 
  	 
  	
Collection Account 
  	 
  	
15 
  
	
Section 4.02. 
  	 
  	
Application of Trust Funds 
  	 
  	
15 
  
	
Section 4.03. 
  	 
  	
Method of Payment 
  	 
  	
16 
  
	
Section 4.04. 
  	 
  	
[Reserved] 
  	 
  	
16 
  
	
Section 4.05. 
  	 
  	
Segregation of Moneys; No Interest 
  	 
  	
16 
  

i 

	
ARTICLE V
  
	
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE; ACTION BY
  
	
CERTIFICATEHOLDERS
  
	 

  
	
Section 5.01. 
  	 
  	
General Authority 
  	 
  	
    16 
    

	
Section 5.02. 
  	 
  	
General Duties 
  	 
  	
    16 
    

	
Section 5.03. 
  	 
  	
Action Upon Instruction 
  	 
  	
    17 
    

	
Section 5.04. 
  	 
  	
No Duties Except as Specified under Specified Documents or in Instructions 
  	 
  	
    17 
    

	
Section 5.05. 
  	 
  	
Restrictions 
  	 
  	
    18 
    

	
Section 5.06. 
  	 
  	
Prior Notice to the Certificateholders with Respect to Certain Matters 
  	 
  	
    18 
    

	
Section 5.07. 
  	 
  	
Action by the Holder with Respect to Bankruptcy 
  	 
  	
    20 
    

	
Section 5.08. 
  	 
  	
Restrictions on the Ownership Certificate Holder’s Power 
  	 
  	
    21 
    

	 

  
	
ARTICLE VI
  
	
CONCERNING THE OWNER TRUSTEE
  
	 

  
	
Section 6.01. 
  	 
  	
Acceptance of Trusts and Duties 
  	 
  	
    21 
    

	
Section 6.02. 
  	 
  	
Furnishing of Documents 
  	 
  	
    22 
    

	
Section 6.03. 
  	 
  	
Books and Records 
  	 
  	
    22 
    

	
Section 6.04. 
  	 
  	
Representations and Warranties 
  	 
  	
    22 
    

	
Section 6.05. 
  	 
  	
Reliance; Advice of Counsel 
  	 
  	
    24 
    

	
Section 6.06. 
  	 
  	
Not Acting in Individual Capacity 
  	 
  	
    24 
    

	
Section 6.07. 
  	 
  	
Owner Trustee Not Liable for Certificates or Collateral 
  	 
  	
    25 
    

	
Section 6.08. 
  	 
  	
Owner Trustee May Own Notes 
  	 
  	
    25 
    

	
Section 6.09. 
  	 
  	
Licenses 
  	 
  	
    25 
    

	
Section 6.10. 
  	 
  	
Doing Business in Other Jurisdictions 
  	 
  	
    25 
    

	
Section 6.11. 
  	 
  	
Sarbanes-Oxley Act Certification 
  	 
  	
    26 
    

	
Section 6.12. 
  	 
  	
Regulation AB Reporting Requirements 
  	 
  	
    26 
    

	 

  
	
ARTICLE VII
  
	
INDEMNIFICATION AND COMPENSATION
  
	 

  
	
Section 7.01. 
  	 
  	
Trust Expenses 
  	 
  	
    26 
    

	
Section 7.02. 
  	 
  	
Indemnification 
  	 
  	
    26 
    

	
Section 7.03. 
  	 
  	
Compensation 
  	 
  	
    27 
    

	
Section 7.04. 
  	 
  	
Lien on Trust Estate 
  	 
  	
    27 
    

	 

  
	
ARTICLE VIII
  
	
TERMINATION OF AGREEMENT
  
	 

  
	
Section 8.01. 
  	 
  	
Termination of Agreement 
  	 
  	
    27 
    

	 

  
	
ARTICLE IX
  
	
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES 
  	 
  	

    

	 

  
	
Section 9.01. 
  	 
  	
Eligibility Requirements for Owner Trustee 
  	 
  	
    28 
    

	
Section 9.02. 
  	 
  	
Resignation or Removal of Owner Trustee 
  	 
  	
    28 
    

	
Section 9.03. 
  	 
  	
Successor Owner Trustee 
  	 
  	
    29 
    

ii 

	
Section 9.04. 
  	 
  	
Merger or Consolidation of Owner Trustee 
  	 
  	
29 
  
	
Section 9.05. 
  	 
  	
Appointment of Co-Trustee or Separate Trustee 
  	 
  	
29 
  
	 

  
	
ARTICLE X
  
	
MISCELLANEOUS
  
	 

  
	
Section 10.01. Supplements and Amendments 
  	 
  	
31 
  
	
Section 10.02. No Legal Title to Trust Estate in Certificateholders 
  	 
  	
32 
  
	
Section 10.03. Pledge of Collateral by Owner Trustee is Binding 
  	 
  	
32 
  
	
Section 10.04. Limitations on Rights of Others 
  	 
  	
33 
  
	
Section 10.05. Notices 
  	 
  	
33 
  
	
Section 10.06. Severability 
  	 
  	
33 
  
	
Section 10.07. Separate Counterparts 
  	 
  	
33 
  
	
Section 10.08. Successors and Assigns 
  	 
  	
33 
  
	
Section 10.09. Headings 
  	 
  	
33 
  
	
Section 10.10. Governing Law 
  	 
  	
33 
  
	
Section 10.11. No Petition 
  	 
  	
34 
  
	
Section 10.12. No Recourse 
  	 
  	
34 
  
	
Section 10.13. Customer Identification 
  	 
  	
34 
  
	 

  
	
ARTICLE XI
  
	
OFFICERS
  
	 

  
	
Section 11.01. Appointment of Officers 
  	 
  	
35 
  
	
Section 11.02. Officers to Provide Information to the Owner Trustee 
  	 
  	
35 
  

	
Exhibit A 
  	 
  	
Forms of Certificates 
  
	
Exhibit B 
  	 
  	
[Reserved] 
  
	
Exhibit C 
  	 
  	
Form of Certificate of Trust 
  
	
Exhibit D-1 
  	 
  	
Form of Rule 144A Investment Letter 
  
	
Exhibit D-2 
  	 
  	
Form of Non-Rule 144A Investment Letter 
  
	
Exhibit E 
  	 
  	
Form of Certificate of Beneficial Owner 
  
	
Exhibit F 
  	 
  	
Form of Representation and Warranty Regarding Transferee’s Status as a REIT or 
  
	 

  	 
  	
Qualified REIT Subsidiary 
  

iii 

     This TRUST AGREEMENT, dated as of April 12, 2007, is by and among FIELDSTONE MORTGAGE INVESTMENT CORPORATION, a Maryland corporation (the “Depositor”), U.S. BANK TRUST NATIONAL ASSOCIATION,
a national banking association, as Owner Trustee (the “Owner Trustee”), and WELLS FARGO BANK, N.A., a national banking association, as Trust Administrator (the “Trust Administrator”). 

     WHEREAS, pursuant to the Transfer and Servicing Agreement, the Depositor intends to sell, transfer and assign to a Delaware statutory trust created hereunder certain Mortgage Loans and related assets
(collectively, the “Collateral”), which statutory trust would then pledge such Collateral under an indenture in order to secure the issuance of its Mortgage-Backed Notes, Series 2007-1 (the “Securities”) and its obligations under
the Swap Agreement, the net proceeds of which would be applied toward the purchase of the Collateral. 

     WHEREAS, the Depositor and the Owner Trustee entered into a Trust Agreement dated March 23, 2007 (the “Original Trust Agreement”), and filed with the Secretary of State of the State of
Delaware a Certificate of Trust on March 23, 2007, creating Fieldstone Mortgage Investment Trust, Series 2007-1 (the “Trust”). 

     WHEREAS, the Depositor, the Owner Trustee and the Trust Administrator desire to enter into this Amended and Restated Trust Agreement in order to amend and restate in its entirety the Original Trust
Agreement and to provide for the operation of the Trust upon the terms and conditions more particularly set forth herein. 

     NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto hereby agree as follows: 

ARTICLE I 

DEFINITIONS 

     Section 1.01. Definitions. For all purposes of this Agreement, the following terms shall have the meanings set
forth below. 

     Actual Knowledge: With respect to (i) the Owner Trustee, any officer within the Corporate Trust Office of the Owner Trustee responsible for administering the Trust
hereunder, or under the Operative Agreements, who has actual knowledge of an action taken or an action not taken with regard to the Trust. Actions taken or actions not taken of which the Owner Trustee should have had knowledge, or has constructive
knowledge, do not meet the definition of Actual Knowledge hereunder. With respect to the Trust Administrator, any Responsible Officer of the Trust Administrator who has actual knowledge of an action taken or an action not taken with regard to the
Trust. Actions taken or actions not taken of which the Trust Administrator should have had knowledge, or has constructive knowledge, do not meet the definition of Actual Knowledge hereunder. 

     Agreement or Trust Agreement: This Amended and Restated Trust Agreement and any amendments or modifications hereof. 

     Authorized Officer: With respect to the Trust, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Trust and who
is identified on 

the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, so long as the Transfer and Servicing
Agreement is in effect, any Vice President, Assistant Vice President, Trust Officer, or more senior officer of the Trust Administrator who is authorized to act for the Trust Administrator in matters relating to the Trust and to be acted upon by the
Trust Administrator pursuant to the Transfer and Servicing Agreement and who is identified on the list of Authorized Officers delivered by the Trust Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter). 

     Bank: U.S. Bank Trust National Association, in its individual capacity and not as Owner Trustee under this Agreement. 

     Certificate: Any Ownership Certificate issued pursuant to this Agreement. 

     Certificate of Trust: The Certificate of Trust to be filed by the Owner Trustee for the Trust pursuant to Section 3810(a) of the Delaware Trust Statute in the form of
Exhibit C hereto. 

     Certificate Paying Agent: Initially, the Trust Administrator, in its capacity as Certificate Paying Agent, or any successor to the Trust Administrator in such
capacity. 

     Certificate Register: The register maintained by the Certificate Registrar in which the Certificate Registrar shall provide for the registration of the Certificates
and of transfers and exchanges of such Certificates. 

     Certificate Registrar: Initially, the Trust Administrator, in its capacity as Certificate Registrar, or any successor to the Trust Administrator in such capacity.

     Certificateholder or Holder: The Person in whose name a Certificate is registered in the Certificate Register. 

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

     Collateral: As defined in the Indenture. 

     Corporate Trust Office: With respect to (i) the Owner Trustee, the corporate trust administration office of the Owner Trustee located at U.S. Bank Corporate Trust
Services, 60 Livingston Avenue, St. Paul, Minnesota 55107, or at such other address as the Owner Trustee may designate by notice to the Trust Administrator, or the principal office of any successor Owner Trustee (the address (which shall be in the
State of Delaware) of which the successor owner trustee will notify the Certificateholders); (ii) the Trust Administrator, the principal corporate trust office of the Trust Administrator at which, at any particular time, its corporate trust business
shall be administered, which office at the date hereof for purposes of transfers and exchanges and for presentment and surrender of the Certificates and for payment thereof is located at Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Group (Fieldstone 2007-1), and for all other purposes is located at Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046, Attention: Client Service Manager (Fieldstone 2007-1) (or for
overnight deliveries, at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Client Service Manager (Fieldstone 2007-1)); and (iii) 

2 

the Certificate Registrar, the principal office of the Certificate Registrar at which at any particular time its corporate trust business shall be administered, which office at the date of execution of this Agreement is located at
the Corporate Trust Office of the Trust Administrator, or at such other address as the Certificate Registrar may designate from time to time by notice to the Securityholders and the Trust, or the principal corporate trust office of any successor
Certificate Registrar at the address designated by such successor Certificate Registrar by notice to the Securityholders and the Trust. 

     Delaware Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del.C. Section 3801 et seq., as the
same may be amended from time to time. 

     Depositor: Fieldstone Mortgage Investment Corporation, a Maryland corporation. ERISA: The Employee Retirement Income Security Act of 1974,
as amended. 

     Expenses: The meaning specified in Section 7.02. 

     Indenture: The indenture dated as of April 1, 2007, between the Issuing Entity, the Indenture Trustee and the Trust Administrator, as such may be amended or
supplemented from time to time. 

     Indenture Trustee: Wells Fargo Bank, N.A., not in its individual capacity but solely as Indenture Trustee, or any successor in interest. 

     Initial Holder: Fieldstone Mortgage Ownership Corp., or any successor in interest, in the case of the Ownership Certificate. 

     Issuing Entity: Fieldstone Mortgage Investment Trust, Series 2007-1.

     Net Proceeds from the Notes: The proceeds received by the Trust from time to time from the issuance and sale of its Notes, less the costs and expenses incurred in
connection with the issuance and sale of such Notes. 

     Non-U.S. Person: Any person other than a “United States person” as defined in Section 7701(a)(30) of the Code. 

     Note: Any of the Class 1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8, Class M9 or Class M10
Notes issued pursuant to the Indenture. 

     Noteholder: A Person in whose name a Note is registered on the Note Register. 

     Officer: Those officers of the Trust referred to in Article XI. 

     Opinion of Counsel: One or more written opinions of counsel who may, except as otherwise expressly provided in this Agreement, be employees of or counsel to the
Depositor and who shall be satisfactory to the Owner Trustee and the Trust Administrator, which opinion shall be addressed to the Owner Trustee, the Trust Administrator and each Swap Counterparty. 

3 

     Original Trust Agreement: As defined in the recitals hereof. 

     Ownership Certificate: An equity certificate representing a 100% undivided beneficial interest in the Trust in substantially the form annexed hereto as part of Exhibit
A. 

     Owner Trustee: U.S. Bank Trust National Association, a national banking association, and any successor in interest, not in its individual capacity, but solely as owner
trustee under the Trust Agreement. 

     Percentage Interest: With respect to any Ownership Certificate, the percentage set forth on the face thereof. 

     Permitted Transferee: Means an entity for federal income tax purposes that qualifies as (a) a single REIT, (b) a Qualified REIT Subsidiary of such REIT, or (c) an
entity that is disregarded for federal income tax purposes that is wholly owned by such related REIT or related Qualified REIT Subsidiary. 

     Proposer: The Certificateholder making a written request pursuant to Section 5.07. 

     Prospective Holder: Each prospective purchaser and any subsequent transferee of the Ownership Certificate. 

     Qualified REIT Subsidiary: A direct or indirect 100% owned subsidiary of a REIT that satisfies the requirements of Section 856(i) of the Code. 

     REIT: A real estate investment trust within the meaning of Sections 856 and 857 of the Code. 

     Responsible Officer: With respect to (i) the Owner Trustee, any officer within the Corporate Trust Office of the Owner Trustee with direct responsibility for the
administration of the Trust and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of, and familiarity with, the particular subject; and (ii) the Trust Administrator,
any officer within the Corporate Trust Office of the Trust Administrator with direct responsibility for the administration of the Trust and also, with respect to a particular matter, any other officer to whom such matter is referred because of such
officer’s knowledge of, and familiarity with, the particular subject. 

     Retained Notes: Those certain classes, or portions of certain classes, of Notes, in which FIC, as the owner of the Ownership Certificate, either directly or indirectly
through one or more of its Qualified REIT Subsidiaries or entities that are disregarded for United States federal income tax purposes that are wholly owned by the related REIT or a related Qualified REIT Subsidiary, acquires beneficial ownership.

     Secretary of State: The Secretary of State of the State of Delaware. 

     Security: Any of the Certificates or Notes. 

     Securityholder: Any Certificateholder or Noteholder. 

4 

     Seller: Fieldstone Investment Corporation, a Maryland corporation. 

     Transfer and Servicing Agreement: The Transfer and Servicing Agreement dated as of April 1, 2007, by and among the Trust, the Depositor, the Trust Administrator,
Litton Loan Servicing LP, as servicer, the Seller and the Indenture Trustee, as such may be amended or supplemented from time to time. 

     Trust: The trust established pursuant to this Agreement which shall carry on its business operations under the name of “Fieldstone Mortgage Investment Trust,
Series 2007-1.” 

     Trust Administrator: Wells Fargo Bank, N.A., or any successor in interest. 

     Section 1.02. Other Definitional Provisions.

     Capitalized terms used herein and not defined herein shall have the same meanings assigned to them in the Transfer and Servicing Agreement or in the Indenture, as applicable. 

     (a) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. 

     (b) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control. 

     (c) The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term
“including” shall mean “including without limitation.” 

     (d) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine
as well as the feminine and neuter genders of such terms. 

     (e) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns. 

5 

ARTICLE II 

ORGANIZATION 

     Section 2.01. Name. The trust established under this Agreement shall be referred to as “Fieldstone
Mortgage Investment Trust, Series 2007-1,” in which name the Owner Trustee and the Officers may conduct the activities contemplated hereby, including the making and executing of contracts and other instruments on behalf of the Trust and sue and
be sued. 

     Section 2.02. Office. The principal office of the Trust shall be in care of the Owner Trustee, at its
Corporate Trust Office. The Trust shall also have an office in care of the Trust Administrator at its Corporate Trust Office. 

     Section 2.03. Purpose and Powers. The Trust shall have the power and authority to engage in any of the
following activities: 

     (a) to issue the Notes pursuant to the Indenture and the Certificates pursuant to this Agreement and to sell, transfer and exchange such Notes
and Certificates; 

     (b) with the proceeds of the sale of the Notes and the Certificates, to pay the organizational, start-up and transactional expenses of the
Trust and to pay the balance of the Net Proceeds from the Notes to the Depositor in consideration of the transfer to the Trust of the Collateral; 

     (c) to assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant to the Indenture and to hold, manage and distribute to
the Certificateholders pursuant to the terms of the Transfer and Servicing Agreement any portion of the Collateral released from the lien of, and remitted to the Trust pursuant to, the Indenture; 

     (d) to enter into and perform its obligations under the Operative Agreements and the Swap Agreement to which it is to be a party; 

     (e) to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing
or are incidental thereto or connected therewith; and 

     (f) subject to compliance with the Operative Agreements, to engage in such other activities as may be required in connection with conservation
of the Trust Estate and the making of distributions and payments to the Certificateholders and the Noteholders. 

     The Trust is hereby authorized to engage in the foregoing activities. The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by
the terms of this Agreement or the Operative Agreements. 

     Section 2.04. Appointment of the Owner Trustee. The Depositor hereby appoints the Bank to act as owner trustee
(the “Owner Trustee”) of the Trust effective as of the date hereof to have all the rights, powers and duties set forth herein with respect to accomplishing the purposes of the Trust. 

6 

     The Owner Trustee is hereby authorized to execute this Agreement, the Indenture, the Transfer and Servicing Agreement and any other Operative Agreement on behalf of the Trust. The Owner Trustee is
hereby authorized to take all actions required or permitted to be taken by it in accordance with the terms of this Agreement. 

     Section 2.05. Initial Capital Contribution; Declaration of Trust. 

     (a) The Depositor hereby sells, assigns, transfers, conveys and sets over to the Trust, as of the date hereof, the sum of $1. The Owner
Trustee hereby acknowledges receipt in trust from the Depositor, as of the Closing Date, of the foregoing contribution, which shall constitute the initial corpus of the Trust Estate. The Depositor shall pay organizational expenses of the Trust as
they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee. 

     (b) The Owner Trustee hereby declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the
use and benefit of the Certificateholders, subject to the obligations of the Trust under the Operative Agreements. It is the intention of the parties hereto that the Trust constitute a statutory trust under the Delaware Trust Statute and that this
Agreement constitute the governing instrument of such statutory trust. No later than the Closing Date, the Owner Trustee shall cause the filing of the Certificate of Trust with the Secretary of State. Except as otherwise provided in this Agreement,
the rights of the Certificateholders will be those of beneficial owners of the Trust. 

     Section 2.06. Issuance of Initial Certificates. Upon the formation of the Trust by the initial contribution by
the Depositor pursuant to Section 2.05, the Owner Trustee will issue the Certificates to the Initial Holders. 

     Section 2.07. Liability of the Ownership Certificate Holder. The Ownership Certificate Holder shall be liable
directly to and shall indemnify any injured party for all losses, claims, damages, liabilities and expenses of the Trust (including Expenses, to the extent not paid out of the Trust Estate); provided, however, that the Ownership Certificate Holder shall not be liable for payments required to be made to or for any losses incurred by a Noteholder in the capacity of an
investor in the Notes. In addition, any third party creditors of the Trust (other than in connection with the obligations described in the following sentence for which the Ownership Certificate Holder shall be liable) shall be deemed third party
beneficiaries of this paragraph. The Ownership Certificate Holder shall be liable for any entity level taxes imposed on the Trust. The obligations of the Ownership Certificate Holder under this paragraph shall be evidenced by the Ownership
Certificate.

     Section 2.08. Situs of Trust. The Trust will be located in the State of Delaware. All bank accounts maintained
by the Owner Trustee on behalf of the Trust shall be located in the States of Delaware, New York or the jurisdiction where the Trust Administrator maintains bank accounts with respect to collections on the Collateral. The only office of the Trust
will be as described in Section 2.02 hereof. The Trust shall not have any employees; provided, however, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware. Payments will be received by the Trust only in Delaware, New York, the jurisdiction in which the Trust Administrator maintains the Collection
Account or such 

7 

other jurisdiction designated by the Depositor, and payments will be made by the Trust only from the Collection Account or from Delaware, New York or such other jurisdiction designated by the Depositor. 

     Section 2.09. Title to Trust Property. 

     (a) Subject to the Indenture, title to all of the Trust Estate shall be vested at all times in the Trust as a separate legal entity until this
Agreement terminates pursuant to Article VIII hereof; provided, however, that if the laws of any jurisdiction require that title to
any part of the Trust Estate be vested in the trustee of the Trust, then title to that part of the Trust Estate shall be deemed to be vested in the Owner Trustee or any co-trustee or separate trustee, as the case may be, appointed pursuant to
Article IX of this Agreement. 

     (b) The Certificateholders shall have beneficial but not legal title to any part of the Trust Estate. No transfer by operation of law or
otherwise of any interest of the Certificateholders shall operate to terminate this Agreement or the trusts created hereunder or entitle any transferee to an accounting or to the transfer to it of any part of the Trust Estate. 

     Section 2.10. Representations and Warranties of the Depositor. The Depositor hereby represents and warrants to
the Owner Trustee, the Swap Counterparty and the Trust Administrator as of the Closing Date, as follows: 

     (a) The Depositor is duly organized and validly existing as a corporation in good standing under the laws of the State of Maryland, with power
and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted and had at all relevant times, and now has, power, authority and the legal right to acquire and own the
Mortgage Loans. 

     (b) The Depositor is duly qualified to do business as a foreign corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications. 

     (c) The Depositor has the power and authority to execute and deliver any Operative Agreement to which it is a party and to carry out its terms;
the Depositor has full power and authority to sell and assign the Collateral to be sold and assigned to and deposited with the Trust and the Depositor has duly authorized such assignment and deposit to the Trust by all necessary corporate action;
and the execution, delivery and performance of this Agreement or any other Operative Agreement to which it is a party has been duly authorized by the Depositor by all necessary corporate action and, assuming the due authorization, execution and
delivery of each such agreement by the other parties thereto, each such agreement constitutes a valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, except as enforcement thereof may be
subject to or limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws relating to or affecting creditors’ rights generally and by general equitable principles. 

     (d) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof and thereof do not conflict
with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, 

8 

the certificate of incorporation or by-laws of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any lien upon any
of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Operative Agreements); nor violate any law or, to the best of the Depositor’s knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. 

     (e) There are no proceedings or investigations, pending or, to the best knowledge of the Depositor, threatened before any court, regulatory
body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties: (i) asserting the invalidity of this Agreement or any other Operative Agreement to which the Depositor is a party, (ii)
seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Operative Agreement to which the Depositor is a party or (iii) seeking any determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement or any other Operative Agreement to which the Depositor is a party. 

     (f) The representations and warranties of the Depositor made pursuant to the Transfer and Servicing Agreement are true and correct. 

     (g) This Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended, and the Trust is not required to be
registered as an “investment company” under the Investment Company Act of 1940, as amended. 

     Section 2.11. Tax Treatment. The Depositor, the Owner Trustee and the Initial Holder intend that the Trust be
treated for federal income tax purposes as a Qualified REIT Subsidiary and agree to take no action inconsistent with such treatment. The Trust Administrator will perform the calculation of accrual of original issue discount and the amortization of
premium on the Securities. The Seller will prepare and file the Trust’s income tax returns, if applicable, and will make any other necessary tax filings under the Code. 

     Section 2.12. Investment Company. Neither the Depositor nor any holder of a Certificate shall take any action
which would cause the Trust to become an “investment company” which would be required to register under the Investment Company Act of 1940, as amended. 

ARTICLE III 

THE CERTIFICATES AND TRANSFERS OF INTERESTS 

     Section 3.01. The Certificates. The Ownership Certificate shall initially be issued as a single certificate in
definitive, fully registered form and shall initially be registered in the name of the applicable Initial Holder. No Ownership Certificate shall be issued in authorized denominations of less than a 100% Percentage Interest in such Certificate. The
Certificates shall be executed on behalf of the Trust by manual or facsimile signature of an Authorized Officer of the Owner Trustee and authenticated in the manner provided in Section 3.02. Each Certificate bearing the manual signatures of
individuals who were, at the time when such signatures shall 

9 

have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefit of this Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of each such Certificate or did not hold such offices at the date of authentication and delivery of each such Certificate. A Person shall become a Certificateholder and shall be entitled to the rights and subject
to the obligations of a Certificateholder hereunder upon such Person’s acceptance of a Certificate duly registered in such Person’s name pursuant to Section 3.03. 

     Section 3.02. Execution, Authentication and Delivery of the Certificates. Concurrently with the sale of the
Collateral to the Trust pursuant to the Transfer and Servicing Agreement, the Owner Trustee shall cause the Certificates issued hereunder to be executed and authenticated on behalf of the Trust and authenticated and delivered to or upon the written
order of the Depositor, signed by its chairman of the board, its president or any vice president, without further corporate action by the Depositor. No Certificate shall entitle its Holder to any benefit under this Agreement or be valid for any
purpose unless there shall appear on such Certificate a certificate of authentication substantially in the form set forth as part of Exhibit A hereto, executed by the Owner Trustee or the Certificate Registrar, as the Owner Trustee’s
authenticating agent, by manual signature; such authentication shall constitute conclusive evidence that such Certificate shall have been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication.

     Section 3.03. Registration of and Limitations on Transfers and Exchanges of the Certificates. The Certificate Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 3.08, a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Certificate Registrar shall provide for the registration of the Certificates and of transfers and exchanges of the Certificates as set forth herein; provided,
however, that no Ownership Certificate shall be issued in any such transfer and exchange representing less than a 100% Percentage Interest in such Certificate, and provided, further, that no Ownership Certificate shall be issued in any such transfer and exchange except in accordance with the provisions and
conditions set forth below in this Section 3.03. The Trust Administrator shall be the initial Certificate Registrar. If the Certificate Registrar resigns or is removed, the Owner Trustee, with the consent of the Depositor, shall appoint a successor
Certificate Registrar. 

     Subject to satisfaction of the conditions set forth below, upon surrender for registration of transfer of a Certificate at the office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver (or cause the Trust Administrator as its authenticating agent to authenticate and deliver), in the name of the designated transferee, a new Certificate evidencing the Percentage Interest of the Certificate so
surrendered and dated the date of authentication by the Owner Trustee or the Certificate Registrar. 

     Every Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by each Certificateholder or such Certificateholder’s attorney duly authorized in writing. Each Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of
by the Certificate Registrar in accordance with its customary practice. 

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     No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Owner Trustee or the Certificate Registrar 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 a Certificate or any other expense arising as a result of any registration of transfer or exchange. 

     The preceding provisions of this Section notwithstanding, the Owner Trustee shall not make and the Certificate Registrar shall not register transfer or exchanges of a Certificate for a period of 15
days preceding the due date for any payment with respect to such Certificate. 

     No transfer of a Certificate shall be made unless such transfer is exempt from the registration requirements of the Securities Act and any applicable state securities laws or is made in accordance
with said Act and laws. Except in the case of an initial transfer to an Initial Holder, in the event of any such transfer, the Certificate Registrar or the Depositor shall prior to such transfer require the transferee to execute (i) an investment
letter (in the form attached hereto as Exhibit D-1) certifying to the Trust, the Owner Trustee, the Trust Administrator, the Certificate Registrar and the Depositor that such transferee is a “qualified institutional buyer” under Rule 144A
under the Securities Act, or (ii) an investment letter (in the form attached hereto as Exhibit D-2) certifying to the Trust, the Owner Trustee, the Trust Administrator, the Certificate Registrar and the Depositor that such transferee is an
“accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of the Securities Act), and any expense associated with the preparation and execution of any such investment letter shall not be an expense of the Trust, the Owner
Trustee, the Trust Administrator, the Certificate Registrar or the Depositor. A Certificateholder desiring to effect the transfer of a Certificate shall, and does hereby agree to, indemnify the Trust, the Owner Trustee, the Trust Administrator, the
Certificate Registrar and the Depositor against any and all liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws. 

     Except in the case of an initial transfer to an Initial Holder, no transfer of a Certificate shall be made unless the Certificate Registrar shall have received a representation letter (substantially
in the form attached hereto as Exhibit D-1 or D-2) from the proposed transferee of such Certificate to the effect that such proposed transferee is not an employee benefit plan or other retirement arrangement subject to Section 406 of ERISA, or
Section 4975 of the Code or any substantially similar applicable law, or a Person acting on behalf of or using the assets of any such plan, which representation letter shall not be an expense of the Trust, the Owner Trustee, the Trust Administrator,
the Certificate Registrar or the Depositor. In addition, any Retained Notes will be subject to the same ERISA restrictions and consequences discussed above applicable to the Ownership Certificate unless either (a) the Retained Notes are sold or
transferred to a party that is a taxable REIT subsidiary or is not affiliated with the owner of the Ownership Certificate and at the time of such sale or transfer: (i) the owner of the Ownership Certificate is a Permitted Transferee; (ii) no
modifications have been made to the transaction documents; (iii) the respective ratings of the Retained Notes as of the date of such sale or transfer are not lower than the ratings of such Retained Notes as of the closing date; and (iv) no adverse
changes have been made to (or that would adversely affect the application of) the legal authorities applicable to the closing date tax opinion or (b) the holder of the Retained Notes otherwise receives a tax opinion from a law firm generally
recognized to be qualified to opine concerning the tax aspects of asset securitization that (i) the Retained Notes “will be debt” and 

11 

(ii) after the sale or transfer, the Trust will continue to qualify as a Qualified REIT Subsidiary for federal income tax purposes. 

     Prior to and as a condition of the registration of any transfer, sale or other disposition of the Ownership Certificate (except for any transfer, sale or other disposition which does not result in a
change in the beneficial owner of the Ownership Certificate for federal income tax purposes), each Initial Holder of an Ownership Certificate and each Prospective Holder of an Ownership Certificate shall represent and warrant in writing, in the case
of each Initial Holder, in substantially the form set forth in Exhibit E hereto, and in the case of each Prospective Holder, in substantially the form set forth in Exhibit F hereto, to the Owner Trustee, the Trust Administrator and the Certificate
Registrar and any of their respective successors that: 

     (i) Such Person is duly authorized to purchase the Ownership Certificate and its purchase of investments having the characteristics of the
Ownership Certificate is authorized under, and not directly or indirectly in contravention of, any law, charter, trust instrument or other operative document, investment guidelines or list of permissible or impermissible investments that is
applicable to the investor; 

     (ii) Such Person understands that each holder of an Ownership Certificate, by virtue of its acceptance thereof, assents to the terms,
provisions and conditions of the Agreement;

     (iii) Such Person is a REIT, a Qualified REIT Subsidiary, or an entity that is disregarded for federal income tax purposes that is wholly owned
by a REIT or a Qualified REIT Subsidiary; and

     (iv) Such Person will only transfer the Ownership Certificate to a person that is a Permitted Transferee.  

     Notwithstanding the foregoing, the Ownership Certificate may be pledged or transferred to a lender or repurchase agreement counterparty in a repurchase agreement or secured lending transaction that
qualifies as a borrowing for federal income tax purposes.

     In addition, any Retained Notes will be subject to the same requirements, restrictions and consequences discussed in the preceding sentence applicable to the Ownership Certificate unless either (a)
the Retained Notes are sold or transferred to a party that is a taxable REIT subsidiary or is not affiliated with the owner of the Ownership Certificate and at the time of such sale or transfer: (i) the owner of the Ownership Certificate is a
Permitted Transferee; (ii) no modifications have been made to the transaction documents; (iii) the respective ratings of the Retained Notes as of the date of such sale or transfer are not lower than the ratings of such Retained Notes as of the
closing date; and (iv) no adverse changes have been made to (or that would adversely affect the application of) the legal authorities applicable to the closing date tax opinion or (b) the holder of the Retained Notes otherwise receives a tax opinion
from a law firm generally recognized to be qualified to opine concerning the tax aspects of asset securitization that (i) the Retained Notes “will be debt” and (ii) after the sale or transfer, the Trust will continue to qualify as a
Qualified REIT Subsidiary for federal income tax purposes. 

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     The Owner Trustee shall cause each Certificate to contain a legend, substantially similar to the applicable legends provided in Exhibit A hereto, stating that transfer of such Certificate is subject
to certain restrictions and referring prospective purchasers of the Certificates to this Section 3.03 with respect to such restrictions. 

     Section 3.04. Lost, Stolen, Mutilated or Destroyed Certificate. If (a) a mutilated Certificate is surrendered
to the Certificate Registrar, or (b) the Certificate Registrar receives evidence to its satisfaction that a Certificate has been destroyed, lost or stolen, and there is delivered to the Certificate Registrar proof of ownership satisfactory to the
Certificate Registrar, together with such security or indemnity as required by the Certificate Registrar and the Owner Trustee to save each of them harmless, then in the absence of notice to the Certificate Registrar or the Owner Trustee that such
Certificate has been acquired by a protected purchaser, the Owner Trustee shall execute on behalf of the Trust, and the Owner Trustee or the Certificate Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and Percentage Interest. In connection with the issuance of any new Certificate under this Section 3.04, the Owner Trustee or the Certificate Registrar may require the payment of
a sum sufficient to cover any expenses of the Owner Trustee or the Certificate Registrar (including any fees and expenses of counsel) and any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section 3.04 shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time. 

     Section 3.05. Persons Deemed Certificateholders. Prior to due presentation of a Certificate for registration
of transfer, the Owner Trustee, the Certificate Registrar or any Certificate Paying Agent may treat any Certificateholder as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 4.02 and for all other purposes
whatsoever, and none of the Trust, the Owner Trustee, the Certificate Registrar or any Certificate Paying Agent shall be bound by any notice to the contrary. 

     Section 3.06. Access to List of Certificateholders’ Names and Addresses. The Certificate Registrar shall
furnish or cause to be furnished to the Depositor or the Owner Trustee, within 15 days after receipt by the Certificate Registrar of a written request therefor from the Depositor or the Owner Trustee, in such form as the Depositor or the Owner
Trustee, as the case may be, may reasonably require, the name and address of each Certificateholder as of the most recent Record Date. A Certificateholder, by receiving and holding a Certificate, shall be deemed to have agreed not to hold any of the
Trust, the Depositor, the Certificate Registrar and the Owner Trustee accountable or liable for damages by reason of the disclosure of its name and address, regardless of the source from which such information was derived. 

     Section 3.07. [Reserved] 

     Section 3.08. Maintenance of Office or Agency. The Certificate Registrar on behalf of the Trust, shall
maintain an office or offices or agency or agencies where the Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Owner Trustee in respect of the Certificates and the Operative
Agreements may be served. The Certificate Registrar shall give the Owner Trustee prompt notice, in writing, of any such 

13 

notice or demand. The Certificate Registrar initially designates the Corporate Trust Office of the Trust Administrator as its office for such purposes. The Certificate Registrar shall give prompt written notice to the Depositor,
the Owner Trustee and the Certificateholders of any change in the location of the Certificate Register or any such office or agency. 

Section 3.09. Certificate Paying Agent. 

     (a) The Owner Trustee may appoint, and hereby appoints, the Trust Administrator as Certificate Paying Agent under this Agreement. The
Certificate Paying Agent shall make distributions to each Certificateholder from the Collection Account pursuant to Section 4.02 hereof and Sections 5.08 and 6.02 of the Transfer and Servicing Agreement and, upon request, shall report the amounts of
such distributions to the Owner Trustee. The Certificate Paying Agent shall have the revocable power to withdraw funds from the Collection Account for the purpose of making the distributions referred to above. The Trust Administrator hereby accepts
such appointment and further agrees that it will be bound by the provisions of this Agreement and the Transfer and Servicing Agreement relating to the Certificate Paying Agent and shall: 

     (i) hold all sums held by it for the payment of amounts due with respect to the Certificates in trust for the benefit of the Person entitled
thereto until such sums shall be paid to such Person or otherwise disposed of as herein provided; 

     (ii) give the Owner Trustee notice of any default by the Trust of which a Responsible Officer of the Trust Administrator has actual knowledge
in the making of any payment required to be made with respect to the Certificates; 

     (iii) at any time during the continuance of any such default, upon the written request of the Owner Trustee forthwith pay to the Owner Trustee
on behalf of the Trust all sums so held in Trust by such Certificate Paying Agent; 

     (iv) immediately resign as Certificate Paying Agent and forthwith pay to the Owner Trustee on behalf of the Trust all sums held by it in trust
for the payment of the Certificates if at any time it ceases to meet the standards under this Section 3.09  required to be met by the Certificate Paying Agent at the time of its appointment; and 

     (v) not institute bankruptcy proceedings against the Trust in connection with this Agreement.  

     (b) In the event that the Trust Administrator shall no longer be the Certificate Paying Agent hereunder, the Owner Trustee, with the consent of
the Depositor, shall appoint a successor to act as Certificate Paying Agent (which shall be a bank or trust company). The Owner Trustee shall cause such successor Certificate Paying Agent or any additional Certificate Paying Agent appointed by the
Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such successor Certificate Paying Agent or additional Certificate Paying Agent shall agree with the Owner Trustee that as Certificate Paying Agent, such successor
Certificate Paying Agent or additional Certificate Paying Agent will hold all sums, if any, held by it for payment in trust for the benefit of each Certificateholder entitled thereto until such sums shall be paid to such Certificateholder. The
Certificate Paying Agent shall return all unclaimed funds to the Owner Trustee, and upon removal of a Certificate Paying Agent, such Certificate Paying Agent 

14 

shall also return all funds in its possession to the Owner Trustee. The provisions of Sections 5.03, 5.04, 6.01, 6.05, 6.07, 6.08, 7.01 and 7.02 shall apply to the Trust Administrator also in its role as Certificate Paying Agent
for so long as the Trust Administrator shall act as Certificate Paying Agent and, to the extent applicable, to any other Certificate Paying Agent appointed hereunder. Any reference in this Agreement to the Certificate Paying Agent shall include any
co-paying agent unless the context requires otherwise. 

     Section 3.10. Initial Beneficiary. Upon the formation of the Trust by the contribution by the Depositor
pursuant to Section 2.05 and until the issuance of the Certificates, the Depositor shall be the sole beneficiary of the Trust. 

ARTICLE IV 

APPLICATION OF TRUST FUNDS; CERTAIN DUTIES 

     Section 4.01. Collection Account. All of the right, title and interest of the Trust in all funds on deposit
from time to time in the Collection Account and in all proceeds thereof shall be held for the benefit of each Certificateholder and such other persons entitled to payments therefrom. Except as otherwise expressly provided herein or in the Transfer
and Servicing Agreement, the Collection Account shall be under the sole dominion and control of the Owner Trustee for the benefit of the Certificateholders. 

     The Collection Account shall be subject to and established and maintained in accordance with the applicable provisions of the Transfer and Servicing Agreement and the Indenture, including, without
limitation, the provisions of Sections 5.08 and 6.02 of the Transfer and Servicing Agreement regarding distributions from the Collection Account. 

     Section 4.02. Application of Trust Funds. 

     (a) On each Payment Date, the Owner Trustee shall direct the Certificate Paying Agent to distribute to each Certificateholder, from amounts on
deposit in the Collection Account, the distributions as provided in Sections 5.08 and 6.02 of the Transfer and Servicing Agreement with respect to such Payment Date. The Owner Trustee hereby directs the Certificate Paying Agent to distribute on each
Payment Date to each Certificateholder amounts on deposit in the Collection Account in accordance with Sections 5.08 and 6.02 of the Transfer and Servicing Agreement and the Certificate Paying Agent hereby acknowledges such direction. 

     (b) All payments to be made under this Agreement by the Certificate Paying Agent shall be made only from the income and proceeds, including Net
Proceeds from the Notes, of the Trust Estate and only to the extent that the Certificate Paying Agent has received such income or proceeds. The Bank shall not be liable to any Certificateholder, the Indenture Trustee or the Trust Administrator for
any amounts payable pursuant to this Section 4.02 except to the extent that non-payment is due to the Owner Trustee’s acts or omissions amounting to willful misconduct or gross negligence. 

     (c) Distributions to any Certificateholder shall be subordinated to the creditors of the Trust, including, without limitation, the Noteholders.

15 

     Section 4.03. Method of Payment. Subject to Section 8.01(c), distributions required to be made to any
Certificateholder on any Payment Date as provided in Section 4.02 shall be made to the each Person who was a Certificateholder on the preceding Record Date either by wire transfer, in immediately available funds, to the account of each such
Certificateholder at a bank or other entity having appropriate facilities therefor, if such respective Certificateholder shall have provided to the Certificate Registrar appropriate written instructions at least five Business Days prior to such
Payment Date or, if not, by check mailed to each such Certificateholder at the respective address of such Certificateholder appearing in the Certificate Register. 

     Section 4.04. [Reserved] 

     Section 4.05. Segregation of Moneys; No Interest. Moneys received by or on behalf of the Owner Trustee
hereunder and deposited into the Collection Account will be segregated except to the extent required otherwise by law or the provisions of the Transfer and Servicing Agreement. The Owner Trustee shall not be liable for payment of any interest in
respect of such moneys. 

ARTICLE V 

AUTHORITY AND DUTIES OF THE OWNER TRUSTEE; ACTION BY 

CERTIFICATEHOLDERS 

     Section 5.01. General Authority. The Owner Trustee is authorized and directed to execute and deliver the
Notes, the Certificates, the other Operative Agreements to which the Trust is to be a party, each certificate or other document attached as an exhibit to or contemplated by the Operative Agreements to which the Trust is to be a party and any
amendment or other agreement or instrument described herein, all as approved by the Depositor, as evidenced conclusively by the Owner Trustee’s execution thereof, and, on behalf of the Trust, to direct the Trust Administrator to authenticate
the Notes. In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Trust pursuant to the Operative Agreements. 

     Section 5.02. General Duties. 

     (a) It shall be the duty of the Owner Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of
this Agreement and the other Operative Agreements to which the Trust is a party and to administer the Trust in the interest of the Certificateholders, subject to the Operative Agreements and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the Operative Agreements to the extent the Trust Administrator has agreed in the Transfer and Servicing Agreement
or this Agreement, respectively, to perform any act or to discharge any duty of the Owner Trustee or the Trust hereunder or under any Operative Agreement, and the Owner Trustee shall not be held liable for the default or failure of the Trust
Administrator to carry out its obligations under the this Agreement or the Transfer and Servicing Agreement or any other Operative Agreement, respectively; and 

16 

     (b) It shall be the duty of the Depositor under the Transfer and Servicing Agreement to obtain and preserve the Trust’s qualification to
do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument and agreement included in the Trust Estate. It
shall be the duty of the Owner Trustee to cooperate with the Depositor with respect to such matters. 

Section 5.03. Action Upon Instruction. 

     (a) Subject to Article V and in accordance with the terms of the Operative Agreements, the Ownership Certificate Holder may by written
instruction direct the Owner Trustee in the management of the Trust, but only to the extent consistent with the limited purpose of the Trust. Such direction may be exercised at any time by written instruction of the Ownership Certificate Holder
pursuant to this Article V. 

     (b) Notwithstanding the foregoing, the Owner Trustee shall not be required to take any action hereunder or under any Operative Agreement if the
Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any Operative Agreement or is
otherwise contrary to law. 

     (c) Whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement
or under any other Operative Agreement, or in the event that the Owner Trustee is unsure as to the application of any provision of this Agreement or any other Operative Agreement or any such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may promptly give notice (in such form as shall be appropriate under the circumstances) to the Ownership Certificate Holder requesting instruction as to the course of action to be adopted,
and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Ownership Certificate Holder, the Owner Trustee shall not be liable on account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Agreement or any other Operative Agreement, as it shall deem to be in the best interests of each Certificateholder, and the Owner Trustee shall have no liability to any Person for such action or
inaction. 

     Section 5.04. No Duties Except as Specified under Specified Documents or in Instructions. The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Trust Estate, or to
otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee or the Trust is a party, except as expressly provided (i) in accordance with the powers granted to and the
authority conferred upon the Owner Trustee pursuant to this Agreement, and (ii) in accordance with any document or 

17 

instruction delivered to the Owner Trustee pursuant to Section 5.03; and no implied duties or obligations shall be read into this Agreement or any Operative Agreement against the Owner Trustee. Without limiting the foregoing,
unless specifically enumerated in any Operative Agreement to which the Owner Trustee is party, the Owner Trustee (i) shall have no duty or obligation to execute, file or deliver, or cause the preparation, filing or delivery by other persons of, any
such documents, reports, filings, instruments, certificates or opinions as it shall be the duty of the Trust to prepare, file or deliver pursuant to the Operative Agreements, (ii) shall have no duty or obligation to take, or refrain from taking, any
action that is the duty or the obligation of the Trust pursuant to the Operative Agreements and (iii) shall have no duty or obligation to monitor the Trust’s duties and obligations pursuant to the Operative Agreements nor ensure that such
duties and obligations are fulfilled by the Trust. The Owner Trustee shall have no responsibility for filing any financing 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 the Trust or to prepare or file any Securities and Exchange Commission filing for the Trust or to record this Agreement or any Operative Agreement or to prepare or file any tax return for the Trust. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens on any part of the Trust Estate that result from actions by, or claims against the Bank that are not related to the
ownership or the administration of the Trust Estate. 

     Section 5.05. Restrictions. 

     (a) The Owner Trustee shall not take any action that is inconsistent with the purposes of the Trust set forth in Section 2.03. The Ownership
Certificate Holder shall not direct the Owner Trustee to take action that would violate the provisions of this Section 5.05. 

     (b) The Owner Trustee shall not, except as provided herein, convey or transfer any of the Trust’s properties or assets, including those
included in the Trust Estate, to any person unless such conveyance or transfer shall not violate the provisions of the Indenture. 

     Section 5.06. Prior Notice to the Certificateholders with Respect to Certain Matters. With respect to the
following matters, the Owner Trustee shall not take action unless at least 30 days before the taking of such action, the Owner Trustee shall have notified each Certificateholder in writing of the proposed action and each Certificateholder shall have
notified the Owner Trustee in writing prior to the 30th day after such notice is given that each Certificateholder has consented to such action or provided alternative direction: 

     (a) The initiation of any claim or lawsuit by the Trust (except claims or lawsuits brought in connection with the collection of cash
distributions due and owing under the Collateral) and the compromise of any action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of cash distributions due and owing
under the Collateral); 

     (b) the election by the Trust to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the
Delaware Trust Statute); 

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     (c) the amendment of the Indenture by a supplemental indenture or of this Agreement, the Swap Agreement or any other Operative Agreement in
circumstances where the consent of any Noteholder is required; 

     (d) the amendment or other change of the Indenture by a supplemental indenture or of this Agreement or any other Operative Agreement in
circumstances where the consent of any Noteholder is not required and such amendment materially adversely affects the interests of any Certificateholder; 

     (e) the amendment of the Transfer and Servicing Agreement in circumstances where the consent of any Securityholder is required; 

     (f) the amendment, change or modification of the Transfer and Servicing Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially and adversely affect the interests of any Certificateholder; 

     (g) the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of
a successor Certificate Registrar or Certificate Paying Agent or the consent to the assignment by the Note Registrar, Paying Agent, Indenture Trustee, Certificate Registrar or Certificate Paying Agent of its obligations under the Indenture or this
Agreement, as applicable; 

     (h) the consent to the calling or waiver of any default of any Operative Agreement; 

     (i) the consent to the assignment by the Indenture Trustee of its obligations under any Operative Agreement; 

     (j) except as provided in Article VIII hereof, dissolve, terminate or liquidate the Trust in whole or in part; 

     (k) the merger, conversion or consolidation of the Trust with or into any other entity, or conveyance or transfer of all or substantially all
of the Trust’s assets to any other entity; 

     (l) the incurrence, assumption or guaranty by the Trust of any indebtedness other than as set forth in this Agreement; 

     (m) the taking of any action which conflicts with any Operative Agreement or would make it impossible to carry on the ordinary business of the
Trust or change the Trust’s purpose and powers set forth in this Agreement; 

     (n) the confession of a judgment against the Trust; 

     (o) the possession of the Trust assets, or assignment of the Trust’s right to property, for other than a Trust purpose; or 

     (p) the lending of funds by the Trust to any entity. 

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     In addition, the Trust shall not commingle its assets with those of any other entity. The Trust shall maintain its financial and accounting books and records separate from those of any other entity.
Except as expressly set forth herein, the Trust shall pay its indebtedness, operating expenses and liabilities from its own funds, and the Trust shall neither incur any indebtedness nor pay the indebtedness, operating expenses and liabilities of any
other entity. Except as expressly set forth herein, the Trust shall not engage in any dissolution, liquidation, consolidation, merger or sale of assets. The Trust shall maintain appropriate minutes or other records of all appropriate actions and
shall maintain its office separate from the offices of the Depositor or any of its Affiliates. The Trust shall not engage in any business activity in which it is not currently engaged other than as contemplated by the Operative Agreements and
related documentation. The Trust shall not form, or cause to be formed, any subsidiaries and shall not own or acquire any asset other than as contemplated by the Operative Agreements and related documentation. Other than as contemplated by the
Operative Agreements and related documentation, the Trust shall not follow the directions or instructions of the Depositor. The Trust shall conduct its own business in its own name. The Trust shall observe all formalities required under the Delaware
Trust Statute. The Trust shall not hold out its credit as being available to satisfy the obligations of any other person or entity. The Trust shall not acquire the obligations or securities of its Affiliates or the Seller. Other than as contemplated
by the Operative Agreements and related documentation, the Trust shall not pledge its assets for the benefit of any other person or entity. The Trust shall correct any known misunderstanding regarding its separate identity. The Trust shall not
identify itself as a division of any other person or entity. 

     For accounting purposes, the Trust shall be treated as an entity separate and distinct from each Certificateholder. The pricing and other material terms of all transactions and agreements to which the
Trust is a party shall be intrinsically fair to all parties thereto. This Agreement is and shall be the only agreement among the parties thereto with respect to the creation, operation and termination of the Trust. 

     The Owner Trustee shall not have the power, except upon the written direction of the Ownership Certificate Holder, and to the extent otherwise consistent with the Operative Agreements, to (i) remove
or replace the Indenture Trustee, or (ii) institute a bankruptcy against the Trust. So long as the Indenture remains in effect, to the extent permitted by applicable law, the Ownership Certificate Holder shall have no power to commence, and shall
not commence, any bankruptcy with respect to the Trust or direct the Owner Trustee to commence any bankruptcy with respect to the Trust. 

     (q) The Owner Trustee shall not have the power, except upon the written direction of the Ownership Certificate Holder, to (i) remove the Trust
Administrator under the Transfer and Servicing Agreement pursuant to Section 7.10 thereof, (ii) appoint a successor Trust Administrator pursuant to Section 7.10 of the Transfer and Servicing Agreement, or (iii) except as expressly provided in the
Indenture, to sell the Collateral after the termination of the Indenture. The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed and authorized by the Ownership Certificate Holder.

     Section 5.07. Action by the Holder with Respect to Bankruptcy. The Owner Trustee shall not have the power to
commence or consent to a bankruptcy relating to the Trust without 

20 

the prior approval of the Ownership Certificate Holder and the delivery to the Owner Trustee by the Ownership Certificate Holder of a certificate certifying that the Ownership Certificate Holder reasonably believes that the Trust
is insolvent. This paragraph shall survive for one year and one day following termination of this Agreement. So long as the Indenture remains in effect, the Ownership Certificate Holder shall not have the power to institute, and shall not institute,
any bankruptcy with respect to the Trust or direct the Owner Trustee to take such action. 

     Section 5.08. Restrictions on the Ownership Certificate Holder’s Power. The Ownership Certificate Holder
shall not direct the Owner Trustee to take or to refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the Operative Agreements or would be
contrary to Section 2.03 nor shall the Owner Trustee be obligated to follow any such direction, if given. 

ARTICLE VI 

CONCERNING THE OWNER TRUSTEE 

     Section 6.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts hereby created and agrees
to perform the same but only upon the terms of this Agreement and the terms of the Transfer and Servicing Agreement. The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of the Trust Estate upon the terms of
this Agreement. The Bank shall not be answerable or accountable hereunder or under any other Operative Agreements under any circumstances, except (i) for its own willful misconduct, gross negligence or bad faith, (ii) in the case of the inaccuracy
of any representation or warranty contained in Section 6.04, (iii) for liabilities arising from the failure by the Bank to perform obligations expressly undertaken by it in the last sentence of Section 5.04, or (iv) for taxes, fees or other charges
based on or measured by any fees, commissions or compensation received by the Bank in connection with any of the transactions contemplated by this Agreement, any other Operative Agreements or the Notes. In particular, but not by way of limitation:

     (a) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Owner Trustee; 

     (b) The Bank shall not be liable with respect to any action taken or omitted to be taken by the Owner Trustee in accordance with the
instructions of any Certificateholder; 

     (c) No provision of this Agreement shall require the Bank to expend or risk funds or otherwise incur any financial liability in the performance
of any of the Owner Trustee’s rights or powers hereunder or under any other Operative Agreements if the Bank shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it; 

     (d) Under no circumstance shall the Bank be liable for indebtedness evidenced by or arising under any of the Operative Agreements, including
the principal of and interest on the Notes; 

     (e) The Bank shall not be liable with respect to any action taken or omitted to be taken by the Depositor, the Trust Administrator, the
Indenture Trustee, any Officer or the Certificate Paying Agent under this Agreement or any other Operative Agreement or otherwise 

21 

and the Bank shall not be obligated to perform or monitor the performance of any obligations or duties under this Agreement or the other Operative Agreements which are to be performed by the Certificate Paying Agent under this
Agreement, the Trust Administrator under the Transfer and Servicing, the Indenture Trustee under the Indenture or by any other Person under any of the Operative Agreements; and 

     (f) The Bank shall not be responsible for or in respect of the recitals herein, the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate or for or in respect of the validity or sufficiency of the Operative Agreements, other than the certificate of
authentication on the Certificates, and the Bank shall in no event assume or incur any liability, duty or obligation to any Noteholder, the Depositor or to any Certificateholder, other than as expressly provided for herein. 

     Section 6.02. Furnishing of Documents. The Owner Trustee will furnish to the Trust Administrator (for
distribution to each Certificateholder), promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner
Trustee hereunder or under the Operative Agreements unless the Trust Administrator shall have already received the same. 

     Section 6.03. Books and Records. The Owner Trustee shall keep or cause to be kept proper books of record and
account of all the transactions under this Agreement, including a record of the name and address of each Certificateholder. The Owner Trustee shall be deemed to have complied with this Section 6.03 by the appointment of the Trust Administrator and
the Certificate Paying Agent to perform the duties hereunder. 

     Section 6.04. Representations and Warranties. 

     (a) The Bank represents and warrants to the Depositor, for the benefit of each Certificateholder and the Swap Counterparty, as follows:

     (i) the Bank is a national banking association, duly organized and validly existing under the laws of the United States and has the power and
authority to execute, deliver and perform its obligations under this Agreement and (assuming due authorization, execution and delivery of this Agreement by the Depositor and Trust Administrator), has the power and authority as Owner Trustee to
execute and deliver the Operative Agreements and to perform its obligations thereunder and, assuming the due authorization, execution and delivery hereof by the other parties hereto, this Agreement constitutes a legal, valid and binding obligation
of the Bank or the Owner Trustee, as the case may be, enforceable against the Bank or the Owner Trustee, as the case may be, in accordance with its terms, except that (a) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought; 

22 

     (ii) the Bank has no reason to believe that anyone authorized to act on its behalf has offered any interest in and to the Trust for sale to, or
solicited any offer to acquire any of the same from, anyone; 

     (iii) the execution, delivery and performance by the Bank, either in its individual capacity or as Owner Trustee, as the case may be, of the
Operative Agreements will not result in any violation of, or be in any conflict with, or constitute a default under any of the provisions of any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, note or bond
purchase agreement, license, judgment, order or other agreement to which the Bank is a party or by which it or any of its properties is bound; 

     (iv) the execution and delivery by the Bank of this Agreement, and the performance of its duties as Owner Trustee hereunder, do not require the
consent or approval of, the giving of notice to, or the registration with, or the taking of any other action with respect to, any governmental authority or agency of the State of Delaware (except as may be required by the Delaware Trust Statute);
and 

     (v) there are no pending or, to the best of its knowledge, threatened actions or proceedings against the Bank before any court, administrative
agency or tribunal which, if determined adversely to it, would materially and adversely affect its ability, either in its individual capacity or as Owner Trustee, as the case may be, to perform its obligations under this Agreement or the Operative
Agreements.  

     (b) Wells Fargo Bank, N.A., as Trust Administrator, hereby represents and warrants to the Depositor, for the benefit of each Certificateholder
and the Swap Counterparty, that: 

     (i) it is a national banking association, duly organized and validly existing in good standing under the laws of the United States, and has the
power and authority to execute, deliver and perform its obligations under this Agreement and, assuming the due authorization, execution and delivery hereof by the other parties hereto, this Agreement constitutes a legal, valid and binding obligation
of the Trust Administrator, enforceable against the Trust Administrator in accordance with its terms, except that (a) the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to
creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be
brought; 

     (ii) it has taken all action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and
delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf; and 

     (iii) neither the execution nor the delivery by it of this Agreement nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene any federal, governmental rule or regulation governing the banking or trust powers of the Trust Administrator or any 

23 

judgment or order binding on it, or constitute any default under its charter documents or by-laws  or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be
bound.  

Section 6.05.  Reliance; Advice of Counsel.  

     (a) Except as provided in Section 6.01, the Owner Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Owner Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any corporate or partnership entity as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or
matter the manner of ascertainment of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president (or the general partner, in the case of a
partnership) and by the treasurer or any assistant treasurer or the secretary or any assistant secretary of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon. 

     (b) In its exercise or administration of the trusts and powers hereunder, including its obligations under Section 5.02(b), and in the
performance of its duties and obligations under this Agreement or the other Operative Agreements, the Owner Trustee may employ agents and attorneys and enter into agreements (including the Transfer and Servicing Agreement) with any of them, and the
Owner Trustee shall not be answerable for the default or misconduct of any such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care. If, and to the extent, the Seller shall have failed
to reimburse the Owner Trustee for all reasonable expenses and indemnities incurred pursuant to this Section 6.05(b), as provided in Section 7.01 and Section 7.02, the Owner Trustee may seek reimbursement therefor from the Trust Estate. 

     (c) In the administration of the trusts and performance of its duties hereunder, the Owner Trustee may consult with counsel, accountants and
other skilled Persons to be selected and employed by it, and the Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the reasonable advice or opinion of any such counsel, accountants or
other skilled Persons. If, and to the extent, the Seller shall have failed to reimburse the Owner Trustee for all reasonable expenses and indemnities incurred pursuant to this Section 6.05(c), as provided in Section 7.01 and Section 7.02, the Owner
Trustee may seek reimbursement therefor from the Trust Estate. 

     Section 6.06. Not Acting in Individual Capacity. Except as provided in this Article VI, in accepting the
trusts hereby created the Owner Trustee acts solely as trustee hereunder and not in its individual capacity, and all persons having any claim against the Owner Trustee by reason of the transactions contemplated by the Operative Agreements shall look
only to the Trust Estate for payment or satisfaction thereof. 

24 

     Section 6.07. Owner Trustee Not Liable for Certificates or Collateral. The recitals contained herein and in
the Certificates (other than the signatures and countersignatures of the Owner Trustee on the Certificates) shall be taken as the statements of the Depositor, and the Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this Agreement, of any Operative Agreement or of the Certificates (other than the signatures and countersignatures of the Owner Trustee on the Certificates) or the Notes, or of
any Collateral or related documents. The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Collateral, or the perfection and priority of any security interest
created by any Collateral or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to Certificateholders under this Agreement or
the Noteholders under the Indenture, including, without limitation: the existence, condition and ownership of any Collateral; the existence and enforceability of any insurance thereon; the existence and contents of any Collateral on any computer or
other record thereof; the validity of the assignment of any Collateral to the Trust or of any intervening assignment; the completeness of any Collateral; the performance or enforcement of any Collateral; the compliance by the Depositor with any
warranty or representation made under any Operative Agreements or in any related document or the accuracy of any such warranty or representation or any action of the Trust Administrator or the Indenture Trustee taken in the name of the Owner
Trustee. 

     Section 6.08. Owner Trustee May Own Notes. The Owner Trustee in its individual capacity may become an owner or
pledgee of Notes and may deal with the Depositor, the Trust Administrator and the Indenture Trustee in banking transactions with the same rights as it would have if it were not Owner Trustee. 

     Section 6.09. Licenses. The Depositor shall cause the Trust to use its best efforts to obtain and maintain the
effectiveness of any licenses required in connection with this Agreement and the other Operative Agreements and the transactions contemplated hereby and thereby until such time as the Trust shall terminate in accordance with the terms hereof. It
shall be the duty of the Owner Trustee to cooperate with the Depositor with respect to such matters. 

     Section 6.10. Doing Business in Other Jurisdictions. Notwithstanding anything contained herein to the
contrary, neither the Bank nor the Owner Trustee shall be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will (i) require the consent or approval or authorization or order of or the
giving of notice to, or the registration with or the taking of any other action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware; (ii) result in any fee, tax or other
governmental charge under the laws of any jurisdiction or any political subdivisions thereof in existence on the date hereof other than the State of Delaware becoming payable by the Bank or the Owner Trustee; or (iii) subject the Bank or the Owner
Trustee to personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by the Bank or the Owner Trustee, as the case may be, contemplated hereby.
The Owner Trustee shall be entitled to obtain advice of counsel (which advice shall be an expense of the Trust) to determine whether any action required to be taken pursuant to this Agreement results in the consequences described in clauses (i),
(ii) and (iii) of the preceding sentence. In the event that such counsel advises the Owner Trustee that 

25 

such action will result in such consequences, the Owner Trustee will appoint a co-trustee pursuant to Section 9.05 hereof to proceed with such action. 

     Section 6.11. Sarbanes-Oxley Act Certification. Notwithstanding anything to the contrary herein or in any
Operative Agreement, the Owner Trustee shall not be required to execute, deliver or certify on behalf of the Trust or any other Person any filings, certificates, affidavits or other instruments in connection with certifications required under the
Sarbanes-Oxley Act of 2002. 

     Section 6.12. Regulation AB Reporting Requirements.

     (a) Within 5 days of each Payment Date, the Owner Trustee shall provide in writing to the Depositor and the Trust Administrator disclosure of
any legal proceedings pending against the Owner Trustee or its property that would be material to Noteholders, that has not been previously disclosed to the Depositor and the Trust Administrator, including any such proceedings against the Owner
Trustee contemplated by governmental authorities, in each case that are known by a Responsible Officer of the Owner Trustee. 

     (b) The Owner Trustee shall provide in writing to the Depositor and the Trust Administrator disclosure of any affiliations and relationships
between the Owner Trustee and any of the transaction parties listed on Exhibit R to the Transfer and Servicing Agreement. The Owner Trustee shall provide such disclosure within 30 days of
the actual receipt by a Responsible Officer of the Owner Trustee of such Exhibit R. 

ARTICLE VII 

INDEMNIFICATION AND COMPENSATION 

     Section 7.01. Trust Expenses. The Seller shall pay the organizational expenses of the Trust as they may arise
or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee in connection therewith. The Seller shall also pay (or reimburse the Bank for) all reasonable expenses of the Owner
Trustee hereunder, including, without limitation, the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Owner Trustee may employ in connection with the exercise and performance of its
rights and duties under the Operative Agreements. 

     Section 7.02. Indemnification. The Seller agrees to assume liability for, and indemnify the Bank and its
successors, assigns, officers, directors, agents and servants, against and from, any and all liabilities, obligations, losses, damages, taxes, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, “Expenses”) which may be imposed on, incurred by or asserted at any time against the Bank (whether or not indemnified against by other parties) in any way relating to or arising out of this
Agreement, any Operative Agreement, the Collateral, the administration of the Trust Estate or the action or inaction of the Owner Trustee hereunder, except only that the Seller shall not be required to indemnify the Bank for Expenses arising or
resulting from any of the matters described in the third sentence of Section 6.01. The indemnities contained in this Section 7.02 shall survive the resignation or termination of the Owner Trustee or the termination 

26 

of this Agreement. In the event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Owner Trustee’s choice of legal counsel shall be subject to the approval of the Seller, which
approval shall not be unreasonably withheld. 

     Section 7.03. Compensation. The Bank shall receive as compensation for its services hereunder such fees as are
set forth in the Fee Letter Agreement between the Bank and the Seller. 

     Section 7.04. Lien on Trust Estate. The Bank shall have a lien on the Trust Estate for any compensation or
indemnity due hereunder, such lien to be subject only to prior liens of the Indenture. The Bank shall not bring any proceedings to foreclose on such lien if and to the extent the Trust Estate is subject to the lien of the Indenture. Any amount paid
to the Owner Trustee pursuant to this Article VII shall be deemed not to be part of the Trust Estate immediately after such payment. 

ARTICLE VIII 

TERMINATION OF AGREEMENT 

     Section 8.01. Termination of Agreement. 

     (a) This Agreement (other than Article VII) shall terminate and the trusts created hereby shall dissolve and terminate and the Trust Estate
shall, subject to the Indenture and Sections 4.01 and 7.04 and Section 3808 of the Delaware Trust Statute, be distributed to the Certificateholders, and this Agreement shall be of no further force or effect, upon the earlier of (i) the full payment
of principal and interest due on all Classes of the Notes and all obligations under the Swap Agreement; and (ii) the sale or other final disposition by the Indenture Trustee or the Owner Trustee, as the case may be, of all the Trust Estate and the
final distribution by the Indenture Trustee or the Owner Trustee, as the case may be, of all moneys or other property or proceeds of the Trust Estate in accordance with the terms of the Indenture, the Transfer and Servicing Agreement and Section
4.02. The bankruptcy, liquidation or dissolution of any Certificateholder shall not operate to terminate this Agreement, nor entitle such Certificateholder’s legal representatives to claim an accounting or to take any action or proceeding in
any court for a partition or winding up of the Trust Estate, nor otherwise affect the rights, obligations and liabilities of the parties hereto. 

     (b) Except as provided in Section 8.01(a), none of the Depositor or any Certificateholder shall be entitled to revoke or terminate the Trust
established hereunder. 

     (c) Notice of any termination of the Trust, specifying the Payment Date upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation, shall be given by the Certificate Paying Agent by letter to the Certificateholders, the Swap Counterparty and the Rating Agencies mailed within five Business Days of
receipt of notice of the final payment on the Notes pursuant to the Transfer and Servicing Agreement, stating (i) the Payment Date upon or with respect to which final payment of the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Certificate Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the 

27 

Certificate Paying Agent therein specified. The Certificate Paying Agent shall give such notice to the Owner Trustee and the Certificate Registrar at the time such notice is given to the Certificateholders. Upon presentation and
surrender of the Certificates, the Certificate Paying Agent shall cause to be distributed to the applicable Certificateholder amounts distributable on such Payment Date pursuant to Section 5.08 and Section 6.02 of the Transfer and Servicing
Agreement. 

     (d) Upon the winding up of the Trust and its termination, the Owner Trustee shall upon the written request of the Depositor cause the
Certificate of Trust to be cancelled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3810 of the Delaware Trust Statute. 

ARTICLE IX 

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES 

     Section 9.01. Eligibility Requirements for Owner Trustee. The Owner Trustee shall at all times be a
corporation satisfying the provisions of Section 3807(a) of the Delaware Trust Statute; authorized to exercise corporate powers; having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal
or state authorities; and having (or having a parent which has) a short-term debt rating of at least “A-1” or the equivalent by, or which is otherwise acceptable to, the Rating Agencies. If such corporation shall publish reports of
condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published. In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 9.02. 

     Section 9.02. Resignation or Removal of Owner Trustee. The Owner Trustee may at any time resign and be
discharged from the trusts hereby created by giving 30 days’ prior written notice thereof to the Depositor, the Swap Counterparty and the Indenture Trustee. Upon receiving such notice of resignation, the Depositor shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee. 

     If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section 9.01 and shall fail to resign after written request therefor by the Depositor, or if at any
time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor may remove the Owner Trustee. If the Depositor shall remove the Owner Trustee under the authority of the immediately preceding sentence,
the Depositor shall promptly appoint a successor Owner Trustee by written instrument in duplicate, one copy of which instrument shall be delivered to 

28 

the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee and payment of all fees owed to the outgoing Owner Trustee. 

     Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of
appointment by the successor Owner Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to the outgoing Owner Trustee. The Trust Administrator shall provide notice of such resignation or removal of the Owner Trustee to the
Rating Agencies. 

     Section 9.03. Successor Owner Trustee. Any successor Owner Trustee appointed pursuant to Section 9.02 shall
execute, acknowledge and deliver to the Trust Administrator and to its predecessor Owner Trustee an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner Trustee without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor under this Agreement, with like effect as if originally named
as Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and statements and monies held by it under this Agreement; and the Trust Administrator and the
predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties, and
obligations. 

     No successor Owner Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section 9.01.

     Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Trust Administrator shall mail notice of the successor of such Owner Trustee to all Certificateholders, the
Indenture Trustee, the Noteholders, the Swap Counterparty and the Rating Agencies. If the Trust Administrator fails to mail such notice within 10 days after acceptance of appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Trust Administrator. 

     Section 9.04. Merger or Consolidation of Owner Trustee. Any Person into which the Owner Trustee 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 Owner Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate trust business
of the Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided such Person shall be eligible pursuant to Section 9.01, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. 

     Section 9.05. Appointment of Co-Trustee or Separate Trustee. Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Estate or any Collateral may at the time be located, and for the purpose of performing certain duties and obligations of the

29 

Owner Trustee with respect to the Trust and the Certificates under the Transfer and Servicing Agreement, the Owner Trustee shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved
by the Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person, in such capacity, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Owner Trustee may consider necessary or desirable. No co-trustee or separate trustee under this Agreement shall be required to meet the
terms of eligibility as a successor trustee pursuant to Section 9.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 9.03. 

     The Owner Trustee hereby appoints the Trust Administrator for the purpose of establishing and maintaining the Collection Account and making the distributions therefrom to the Persons entitled thereto
pursuant to Section 5.08 and Section 6.02 of the Transfer and Servicing Agreement. 

     Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provision and conditions: 

     (a) all rights, powers, duties and obligations conferred or imposed upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Owner Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be performed, the Owner 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 singly by such separate trustee or co-trustee, but solely at the direction of the Owner Trustee; 

     (b) no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and

     (c) the Trust Administrator and the Owner Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or
co-trustee. 

     Any notice, request or other writing given to the Owner Trustee shall be deemed to have been given to the separate trustees and co-trustees, as if given to each of them. Every instrument appointing
any separate trustee or co-trustee, other than this Agreement, shall refer to this Agreement and to the conditions of this Article. Each separate trustee and co-trustee, upon its acceptance of appointment, shall be vested with the estates specified
in its instrument of appointment, either jointly with the Owner 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 Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a copy thereof given to the Trust Administrator. 

30 

     Any separate trustee or co-trustee may at any time appoint the Owner Trustee as 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 Owner Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. 

ARTICLE X

MISCELLANEOUS

     Section 10.01. Supplements and Amendments. This Agreement may be amended by the Depositor, the Trust
Administrator and the Owner Trustee, with the consent of each Certificateholder and with the prior written consent of the Swap Counterparty (but only to the extent such amendment materially adversely affects the amounts, priority or timing of
payments under the Swap Agreement and the Swap Agreement is in effect) and with prior written notice to the Rating Agencies, but without the consent of any of the Noteholders or the Indenture Trustee, to cure any ambiguity, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or each Certificateholder;
provided, however, that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder or Certificateholder or adversely affect the tax status of the Trust. An amendment shall be deemed to not adversely affect in any material respect the interests of any Noteholder or Certificateholder and no opinion
referred to in the preceding proviso shall be required to be delivered if the Person requesting the amendment obtains a letter from each Rating Agencies stating that the amendment would not result in the downgrading or withdrawal of the respective
ratings then assigned to each applicable Class of Notes and Certificates. Notwithstanding the preceding sentence, an opinion shall be required with respect to tax matters as set forth in this paragraph. 

     This Agreement may also be amended from time to time by the Depositor, the Trust Administrator and the Owner Trustee, with the prior written consent of the Rating Agencies and with the prior written
consent of the Indenture Trustee, the holders of Notes evidencing more than 66 2/3 % of the Outstanding Balance of the Notes, the consent of each Certificateholder and with the prior written consent of the Swap Counterparty (but only to the extent
such amendment materially adversely affects the amounts, priority or timing of payments under the Swap Agreement and the Swap Agreement is in effect), 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 any Certificateholder; provided, however, that no such
amendment shall, as evidenced by an Opinion of Counsel, adversely affect the tax status of the Trust; and provided, further, that
no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Collateral or payments that shall be required to be made for the benefit of the Noteholders or any
Certificateholder or (b) reduce the aforesaid percentage of the Outstanding Balance of the Notes required to consent to or to waive the requirement for any Certificateholder to consent to any such amendment, in either case of clause (a) or (b)
without the consent of the holders of all the outstanding Notes and each Certificateholder. 

31 

     Notwithstanding the foregoing, no provision of Sections 2.03 or 5.06 hereof may be amended in any manner unless (i) 100% of the Outstanding Balance of the Noteholders have consented in writing
thereto, (ii) the Rating Agencies have consent in writing thereto or (iii) the Notes have been paid in full and the Indenture has been discharged. 

     Promptly after the execution of any such amendment or consent, the Trust Administrator shall furnish written notification of the substance of such amendment or consent to each Certificateholder, the
Indenture Trustee and the Rating Agencies. 

     It shall not be necessary for the consent of the Certificateholders, the Noteholders or the Indenture Trustee pursuant to this Section 10.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents (and any other consents of the Certificateholders provided for in this Agreement or in any other Operative Agreement) and
of evidencing the authorization of the execution thereof by the Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may prescribe. 

     Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State. 

     Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the Owner Trustee and the Trust Administrator shall be entitled to receive and rely upon an Opinion of Counsel,
at the expense of the Trust, stating that the execution of such amendment is authorized or permitted by this Agreement. Neither the Owner Trustee nor the Trust Administrator shall be obligated to enter into any such amendment which affects the Owner
Trustee’s or Trust Administrator’s own rights, duties or immunities under this Agreement or otherwise. 

     Section 10.02. No Legal Title to Trust Estate in Certificateholders. The Certificateholders shall not have
legal title to any part of the Trust Estate and shall only be entitled to receive distributions with respect to their respective undivided beneficial interest therein pursuant to Section 4.02 once all amounts then owing with respect to the Notes
have been paid in accordance with the Indenture. No transfer, by operation of law of any right, title and interest of any Certificateholder in and to its undivided beneficial interest in the Trust Estate or hereunder shall operate to terminate this
Agreement or the trusts hereunder or entitle any successor transferee to an accounting or to the transfer to it of legal title to any part of the Trust Estate. 

     Section 10.03. Pledge of Collateral by Owner Trustee is Binding. The pledge of the Collateral to the Indenture
Trustee by the Trust made under the Indenture and pursuant to the terms of this Agreement shall bind each Certificateholder and shall be effective to transfer or convey the rights of the Trust and each Certificateholder in and to such Collateral to
the extent set forth in the Indenture. No purchaser or other grantee shall be required to inquire as to the authorization, necessity, expediency or regularity of such pledge or as to the application of any proceeds with respect thereto by the Owner
Trustee. 

32 

     Section 10.04. Limitations on Rights of Others. Nothing in this Agreement, whether express or implied (except
for Section 7.04), shall be construed to give to any Person other than the Owner Trustee and the Certificateholders any legal or equitable right in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions
contained herein. 

     Section 10.05. Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices
shall be in writing and delivered by hand, by courier or mailed by certified mail, postage prepaid, (a) if to the Owner Trustee or the Trust, addressed to it at the Corporate Trust Office of the Owner Trustee or to such other address as the Owner
Trustee may have set forth in a written notice to the Certificateholders and the Depositor addressed to it at the address set forth for such Certificateholders in the Certificate Register; (b) if to the Trust Administrator, addressed to it at the
Corporate Trust Office of the Trust Administrator; and (c) if to the Depositor, Fieldstone Mortgage Investment Corporation, 11000 Broken Lane Parkway, Suite 600, Columbia, Maryland 21044. Whenever any notice in writing is required to be given by the
Owner Trustee or the Trust Administrator, such notice shall be deemed given and such requirement satisfied if such notice is mailed by certified mail, postage prepaid, addressed as provided above. 

     Section 10.06. Severability. Any provision of this Agreement which is prohibited 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 shall not
invalidate or render unenforceable such provision in any other jurisdiction. 

     Section 10.07. Separate Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 

     Section 10.08. Successors and Assigns. All representations, warranties, covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the Owner Trustee and its successors and assigns and the Swap Counterparty, the Depositor and each Certificateholder and its respective successors, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by any Certificateholder shall bind the successors of each such Certificateholder. Notwithstanding anything to the contrary herein, the Swap Counterparty is an express third party
beneficiary of this Agreement. 

     Section 10.09. Headings. The headings of the various Articles and Sections herein are for convenience of
reference only and shall not define or limit any of the terms or provisions hereof. 

     Section 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE 

33 

PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 

     Section 10.11. No Petition. 

     (a) The Owner Trustee and the Trust Administrator, by entering into this Agreement, each Certificateholder, by accepting the Certificates, and
the Indenture Trustee and each Noteholder, by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Depositor or the Trust, or join in any institution against the Depositor or the
Trust of, any bankruptcy under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Certificates, the Notes, this Agreement or any of the other Operative Agreements. 

     (b) The Depositor shall not be liable for the default or misconduct of the Trust Administrator, the Owner Trustee, the Indenture Trustee or the
Certificate Paying Agent under any of the Operative Agreements or otherwise and the Depositor shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the Operative Agreements that are required to be
performed by the Trust Administrator under the Transfer and Servicing Agreement or the Indenture Trustee under the Indenture. 

     Section 10.12. No Recourse. Each Certificateholder by accepting a Certificate acknowledges that such
Certificateholder’s Certificate represents a beneficial interest in the Trust only and does not represent an interest in or an obligation of the Depositor, the Trust Administrator, the Owner Trustee, any co-trustee, the Bank or any Affiliate
thereof (other than the Trust) and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Certificates or the other Operative Agreements. 

     Section 10.13. Customer Identification. The Depositor’s legal name, principal place of business, local
office or other physical location street address is Fieldstone Mortgage Investment Corporation, 11000 Broken Lane Parkway, Suite 600, Columbia, Maryland 21044, and its government issued identification number is 20-2972688. The Seller’s legal
name, principal place of business, local office or other physical location street address is Fieldstone Investment Corporation, 11000 Broken Land Parkway, Suite 600, Columbia, Maryland 21044, and its government issued identification number is
54-1873198. In connection with any federal, state or local laws requiring financial institutions to obtain, verify and record information that identifies each person or entity who opens an account, the Owner Trustee may request, and the Seller and
the Depositor agree to promptly provide to the Owner Trustee, copies of documentation which substantiates the identity of the Depositor or the Seller, as applicable. Such documentation may include, but is not limited to, financial statements,
government licenses, certified copies of formation documents or identification documentation of principals claiming to represent such party. 

34 

ARTICLE XI 

OFFICERS 

     Section 11.01. Appointment of Officers. The Trust may have one or more Officers who are hereby empowered to
take and are responsible for performing all ministerial duties on behalf of the Trust pursuant to this Agreement and the other Operative Agreements, including, without limitation, the execution of the Officers’ Certificate (as defined in the
Indenture), the Trust Order (as defined in the Indenture), the Trust Request (as defined in the Indenture), the annual compliance report required under Section 3.09 of the Indenture, and any annual reports, documents and other reports which the
Trust is required to file with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. Each of the Chairman of the Board, the Chief Executive Officer, the President, each Senior Vice
President and each Vice President of the Depositor is hereby appointed as an Officer of the Trust. The Depositor shall promptly deliver to the Owner Trustee and the Indenture Trustee a list of its officers who shall become the Officers of the Trust
pursuant to this Section 11.01. 

     Section 11.02. Officers to Provide Information to the Owner Trustee. It shall be the duty of each Officer to
keep the Owner Trustee reasonably and promptly informed as to material events relating to the Trust, including, without limitation, all claims pending or threatened against the Trust, the purchase and sale of any material portion of the Trust Estate
and the execution by such Officer on behalf of the Trust of any material agreements or instruments. 

35 

     IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written.

	 	
FIELDSTONE MORTGAGE INVESTMENT 
  
	 	
CORPORATION, 
  
	 	
as Depositor 
  
	 	 

  
	 	 
	 	By: 

  	/s/ John C. Kendall
	 	
Name: John C. Kendall 
  
	 	
Title: President 
  
	 	 

  
	 	 

  
	 	 

  
	 	
U.S. BANK TRUST NATIONAL 
  
	 	
ASSOCIATION, 
  
	 	
not in its individual capacity but solely as 
  
	 	
Owner Trustee 
  
	 	 

  
	 	 

  
	 	By:  	/s/ Charles F. Pedersen
	 	
Name: Charles F. Pedersen 
  
	 	
Title: Vice President 
  
	 	 

  
	 	 

  
	 	 

  
	 	
WELLS FARGO BANK, N.A., 
  
	 	
not in its individual capacity but solely as Trust 
  
	 	
Administrator 
  
	 	 

  
	 	 

  
	 	By:  	/s/ Carla S. Walker
	 	
Name: Carla S. Walker 
  
	 	
Title: Vice President 
  

	
Acknowledged and Agreed, solely 
  
	
for purposes of Sections 2.11, 7.01, 7.02 and 10.13: 
  
	 

  
	
FIELDSTONE INVESTMENT CORPORATION 
  
	 

  
	 

  
	
By: 
  	
         /s/ John C. Kendall 
    
	 
	
Name: John C. Kendall 
  
	
Title:   Executive Vice President 
  

EXHIBIT A 

FORM OF CERTIFICATES 

THIS OWNERSHIP CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE.  THIS OWNERSHIP CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY
OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (A) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (B) AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE ACT THAT IS ACQUIRING
THE OWNERSHIP CERTIFICATE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
ACT.  NO PERSON IS OBLIGATED TO REGISTER THIS OWNERSHIP CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS. 

THIS CERTIFICATE MAY NOT BE ACQUIRED BY A TRANSFEREE FOR, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT THAT IS SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”), SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR ANY SUBSTANTIALLY SIMILAR LAW, OR ANY ENTITY DEEMED TO HOLD THE PLAN ASSETS OF THE FOREGOING. EACH INVESTOR IN THIS CERTIFICATE WILL BE
DEEMED TO MAKE THE FOREGOING REPRESENTATIONS AND WILL FURTHER BE DEEMED TO REPRESENT, WARRANT AND COVENANT THAT IT WILL NOT SELL, PLEDGE OR OTHERWISE TRANSFER THIS CERTIFICATE IN VIOLATION OF THE FOREGOING. 

THIS OWNERSHIP CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, THE TRUST ADMINISTRATOR OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE TRUST AGREEMENT OR THE OTHER OPERATIVE AGREEMENTS. 

THIS OWNERSHIP CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRANSFER AND SERVICING AGREEMENT REFERRED TO HEREIN. 

NO TRANSFER OF THIS OWNERSHIP CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED AN AFFIDAVIT FROM THE PROPOSED TRANSFEREE IN WHICH THE PROPOSED TRANSFEREE DECLARES THAT IT IS EITHER (i) A REAL ESTATE
INVESTMENT TRUST (A “REIT”) WITHIN THE 

MEANING OF SECTIONS 856 AND 857 OF THE CODE, (ii) A QUALIFIED REIT SUBSIDIARY WITHIN THE MEANING OF SECTION 856(i) OF THE CODE OR (iii) AN ENTITY THAT IS DISREGARDED FOR UNITED STATES FEDERAL INCOME TAX PURPOSES THAT IS WHOLLY
OWNED BY A REIT OR QUALIFIED REIT SUBSIDIARY. NOTWITHSTANDING THE FOREGOING, THIS OWNERSHIP CERTIFICATE MAY BE PLEDGED OR TRANSFERRED TO A LENDER OR REPURCHASE AGREEMENT COUNTERPARTY IN A REPURCHASE AGREEMENT OR SECURED LENDING TRANSACTION THAT
QUALIFIES AS A BORROWING FOR FEDERAL INCOME TAX PURPOSES.  ANY ATTEMPTED TRANSFER OF THIS OWNERSHIP CERTIFICATE OTHER THAN IN ACCORDANCE WITH THIS PARAGRAPH SHALL BE VOID AB INITIO AND THE
PURPORTED TRANSFEREE SHALL ACQUIRE NO RIGHTS IN THIS OWNERSHIP CERTIFICATE. 

A-2 

FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2007-1 

	
     Certificate No. 1 
  	 
  	
Percentage Interest: 100% 
  

     First Payment Date: May 25, 2007 

     Evidencing a fractional undivided equity interest in the Trust Estate, the property of which consists primarily of the Collateral in Fieldstone Mortgage Investment Trust, Series 2007-1 (the
“Trust”), a Delaware statutory trust formed by Fieldstone Mortgage Investment Corporation, a Maryland corporation, as depositor (the “Depositor”), pursuant to the Agreement referred to below. 

     This certifies that FIELDSTONE MORTGAGE OWNERSHIP CORP. is the registered owner of the Percentage Interest referred to above. 

     The Trust was created pursuant to a Trust Agreement (the “Agreement”) dated as of March 23, 2007, between the Depositor and U.S. Bank Trust National Association, as owner trustee (the
“Owner Trustee,” which term includes any successor entity under the Agreement), as amended and restated as of April 12, 2007, among the Depositor, the Owner Trustee and Wells Fargo Bank, N.A., as trust administrator (the “Trust
Administrator”), a summary of certain of the pertinent provisions of which is set forth hereinafter. This Ownership Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Ownership Certificate by virtue of the acceptance hereof assents and by which such Holder is bound, and the Transfer and Servicing Agreement dated as of April 1, 2007 (as amended or supplemented from time to time, the “Transfer
and Servicing Agreement”), by and among the Trust, the Depositor, Wells Fargo Bank, N.A., as trust administrator (in such capacity, the “Trust Administrator”) and as indenture trustee (in such capacity, the “Indenture
Trustee”), Litton Loan Servicing LP, as servicer, and Fieldstone Investment Corporation, as seller. Distributions on this Ownership Certificate shall be made by the Trust Administrator, in its capacity as Certificate Paying Agent under the
Agreement and the Transfer and Servicing Agreement. 

     This Ownership Certificate is issued under the Agreement to which reference is hereby made for a statement of the respective rights thereunder of the Depositor, the Owner Trustee and the Holder of the
Ownership Certificate and the terms upon which the Ownership Certificate is executed and delivered. All terms used in this Ownership Certificate which are defined in the Agreement shall have the meanings assigned to them in the Agreement. The Trust
Estate consists of the Collateral in the Fieldstone Mortgage Investment Trust, Series 2007-1. To the extent not otherwise defined herein, capitalized terms used herein have the meanings assigned to such terms in the Agreement or the Transfer and
Servicing Agreement. The rights of the Holder are subordinated to the rights of the Noteholders, as set forth in the Indenture dated as of April 1, 2007, among the Trust, Trust Administrator and the Indenture Trustee. 

     There will be distributed on the 25th day of each month or, if such 25th
day is not a Business Day, the next Business Day (each, a “Payment Date”), commencing in May 2007, to the Holder at the close of business on the last Business Day of the month preceding the month of 

A-3 

such Payment Date (the “Record Date”), the amount to be distributed to Holder on such Payment Date, all as described in the Transfer and Servicing Agreement. 

     The Holder, by its acceptance of this Ownership Certificate, agrees that it will look solely to the funds on deposit in the Collection Account that have been released from the lien of the Indenture
for payment hereunder and that neither the Owner Trustee, the Trust Administrator or the Certificate Paying Agent in their individual capacities nor the Depositor is personally liable to the Holder for any amount payable under this Ownership
Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement. 

     The Holder acknowledges and agrees that its rights to receive distributions in respect of this Ownership Certificate are subordinated to the rights of the Noteholders as described in the Indenture.

     The Depositor and the Holder, by acceptance of an Ownership Certificate, agree to treat, and to take no action inconsistent with the treatment of, the Trust as a Qualified REIT Subsidiary for federal,
and any applicable state and local income tax purposes. 

     The Holder, by its acceptance of an Ownership Certificate, covenants and agrees that it will not at any time institute against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the
Ownership Certificate, the Notes, the Agreement or any other of the Operative Agreements. 

     Distributions on this Ownership Certificate will be made as provided in the Agreement by the Certificate Paying Agent by wire transfer or check mailed to the Holder without the presentation or
surrender of this Ownership Certificate or the making of any notation hereon. Except as otherwise provided in the Agreement and notwithstanding the above, the final distribution on this Ownership Certificate will be made after due notice by the
Certificate Paying Agent of the pendency of such distribution and only upon presentation and surrender of this Ownership Certificate at the office or agency maintained by the Certificate Registrar for that purpose. 

     Reference is hereby made to the further provisions of this Ownership Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth
at this place. 

     Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Owner Trustee, or an authenticating agent by manual signature, this Ownership Certificate shall
not entitle the Holder hereof to any benefit under the Agreement or be valid for any purpose. 

     THIS OWNERSHIP CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 

A-4 

     IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its individual capacity, has caused this Ownership Certificate to be duly executed. 

	 	
FIELDSTONE MORTGAGE INVESTMENT 
  
	 	
TRUST, SERIES 2007-1 
  
	 	 

  
	 	
By: U.S. BANK TRUST NATIONAL 
  
	 	
ASSOCIATION, 
  
	 	
not in its individual capacity but solely as Owner 
  
	 	
Trustee 
  
	 	 

  
	 	
By: _______________________________________ 
  
	 	
       Authorized Signatory 
  
	 	 

  
	 	 

  
	 	
Dated: _____________________ 
  

CERTIFICATE OF AUTHENTICATION 

This is the Ownership Certificate referred to in the within-mentioned Trust Agreement. 

	 	
WELLS FARGO BANK, N.A., 
  
	 	
not in its individual capacity but solely as Trust 
  
	 	
Administrator 
  
	 	 

  
	 	
By: _______________________________________ 
  
	 	
       Authorized Signatory 
  
	 	 

  
	 	 

  
	 	
Dated: _____________________ 
  

A-5 

FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2007-1 

OWNERSHIP CERTIFICATE 

The Ownership Certificate does not represent an obligation of, or an interest in, the Depositor, the Indenture Trustee, the Owner Trustee, the Trust Administrator or any Affiliates of any of them and no recourse may be had against
any such parties or their assets, except as expressly set forth or contemplated herein or in the Agreement or the other Operative Agreements.  In addition, this Ownership Certificate is not guaranteed by any governmental agency or instrumentality
and is limited in right of payment to certain collections and recoveries with respect to the Collateral, all as more specifically set forth herein. A copy of the Agreement may be examined by any Certificateholder upon written request during normal
business hours at the principal office of the Depositor and at such other places, if any, designated by the Depositor. 

The Agreement permits the amendment thereof as specified below, provided that any amendment be accompanied by an Opinion of Counsel to the effect that such amendment complies with the provisions of the Agreement and would not
cause the Trust to be subject to an entity level tax.  If the purpose of the amendment is to correct any mistake, eliminate any inconsistency, cure any ambiguity or deal with any matter not covered, it shall not be necessary to obtain the consent of
any Noteholder or the Indenture Trustee.  If the purpose of the amendment is to add or eliminate or change any provision of the Agreement, other than as specified in the preceding sentence, the amendment shall require the consent of the Holder, the
consent of Noteholders evidencing more than 662/3% of the Outstanding Balance of the Notes and the Indenture Trustee; provided, however, that no such amendment shall, as evidenced by an Opinion of Counsel, adversely affect the tax status of the Trust; and provided, further, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Collateral or distributions that shall be required to be made for the benefit of the Noteholders or the Holder or (b) reduce the
aforesaid percentage of the Outstanding Balance of the Notes required to consent to or to waive the requirement for the Holder to consent to any such amendment, in either case of clause (a) or (b) without the consent of the holders of all the
outstanding Notes and the Holder. 

As provided in the Agreement and subject to certain limitations therein set forth, including the limitations set forth in Section 3.03 thereof, the transfer of this Ownership Certificate is registerable in the Certificate Register
upon surrender of this Ownership Certificate for registration of transfer at the offices or agencies of the Certificate Registrar, accompanied by a written instrument of transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and thereupon a new Ownership Certificate will be issued to the designated transferee.  The initial Certificate Registrar appointed under the Agreement is the Trust Administrator.

Except as provided in the Agreement, the Ownership Certificate is issuable only in a minimum Percentage Interest of 100%.  No service charge will be made for any such registration of transfer or exchange, but the Owner Trustee or
the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith or any expense incurred thereby. 

A-6 

The Owner Trustee, the Certificate Paying Agent, the Trust Administrator, the Certificate Registrar and any agent of the Owner Trustee, the Certificate Paying Agent, the Trust Administrator or the Certificate Registrar may treat
the Holder as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Paying Agent, the Trust Administrator, the Certificate Registrar or any such agent shall be affected by any notice to the contrary. 

The obligations and responsibilities created by the Agreement and the Trust created thereby shall terminate upon the payment to Certificateholders of all amounts required to be paid to them pursuant to the Trust Agreement and the
Transfer and Servicing Agreement and the disposition of all property held as part of the Trust Estate. 

A-7 

ASSIGNMENT 

     FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and transfer(s) unto 

     ________________________________________________________________________

     ________________________________________________________________________

     (Please print or type name and address, including postal zip code, of assignee and social security number or employer identification number) 

     ________________________________________________________________________

     the within Certificate stating in the names of the undersigned in the Securities Register and does hereby irrevocably constitute and appoint 

     ________________________________________________________________________

to transfer such Certificate in such Securities Register of the Trust. 

     I [we] further direct the Securities Registrar to issue a new Certificate of the same Class of like principal to the above-named assignee and deliver such Certificate to the following address:

     ________________________________________________________________________

     ________________________________________________________________________

	
              Dated: ____________________ 
  	 
  	 

  
	 

  	 
  	
Signature by or on behalf of Assignor 
  
	
                    Authorized Officer 
  	 
  	 

  
	 

  	 
  	
Signature Guaranteed 
  
	
Name of Institution 
  	 
  	
NOTICE: The signature(s) of this assignment must 
  
	 

  	 
  	
correspond with the name(s) on the face of this 
  
	 

  	 
  	
Certificate without alteration or any change 
  
	 

  	 
  	
whatsoever. The signature must be guaranteed by a 
  
	 

  	 
  	
participant in the Securities Transfer Agents 
  
	 

  	 
  	
Medallion Program, the New York Stock Exchange 
  
	 

  	 
  	
Medallion Signature Program or the Stock 
  
	 	 	Exchanges Medallion Program. Notarized 
	 	 	or witnessed signatures are not acceptable 
	 	 	as guaranteed signatures.

A-8 

	
DISTRIBUTION INSTRUCTIONS
  
	 
	
                    The assignee should include the following for the information of the Securities Registrar. 
  
	 

  
	 

  
	
Distributions shall be made by wire transfer in immediately available funds to 
  
	 
	 

  
	
                    for the account of 
  
	 
	 

  
	
                    account number _____________________ or, if mailed by check, to ________________________________
	
    .

  

	 

  
	
                    Applicable reports and statements should be mailed to ____________________________________________
	  

	 
	
                    This information is provided by _____________________________________________________________
	
                    the assignee named above, or __________________________________________________
 as its agent. 
  

A-9

EXHIBIT B 

[RESERVED] 

EXHIBIT C 

FORM OF CERTIFICATE OF TRUST OF 

FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2007-1 

     THIS Certificate of Trust of Fieldstone Mortgage Investment Trust, Series 2007-1 (the “Trust”), is being duly executed and filed by the undersigned, as trustee, to form a statutory trust
under the Delaware Statutory Trust Act (12 DEL. CODE, Sections 3801 et seq.) (the “Act”). 

     1. NAME. The name of the statutory trust formed hereby is “FIELDSTONE  MORTGAGE INVESTMENT TRUST, SERIES 2007-1.” 

     2. DELAWARE TRUSTEE. The name and business address of the trustee of the Trust in the State of Delaware are U.S. Bank Trust National Association, 300 Delaware Avenue, 9th Floor, Wilmington, Delaware 19801, Attention: Fieldstone Mortgage Investment Trust, Series 2007-1. 

     3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon filing. 

     IN WITNESS WHEREOF, the undersigned, being the owner trustee of the Trust, has executed this Certificate of Trust in accordance with Section 3811(a) of the Act. 

	 	
U.S. BANK TRUST NATIONAL ASSOCIATION, 
  
	 	
as Owner Trustee 
  
	 	 

  
	 	 

  
	 	
By: _________________________________ 
  
	 	
       Name: 
  
	 	
       Title: 
  

EXHIBIT D-1 

FORM OF RULE 144A INVESTMENT LETTER 

	 	
    
      
      Date       

      

Wells Fargo Bank, N.A., 

as Certificate Registrar 

Sixth Street and Marquette Avenue 

Minneapolis, Minnesota 55479 

Attention: Corporate Trust Department 

Re: Fieldstone Mortgage Investment Trust, Series 2007-1 

      [Ownership Certificate]     

Ladies and Gentlemen: 

     In connection with our acquisition of the Fieldstone Mortgage Investment Trust, Series 2007-1 Ownership Certificate (the “Certificate”), we certify that (a) we understand that the
Certificate has not been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and is being transferred to us in a transaction that is exempt from the registration requirements of the Act and any
such laws, (b) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investment in the Certificate, (c) we have had the opportunity to ask questions of and receive answers
from Fieldstone Mortgage Investment Corporation (the “Depositor”) concerning the purchase of the Certificate and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificate, (d)
we have not, nor has anyone acting on our behalf, offered, transferred, pledged, sold or otherwise disposed of the Certificate or any interest in the Certificate, or solicited any offer to buy, transfer, pledge or otherwise dispose of the
Certificate or any interest in the Certificate from any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action that would constitute a distribution of the Certificate
under the Act or that would render the disposition of the Certificate a violation of Section 5 of the Act or any state securities laws or require registration pursuant thereto, and we will not act, or authorize any person to act, in such manner with
respect to the Certificate and (e) we are a “qualified institutional buyer” as that term is defined in Rule 144A under the Act (“Rule 144A”). We are aware that the sale to us is being made in reliance on Rule 144A. 

     We are acquiring the Certificate for our own account or for resale pursuant to Rule 144A and understand that such Certificate may be resold, pledged or transferred only (1) 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 (2) pursuant to another exemption from registration under the Act. 

     In addition, we hereby certify that we are not an employee benefit plan or other retirement arrangement that is subject to Section 406 of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), or to Section 4975 of the Internal Revenue Code of 1986, as amended (or to any other substantially similar law) or any entity deemed to hold the plan assets of the foregoing. 

     We hereby acknowledge that under the terms of the Amended and Restated Trust Agreement among Fieldstone Mortgage Investment Corporation, as Depositor, U.S. Bank Trust National Association, as Owner
Trustee, and Wells Fargo Bank, N.A., as Trust Administrator, dated as of April 12, 2007, no transfer of the Certificate shall be permitted to be made to any person unless the Certificate Registrar has received a certificate from such transferee in
the form hereof. 

     We hereby indemnify the Depositor, Certificate Registrar and the Owner Trustee against any liability that may result to either of them if our transfer or other disposition of the Certificate (or any
interest therein) is not exempt from the registration requirements of the Act and any applicable state securities laws or is not made in accordance with such federal and state laws. 

	 	
Very truly yours, 
  
	 	 

  
	 	
[Name of Transferee] 
  
	 	 

  
	 	 

  
	 	
By: __________________________________ 
  
	 	
        Name: 
  
	 	
       Title: 
  

D-1-2 

EXHIBIT D-2 

FORM OF NON-RULE 144A INVESTMENT LETTER 

	 	
        
        Date  

    

Wells Fargo Bank, N.A.,

  as Certificate Registrar 

Sixth Street and Marquette Avenue 

Minneapolis, Minnesota 55479 

Attention: Corporate Trust Department 

Re: Fieldstone Mortgage Investment Trust, Series 2007-1 

      [Ownership Certificate]      

Ladies and Gentlemen: 

     In connection with our acquisition of the Fieldstone Mortgage Investment Trust, Series 2007-1 Ownership Certificate (the “Certificate”) we certify that (a) we understand that the Certificate
has not been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and is being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws,
(b) we are an “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or (7) under the Act, and have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investment
in the Certificate, (c) we have had the opportunity to ask questions of and receive answers from the Depositor concerning the purchase of the Certificate and all matters relating thereto or any additional information deemed necessary to our decision
to purchase the Certificate, (d) we are acquiring the Certificate for investment for our own account and not with a view to any distribution of such Certificate (but without prejudice to our right at all times to sell or otherwise dispose of the
Certificate in accordance with clause (f) below), (e) we have not offered or sold any Certificate to, or solicited offers to buy any Certificate from, any person, or otherwise approached or negotiated with any person with respect thereto, or taken
any other action that would result in a violation of Section 5 of the Act or any state securities laws and (f) we will not sell, transfer or otherwise dispose of any Certificate unless (1) such sale, transfer or other disposition is made pursuant to
an effective registration statement under the Act and in compliance with any relevant state securities laws or is exempt from such registration requirements and, if requested, we will at our expense provide an opinion of counsel satisfactory to the
addressees of this certificate that such sale, transfer or other disposition may be made pursuant to an exemption from the Act, (2) the purchaser or transferee of such Certificate has executed and delivered to you a certificate to substantially the
same effect as this certificate and (3) the purchaser or transferee has otherwise complied with any conditions for transfer set forth in the Amended and Restated Trust Agreement dated as of April 12, 2007, among Fieldstone 

Mortgage Investment Corporation, as Depositor, U.S. Bank Trust National Association, as Owner Trustee and Wells Fargo Bank, N.A., as Trust Administrator (the “Trust Agreement”). 

     In addition, we hereby certify that we are not an employee benefit plan or other retirement arrangement subject to section 406 of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), or to Section 4975 of the Internal Revenue Code of 1986, as amended (or to any other substantially similar law) or any entity deemed to hold the plan assets of the foregoing. 

     We hereby acknowledge that under the terms of the Trust Agreement, no transfer of the Certificate shall be permitted to be made to any person unless the Certificate Registrar has received a
certificate from such transferee in the form hereof. 

     We hereby indemnify the Owner Trustee, the Depositor and the Certificate Registrar against any liability that may result to either of them if our transfer or other disposition of the Certificate (or
any interest therein) is not exempt from the registration requirements of the Act and any applicable state securities laws or is not made in accordance with such federal and state laws. 

	 	
Very truly yours, 
  
	 	 

  
	 	
[Name of Transferee] 
  
	 	 

  
	 	
By: __________________________________ 
  
	 	
       Name: 
  
	 	
       Title: 
  

D-2-2 

EXHIBIT E 

U.S. Bank Trust National Association 

300 Delaware Avenue, 9th Floor 

Wilmington, Delaware 19801 

Attention: Fieldstone Mortgage Investment Trust 2007-1 

Wells Fargo Bank, N.A. 

9062 Old Annapolis Road 

Columbia, Maryland 21045 

Attention: Fieldstone 2007-1 

     Re: Fieldstone Mortgage Investment Trust, Series 2007-1 

Ladies and Gentlemen: 

     This representation and warranty is delivered pursuant to Section 3.03 of the Amended and Restated Trust Agreement dated as of April 12, 2007, (the “Agreement”), among Fieldstone Mortgage
Investment Corporation, as depositor (the “Depositor”), U.S. Bank Trust National Association, as owner trustee (the “Owner Trustee”), and Wells Fargo Bank, N.A., as trust administrator (the “Trust Administrator”), in
connection with the transfer by Fieldstone Mortgage Investment Trust, Series 2007-1 (the “Trust”) to the undersigned as beneficial owner (the “Beneficial Owner”) of a 100% Percentage Interest in the Ownership Certificate.
Capitalized terms used but not defined in this document have the meanings ascribed to them in the Agreement. 

     The Beneficial Owner hereby certifies that it has received a copy of the Agreement and that it understands the restrictions on transferability of the Ownership Certificate and the indemnity provisions
set forth in Section 3.03 of the Agreement. In connection with the transfer of the Ownership Certificate to the Beneficial Owner, the Beneficial Owner represents and warrants that: 

	     	
(1)        	
The Beneficial Owner either (i) qualifies for taxation as a real estate investment trust (a “REIT”) within the meaning of Sections 856 and 857 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii)
is a qualified REIT subsidiary within the meaning of Section 856(i) of the Code (a “Qualified REIT Subsidiary”), or (iii) is an entity that is disregarded for federal income tax purposes that is wholly owned by a REIT or a Qualified REIT Subsidiary. 
	 
	 	
(2)        	
The Beneficial Owner hereby agrees to be subject to the indemnification provisions set out in Section 3.03 of the Agreement.  
	 
	 	
(3)        	
The Beneficial Owner hereby agrees to be subject to the provisions governing events of default set out in the Indenture among the Trust, as Issuing Entity, Wells Fargo Bank, N.A., as trust administrator, and as indenture trustee,
dated as of April 1, 2007.  
	 

	     	
(4)        	
The Beneficial Owner hereby agrees to notify the Trust within sixty (60) days of the date on which the Beneficial Owner discovers that it has failed to qualify as a REIT, a Qualified REIT Subsidiary or an entity that is
disregarded for federal income tax purposes that is wholly owned by a REIT or a Qualified REIT Subsidiary at any time at which the Beneficial Owner owns the Ownership Certificate.  
	 
	 	
(5)        	
The Beneficial Owner is not, and on April 12, 2007, will not be, an employee benefit plan or other retirement arrangement subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or Section 4975 of the Code or any substantially similar applicable law (collectively, a “Plan”) or a person acting on behalf of any such Plan or investing the assets of any such Plan to acquire the Ownership
Certificate.  
	 
	 	
(6)        	
The Beneficial Owner will not transfer the Ownership Certificate to any person or entity (i) as to which the Beneficial Owner has reason to believe does not satisfy the requirements set forth in the Agreement, and (ii) without
obtaining from the prospective Transferee and providing to the Certificate Registrar a written representation substantially in the form of Exhibit F to the Agreement.  
	 
	 	
(7)        	
The Beneficial Owner of the Ownership Certificate will not take any action or inaction that would cause the Trust to be subject to any United States federal income taxation.  
	 

[SIGNATURE PAGE FOLLOWS] 

E-2 

	 	
Very truly yours, 
  
	 	 

  
	 	
FIELDSTONE MORTGAGE OWNERSHIP 
  
	 	
CORP. 
  
	 	 

  
	 	
By: __________________________________ 
  
	 	
        Name: 
  
	 	
        Title: 
  

E-3 

EXHIBIT F 

FORM OF REPRESENTATION AND WARRANTY REGARDING TRANSFEREE’S 

STATUS AS A REIT OR QUALIFIED REIT SUBSIDIARY 

     This representation and warranty is delivered pursuant to Section 3.03 of the Trust Agreement dated as of April 12, 2007, (the “Agreement”), among Fieldstone Mortgage Investment Corporation,
as depositor (the “Depositor”), U.S. Bank Trust National Association, as owner trustee (the “Owner Trustee”), and Wells Fargo Bank, N.A., as trust administrator (the “Trust Administrator”), in connection with the
transfer by [the [transferor] to the undersigned] as beneficial owner (the “Beneficial Owner”) of a 100% Percentage Interest in the Ownership Certificate. Capitalized terms used but not defined in this document have the meanings ascribed
to them in the Agreement. 

     The Beneficial Owner hereby certifies that it has received a copy of the Agreement and that it understands the restrictions on transferability of the Ownership Certificate set forth in Section 3.03 of
the Agreement and the indemnity provisions set forth in Section 7.02 of the Agreement. In connection with the transfer of the Ownership Certificate to the Beneficial Owner, the Beneficial Owner represents and warrants that: 

	     	
(1)        	
The Beneficial Owner either (i) qualifies for taxation as a real estate investment trust (a “REIT”) within the meaning of Sections 856 and 857 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii)
is a qualified REIT subsidiary within the meaning of Section 856(i) of the Code (a “Qualified REITSubsidiary”), or (iii) is an entity that is disregarded for federal income tax purposes that is wholly owned by a REIT or a Qualified REIT Subsidiary.
Notwithstanding the foregoing, the Beneficial Owner may pledge or transfer the Ownership Certificate to a lender or repurchase agreement counterparty in a repurchase agreement or secured lending transaction that qualifies as a borrowing for federal income tax purposes. 
	 
	 	
(2)        	
The Beneficial Owner hereby warrants that the Beneficial Owner shall indemnify the Trust for any income tax imposed upon the Trust due to the Beneficial Owner’s failure to qualify as a REIT, a Qualified REIT Subsidiary, or an
entity that is disregarded for federal income tax purposes that is wholly owned by a REIT or a Qualified REIT Subsidiary at any time at which such Beneficial Owner owns the Ownership Certificate.  
	 
	 	
(3)        	
The Beneficial Owner hereby agrees to be subject to the provisions governing events of default set out in the Indenture among Fieldstone Mortgage Investment Trust, Series 2007-1 (the “Trust”), as Issuing Entity, Wells
Fargo Bank, N.A., as trust administrator and as indenture trustee, dated as of April 1, 2007.  
	 
	 	
(4)        	
The Beneficial Owner hereby agrees to notify the Trust within sixty (60) days of the date on which the Beneficial Owner discovers that it has failed to qualify as a REIT, a Qualified REIT Subsidiary, or an entity that is
disregarded for federal income tax purposes that is wholly owned by a REIT or a Qualified REIT  
	 

	 	 	
Subsidiary at any time at which the Beneficial Owner owns the Ownership Certificate.  
	 
	     	
(5)        	
The Beneficial Owner is not, and on _________ [date of transfer] will not be, an employee benefit plan or other retirement arrangement subject to Section 406 of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”) or Section 4975 of the Code or any substantially similar applicable law (collectively, a “Plan”) or a person acting on behalf of any such Plan or investing the assets of any such Plan to acquire the Ownership
Certificate.  
	 
	 	
(6)        	
The Beneficial Owner will not transfer the Ownership Certificate to any person or entity (i) as to which the Beneficial Owner has reason to believe does not satisfy the requirements set forth in the Agreement, and (ii) without
obtaining from the prospective Transferee and providing to the Certificate Registrar a written representation substantially in the form of this Exhibit F to the Agreement.  
	 
	 	
(7)        	
The Beneficial Owner of the Ownership Certificate will not take any action or inaction that would cause the Trust to be subject to any United States federal income taxation.  
	 

F-2FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES
2007-1, as Issuing Entity

FIELDSTONE MORTGAGE INVESTMENT CORPORATION,
as Depositor

WELLS FARGO BANK, N.A., as Trust
Administrator and Indenture Trustee

LITTON LOAN SERVICING LP, as Servicer

and

FIELDSTONE INVESTMENT CORPORATION, as Seller

TRANSFER AND SERVICING AGREEMENT

Dated as of April 1, 2007

FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES
2007-1

MORTGAGE-BACKED NOTES

TABLE OF CONTENTS

	
 

	
 

	
 

	
Page 

	
 

	

	
 

	
 

	
ARTICLE I
  DEFINITIONS

	
5

	
 

	
 

	
Section
  1.01. Definitions

	
5

	
Section
  1.02. Calculations With Respect to the Mortgage Loans

	
39

	
Section
  1.03. Calculations With Respect to Accrued Interest

	
39

	
 

	
 

	
ARTICLE II
  CONVEYANCE OF MORTGAGE LOANS

	
40

	
 

	
 

	
Section
  2.01. Creation and Declaration of Trust Estate; Conveyance of Mortgage Loans

	
40

	
Section
  2.02. Acceptance of Trust Estate; Review of Documentation

	
43

	
Section
  2.03. Grant Clause

	
45

	
Section
  2.04. [Reserved]

	
46

	
Section
  2.05. Option to Contribute Derivative Instrument

	
46

	
 

	
 

	
ARTICLE III
  REPRESENTATIONS AND WARRANTIES

	
47

	
 

	
 

	
Section
  3.01. Representations and Warranties of the Depositor and the Seller

	
47

	
Section
  3.02. Discovery of Breach

	
49

	
Section
  3.03. Repurchase, Purchase or Substitution of Mortgage Loans

	
49

	
 

	
 

	
ARTICLE IV
  ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS BY THE SERVICER

	
50

	
 

	
 

	
Section
  4.01. Seller’s Engagement of Servicer to Perform Servicing Responsibilities

	
50

	
Section
  4.02. Servicing of the Mortgage Loans

	
51

	
Section
  4.03. Payments To the Trust Administrator

	
63

	
Section
  4.04. General Servicing Procedures

	
65

	
Section
  4.05. Representations, Warranties and Agreements

	
68

	
Section
  4.06. The Servicer

	
71

	
Section
  4.07. Termination for Cause

	
73

	
Section
  4.08. Successor to Servicer, Miscellaneous Provisions

	
75

	
Section
  4.09. Miscellaneous Servicing Provisions

	
77

	
Section
  4.10. Servicer Advance Facility

	
78

	
Section
  4.11. Sub-Servicing Agreements Between the Servicer and Sub-Servicers

	
81

	
Section
  4.12. Successor Sub-Servicers

	
82

	
Section
  4.13. Sub-Servicing Accounts

	
82

	
 

	
 

	
ARTICLE V ADMINISTRATION OF THE AGREEMENTS BY THE INDENTURE TRUSTEE
  AND TRUST ADMINISTRATOR

	
83

	
 

	
 

	
Section
  5.01. Duties of the Indenture Trustee; Representations and Warranties

	
83

	
Section
  5.02. [Reserved.]

	
85

	
Section
  5.03. [Reserved.]

	
85

	
Section
  5.04. [Reserved.]

	
85

	
Section
  5.05. [Reserved.]

	
85

	
Section
  5.06. [Reserved.]

	
85

	
Section
  5.07. Collection Account

	
85

	
Section
  5.08. Application of Funds in the Collection Account

	
87

i

	
 

	
 

	
Section
  5.09. Reports to Indenture Trustee and Noteholders

	
88

	
Section
  5.10. [Reserved.]

	
91

	
Section
  5.11. Indenture Trustee Liable for Enforcement

	
91

	
Section
  5.12. [Reserved.]

	
91

	
Section
  5.13. [Reserved.]

	
92

	
Section
  5.14. Release of Mortgage Files

	
92

	
Section 5.15. Documents, Records and Funds in Possession of Trust
  Administrator To Be Held for Indenture Trustee

	
92

	
Section
  5.16. Opinion

	
94

	
Section
  5.17. [Reserved]

	
94

	
Section
  5.18. [Reserved]

	
94

	
Section
  5.19. [Reserved]

	
94

	
Section
  5.20. Indenture Trustee To Retain Possession of Certain Insurance Policies
  and Documents

	
94

	
Section 5.21.
  Compensation to the Trust Administrator

	
94

	
Section
  5.22. [Reserved]

	
94

	
Section
  5.23. Reports to the Indenture Trustee

	
94

	
Section
  5.24. [Reserved]

	
95

	
Section
  5.25. [Reserved]

	
95

	
Section
  5.26. Merger or Consolidation

	
95

	
Section
  5.27. Resignation of Indenture Trustee

	
95

	
Section
  5.28. Assignment or Delegation of Duties by the Trust Administrator

	
96

	
Section
  5.29. Limitation on Liability of the Trust Administrator and Others

	
96

	
Section
  5.30. Indemnification; Third-Party Claims

	
97

	
Section
  5.31. [Reserved.]

	
97

	
Section
  5.32. Transfer of Servicing

	
97

	
 

	
 

	
ARTICLE VI
  DEPOSITS AND PAYMENTS TO HOLDERS

	
98

	
 

	
 

	
Section
  6.01. The Collection Account

	
98

	
Section
  6.02. Payments from the Collection Account

	
99

	
Section
  6.03. Net Swap Payments and Net Swap Receipts

	
110

	
Section
  6.04. Control of the Trust Account and Deferred Interest

	
110

	
Section
  6.05. Advances by the Servicer

	
114

	
Section
  6.06. [Reserved]

	
114

	
Section
  6.07. Establishment of Basis Risk Reserve Account

	
114

	
 

	
 

	
ARTICLE VII
  ADMINISTRATION OF THE AGREEMENTS

	
115

	
 

	
 

	
Section
  7.01. Duties of the Trust Administrator

	
115

	
Section 7.02. Duties of the Trust Administrator With Respect to the
  Indenture, the Trust Agreement and this Agreement

	
117

	
Section
  7.03. Records

	
118

	
Section
  7.04. [Reserved.]

	
118

	
Section
  7.05. Additional Information to be Furnished to the Issuing Entity

	
118

	
Section
  7.06. Independence of the Trust Administrator

	
118

	
Section
  7.07. No Joint Venture

	
118

	
Section
  7.08. Other Activities of Trust Administrator and the Depositor

	
118

	
Section
  7.09. Resignation and Removal of Trust Administrator

	
119

ii

	
 

	
 

	
Section
  7.10. Action upon Termination, Resignation or Removal of the Trust
  Administrator

	
120

	
 

	
 

	
ARTICLE VIII
  COMMISSION REPORTING

	
120

	
 

	
 

	
Section
  8.01. Form 10-D

	
120

	
Section
  8.02. Form 10-K

	
122

	
Section
  8.03. Form 8-K

	
123

	
Section
  8.04. DeListing, Amendments and Late Filing

	
125

	
Section
  8.05. Annual Statement of Compliance

	
125

	
Section
  8.06. Annual Assessment

	
126

	
Section
  8.07. Attestation

	
127

	
Section
  8.08. Sarbanes-Oxley Certification

	
127

	
Section
  8.09. Notices

	
128

	
Section
  8.10. Additional Information

	
128

	
Section
  8.11. Intention of the Parties and Interpretation

	
128

	
Section 8.12. Indemnification

	
128

	
 

	
 

	
ARTICLE IX TERMINATION

	
129

	
 

	
 

	
Section
  9.01. Termination

	
129

	
Section
  9.02. Termination Prior to Maturity Date; and Optional Redemption

	
129

	
Section
  9.03. Certain Notices upon Final Payment

	
130

	
Section
  9.04. Beneficiaries

	
130

	
 

	
 

	
ARTICLE X
  MISCELLANEOUS PROVISIONS

	
130

	
 

	
 

	
Section
  10.01. Binding Nature of Agreement; Assignment

	
130

	
Section
  10.02. Entire Agreement

	
130

	
Section
  10.03. Amendment

	
130

	
Section
  10.04. Acts of Noteholders

	
132

	
Section
  10.05. Recordation of Agreement

	
132

	
Section
  10.06. Governing Law

	
132

	
Section
  10.07. Notices

	
132

	
Section
  10.08. Severability of Provisions

	
134

	
Section
  10.09. Indulgences; No Waivers

	
134

	
Section
  10.10. Headings Not To Affect Interpretation

	
134

	
Section
  10.11. Benefits of Agreement

	
134

	
Section
  10.12. Special Notices to the Rating Agencies

	
134

	
Section
  10.13. Counterparts

	
135

	
Section
  10.14. Execution by the Issuing Entity

	
135

iii

ATTACHMENTS

	
 

	
 

	
Exhibit A- 1

	
Form of Initial
  Certification

	
Exhibit A-2

	
Form of Interim
  Certification

	
Exhibit A-3

	
Form of Final
  Certification

	
Exhibit A-4

	
Form of Endorsement

	
Exhibit B-1

	
Form of Swap Agreement

	
Exhibit B-2

	
[RESERVED]

	
Exhibit C

	
Form of Lost Note
  Affidavit

	
Exhibit D

	
Custodial Agreement

	
Exhibit E

	
Custodial Account Letter
  Agreement

	
Exhibit F

	
Escrow Account Letter
  Agreement

	
Exhibit G-1

	
Form of Monthly Remittance
  Advice

	
Exhibit H

	
Form of Power of Attorney

	
Exhibit I

	
[RESERVED]

	
Exhibit J

	
[RESERVED]

	
Exhibit K

	
[RESERVED]

	
Exhibit L

	
Servicing Criteria

	
Exhibit L-1

	
Servicer Form of
  Assessment

	
Exhibit M

	
Additional Form 10-D
  Disclosure

	
Exhibit N

	
Additional Form 10-K
  Disclosure

	
Exhibit O

	
Form 8-K Disclosure
  Information

	
Exhibit P

	
Additional Disclosure
  Information

	
Exhibit Q

	
Form of Annual
  Certification

	
Schedule A

	
Mortgage Loan Schedule

iv

          This
TRANSFER AND SERVICING AGREEMENT, dated as of April 1, 2007 (the “Agreement” or
the “Transfer and Servicing Agreement”), is by and among FIELDSTONE MORTGAGE
INVESTMENT TRUST, SERIES 2007-1, a Delaware statutory trust, as issuing entity
(the “Issuing Entity”), FIELDSTONE MORTGAGE INVESTMENT CORPORATION, a Maryland
corporation, as depositor (the “Depositor”), WELLS FARGO BANK, N.A., as trust
administrator (the “Trust Administrator”) and indenture trustee (the “Indenture
Trustee”), LITTON LOAN SERVICING LP, as servicer (the “Servicer”), and
FIELDSTONE INVESTMENT CORPORATION, as seller (the “Seller”).

PRELIMINARY STATEMENT

          WHEREAS,
the Depositor has acquired all of the rights, title and interest of the Seller
in certain conventional, adjustable rate and fixed rate, residential mortgage
loans identified in Schedule A hereto (the “Mortgage Loans”) on a
servicing-retained basis from the Seller pursuant to the Mortgage Loan Purchase
Agreement, and at the Closing Date is the owner of the Mortgage Loans and the
other property being conveyed by it to the Issuing Entity hereunder for
inclusion in the Trust Estate;

          WHEREAS,
the Depositor has duly authorized the execution and delivery of this Agreement
to provide for the conveyance to the Issuing Entity of the Mortgage Loans and
the other property constituting the Trust Estate;

          WHEREAS,
on the Closing Date, the Depositor will acquire the Notes from the Issuing
Entity as consideration for its transfer to the Issuing Entity of the Mortgage
Loans and the other property constituting the Trust Estate;

          WHEREAS,
pursuant to the Indenture, the Issuing Entity will pledge the Mortgage Loans
and the other property constituting the Trust Estate to the Indenture Trustee
as security for the Notes and the Swap Agreement;

          WHEREAS,
the Servicer has acquired the servicing rights relating to the Mortgage Loans
and has agreed to service the Mortgage Loans pursuant to this Agreement;

          WHEREAS,
the Indenture Trustee shall have the right, under certain circumstances, to
terminate the rights and obligations of the Servicer under this Agreement upon
the occurrence and continuance of a Servicing Event of Default as provided
herein;

          WHEREAS,
the parties hereto acknowledge and agree that the Seller assigned all of its
rights with respect to the Mortgage Loans (other than the servicing rights) to
the Indenture Trustee.

          WHEREAS,
the Issuing Entity has entered into certain agreements in connection with the
issuance of the Notes, including (i) the Depository Agreement and (ii) the
Indenture (the Depository Agreement, the Indenture and the Trust Agreement
being hereinafter referred to collectively as the “Related Agreements”);

          WHEREAS,
pursuant to the Related Agreements, the Issuing Entity is required to perform
certain duties in connection with (a) the Notes and the collateral therefor
pledged

pursuant to
the Indenture (the “Collateral”) and (b) the undivided subordinate beneficial
ownership interest in the Issuing Entity represented by the Ownership
Certificate;

          WHEREAS,
the Issuing Entity desires to have the Trust Administrator perform certain of
the duties of the Issuing Entity referred to in the preceding clause, and to
provide such additional services consistent with the terms of this Agreement
and the Related Agreements as the Issuing Entity or the Owner Trustee may from
time to time reasonably request; and

          WHEREAS,
the Trust Administrator has the capacity to provide the services required
hereby and is willing to perform such services for the Issuing Entity or the
Owner Trustee on the terms set forth herein.

          NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

          The
following table sets forth (or describes) the Class designation, Interest Rate,
initial Class Principal Amount and minimum denomination for each Class of Notes
issued pursuant to the Indenture.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Class

  Designation

	
 

	
Interest Rate

	
 

	
Initial

  Security Principal

  Amount

	
 

	
Minimum

  Denominations

	
 

	

	

	
 

	

	
 

	

	

	
 

	

	

	
 

	
 

	
Class 1-A

	
 

	
(1

	
)

	
 

	
 

	
$

	
124,711,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class 2-A1

	
 

	
(2

	
)

	
 

	
 

	
$

	
92,056,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class 2-A2

	
 

	
(3

	
)

	
 

	
 

	
$

	
50,000,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class 2-A3

	
 

	
(4

	
)

	
 

	
 

	
$

	
20,763,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M1

	
 

	
(6

	
)

	
 

	
 

	
$

	
13,434,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M2

	
 

	
(7

	
)

	
 

	
 

	
$

	
12,128,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M3

	
 

	
(8

	
)

	
 

	
 

	
$

	
7,650,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M4

	
 

	
(9

	
)

	
 

	
 

	
$

	
6,717,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M5

	
 

	
(10

	
)

	
 

	
 

	
$

	
6,158,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M6

	
 

	
(11

	
)

	
 

	
 

	
$

	
5,597,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M7

	
 

	
(12

	
)

	
 

	
 

	
$

	
5,785,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M8

	
 

	
(13

	
)

	
 

	
 

	
$

	
5,224,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M9

	
 

	
(14

	
)

	
 

	
 

	
$

	
3,918,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
Class M10

	
 

	
(15

	
)

	
 

	
 

	
$

	
4,105,000

	
 

	
 

	
 

	
$

	
100,000

	
 

	
 

	
 

	
 

	
(1)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class 1-A Notes is the per annum rate equal to the least of (i) LIBOR
  plus 0.2575% per annum, (ii) the Available Funds Rate and (iii) the Fixed
  Rate Cap for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class 1-A Notes will be equal to LIBOR plus 0.515% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(2)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class 2-A1 Notes is the per annum rate equal to the least of (i) LIBOR
  plus 0.11% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate
  Cap for such Payment Date;

2

	
 

	
 

	
 

	
provided, that the per annum rate calculated
  pursuant to clause (i) above with respect to the Class 2-A1 Notes will be
  equal to LIBOR plus 0.22% per annum beginning on the Stepup Date and each
  Payment Date thereafter.

	
 

	
 

	
(3)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class 2-A2 Notes is the per annum rate equal to the least of (i) LIBOR
  plus 0.27% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate
  Cap for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class 2-A2 Notes will be equal to LIBOR plus 0.54% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(4)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class 2-A3 Notes is the per annum rate equal to the least of (i) LIBOR
  plus 0.34% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate
  Cap for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class 2-A3 Notes will be equal to LIBOR plus 0.68% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(5)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M1 Notes is the per annum rate equal to the least of (i) LIBOR plus
  0.39% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M1 Notes will be equal to LIBOR plus 0.585% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(6)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M2 Notes is the per annum rate equal to the least of (i) LIBOR plus
  0.45% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M2 Notes will be equal to LIBOR plus 0.675% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(7)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M3 Notes is the per annum rate equal to the least of (i) LIBOR plus
  0.55% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M3 Notes will be equal to LIBOR plus 0.825% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(8)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M4 Notes is the per annum rate equal to the least of (i) LIBOR plus
  0.90% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M4 Notes will be equal to LIBOR plus 1.35% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

3

	
 

	
 

	
(9)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M5 Notes is the per annum rate equal to the least of (i) LIBOR plus
  1.00% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M5 Notes will be equal to LIBOR plus 1.50% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(10)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M6 Notes is the per annum rate equal to the least of (i) LIBOR plus
  1.50% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M6 Notes will be equal to LIBOR plus 2.25% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(11)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M7 Notes is the per annum rate equal to the least of (i) LIBOR plus
  2.25% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M7 Notes will be equal to LIBOR plus 3.375% per annum beginning
  on the Stepup Date and each Payment Date thereafter. 

	
 

	
 

	
(12)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M8 Notes is the per annum rate equal to the least of (i) LIBOR plus
  2.25% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M8 Notes will be equal to LIBOR plus 3.375% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(13)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M9 Notes is the per annum rate equal to the least of (i) LIBOR plus
  2.25% per annum, (ii) the Available Funds Rate and (iii) the Fixed Rate Cap
  for such Payment Date; provided,
  that the per annum rate calculated pursuant to clause (i) above with respect
  to the Class M9 Notes will be equal to LIBOR plus 3.375% per annum beginning
  on the Stepup Date and each Payment Date thereafter.

	
 

	
 

	
(14)

	
The Interest
  Rate with respect to any Payment Date (and the related Accrual Period) for
  the Class M10 Notes is the per annum rate equal to the least of (i) 7.000%
  and (ii) the Available Funds Rate for such Payment Date; provided, that the per annum rate set
  forth in clause (i) above will increase to 7.500% beginning on the Stepup
  Date and each Payment Date thereafter.

4

ARTICLE I

DEFINITIONS

          Section
1.01. Definitions. The following words and phrases, unless the context
otherwise requires, shall have the following meanings:

          Accounts.
Any or all of the Custodial Accounts, Escrow Accounts, Collection Account,
Basis Risk Reserve Account, and any other accounts created or maintained by the
Trust Administrator or the Servicer pursuant to this Agreement.

          Accountant:
A Person engaged in the practice of accounting who (except when this Agreement
provides that an Accountant must be Independent) may be employed by or
affiliated with the Depositor or an Affiliate of the Depositor.

          Accrual
Period: With respect to any Payment Date and any Class of Notes (other than
the Class M10 Notes), the period beginning on the Payment Date in the calendar
month immediately preceding the month in which the related Payment Date occurs
(or, in the case of the first Payment Date, beginning on the Closing Date) and
ending on the day immediately preceding the related Payment Date, and in the
case of the Class M10 Notes, the calendar month preceding the month in which
such Payment Date occurs.

          Additional
Disclosure Notification: As defined in Section 8.01 hereof.

          Additional
Form 10-D Disclosure: As defined in Section 8.01 hereof.

          Additional
Form 10-K Disclosure: As defined in Section 8.02 hereof.

          Advance:
As to any First Lien Mortgage Loan, Second Lien Mortgage Loan or REO Property,
any advance made by the Servicer pursuant to Section 6.05.

          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
Collateral Balance: As of any date of determination (other than the Closing
Date), an amount equal to the Aggregate Loan Balance. As of the Closing Date,
an amount equal to the sum of the Aggregate Loan Balance as of the Cut-off
Date.

          Aggregate
Expense Rate: With respect to any Mortgage Loan, the sum of the Servicing
Administration Fee Rate and the Trust Administration Fee Rate.

          Aggregate
Loan Balance: As of any date of determination, an amount equal to the aggregate
of the Stated Principal Balances of the Mortgage Loans as of such date.

5

          Aggregate
Overcollateralization Release Amount: With respect to any Payment Date, the
lesser of (x) the sum of the Principal Funds of each Mortgage Group for such
Payment Date and (y) the amount, if any, by which (1) the Overcollateralization
Amount for such Payment Date (calculated for this purpose on the basis of the
assumption that 100% of the aggregate of the Principal Funds of both Mortgage
Groups for such date is applied on such Payment Date in reduction of the
aggregate of the Note Principal Amounts of the related Notes) exceeds (2) the
Targeted Overcollateralization Amount for such Payment Date.

          Agreement:
This Agreement and all amendments and supplements hereto.

          Ancillary Income: All income derived from the
Mortgage Loans, excluding Prepayment Premiums, Servicing Administration Fees
and Trust Administration Fees attributable to the Mortgage Loans and other
amounts treated as payment proceeds of the Mortgage Loans, including but not
limited to, late charges, fees received with respect to checks or bank drafts
returned by the related bank for non-sufficient funds, assumption fees,
optional insurance administrative fees and all other incidental fees and
charges.

          Appraised
Value: With respect to any Mortgage Loan, the amount set forth in an
appraisal made in connection with the origination of such Mortgage Loan as the
value of the related Mortgaged Property.

          Assignment
of Mortgage: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
assignment of the Mortgage to the Indenture Trustee for the benefit of
Noteholders and the Swap Counterparty, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided,
however, that neither the Issuing Entity nor the Indenture Trustee
shall be responsible for determining whether any such assignment is in
recordable form.

          Authorized
Officer: Any Person who may execute an Officer’s Certificate on behalf of
the Issuing Entity.

          Available
Funds Rate: With respect to any Payment Date and for any Class of Notes, a
per annum rate equal to the quotient of (a) the excess, if any, of (1) the sum
of (A) Interest Funds for Group 1 and (B) the Interest Funds for Group 2, over
(2) any Net Swap Payments or swap termination amounts payable to the Swap
Counterparty for such Payment Date pursuant to Section 6.02(b)(i)-(ii) or
Section 6.02(c)(i)-(ii) hereof, as applicable, and any Final Maturity Reserve
Amounts payable pursuant to Section 6.02(b)(iii)-(iv) or Section
6.02(c)(iii)-(iv), as applicable, divided by (b) the product of (i) the sum of
the Class Principal Amounts of the Class 1-A, Class 2-A1, Class 2-A2, Class
2-A3, Class M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class M7,
Class M8, Class M9 and Class M10 Notes before taking into account any payments
of principal on such Payment Date, and (ii) a fraction, the numerator of which
is the actual number of days in the related Accrual Period (or, in the case of
the Class M10 Notes, the numerator of which is 30), and the denominator of
which is 360.

6

          Available
Funds Shortfall: With respect to any Class of Notes and any Payment Date,
the sum of (a) the excess, if any, of (i) the amount that would have been the
Current Interest for such Class had the Interest Rate for such Class been
determined without regard to the Available Funds Rate over (ii) the actual
amount of Current Interest for such Class, plus (b) any excess described in
clause (a) above and interest described in clause (c) below for any prior
Payment Date that remains unpaid, plus (c) interest accrued during the Accrual
Period related to such Payment Date on the amount described in clause (b) above
at the Interest Rate applicable to such Class, determined without regard to the
Available Funds Rate.

          Balloon
Loans: Those Mortgage Loans listed on Schedule II of the Mortgage Loan
Purchase Agreement.

          Bankruptcy:
As to any Person, the making of an assignment for the benefit of creditors, the
filing of a voluntary petition in bankruptcy, adjudication as a bankrupt or
insolvent, the entry of an order for relief in a bankruptcy or insolvency
proceeding, the seeking of reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief, or seeking,
consenting to or acquiescing in the appointment of a trustee, receiver or
liquidator, dissolution, or termination, as the case may be, of such Person
pursuant to the provisions of either the United States Bankruptcy Code of 1986,
as amended, or any other similar state laws.

          Bankruptcy
Code: The United States Bankruptcy Code of 1986, as amended.

          Basis
Risk Reserve Account: A separate account established and maintained by the
Trust Administrator for the benefit of the Noteholders pursuant to Section
6.07.

          Book-Entry
Notes: As defined in the Indenture.

          Business
Day: Except with respect to the Swap Agreement, any day other than (i) a
Saturday or a Sunday or (ii) a day on which banking institutions in New York,
New York or, if other than New York, the city in which the Corporate Trust
Office of the Indenture Trustee is located, the state in which the Servicer’s
servicing operations are located, or the States of California, Delaware,
Maryland, Minnesota or Texas are authorized or obligated by law or executive
order to be closed. With respect to the Swap Agreement, “Business Day” means
any day other than (a) a Saturday or Sunday or (b) a day on which banking
institutions in the City of New York, New York or London, England are
authorized or obligated by law or executive order to be closed. 

          Calculation
Period End Date: With respect to the Swap Agreement, the day of the month
specified in the respective schedule attached thereto.

          Certificate:
The Ownership Certificate.

          Certificateholder:
Any registered holder of the Ownership Certificate.

          Certificate
Registrar: As defined in the Trust Agreement, the initial Certificate
Registrar shall be the Trust Administrator.

          Certification
Parties: The meaning set forth in Section 8.08.

7

          Certifying
Person: The meaning set forth in Section 8.08.

          Charged
Off Loan: Any Second Lien Mortgage Loan that is charged off by the Servicer
pursuant to Section 4.02(p).

          Civil
Relief Act: The Servicemembers Civil Relief Act, as such may be amended
from time to time, and any similar state laws.

          Class:
All Notes bearing the same class designation.

          Class
A Notes: Collectively, the Class 1-A, Class 2-A1, Class 2-A2 and Class 2-A3
Notes.

          Class
M Notes: Collectively, the Class M1, Class M2, Class M3, Class M4, Class
M5, Class M6, Class M7, Class M8, Class M9 and Class M10 Notes.

          Class
Principal Amount: With respect to each Class of Notes, the aggregate of the
Note Principal Amounts of all Notes of such Class at the date of determination.

          Clearing
Agency: An organization registered as a “clearing agency” pursuant to
Section 17A of the Exchange Act, as amended. As of the Closing Date, the
Clearing Agency shall be The Depository Trust Company.

          Closing
Date: April 12, 2007.

          Code:
The Internal Revenue Code of 1986, as amended, and as it may be further amended
from time to time, any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto in temporary or
final form.

          Collateral:
As defined in the Indenture.

          Collection
Account: A separate account established and maintained by the Trust
Administrator pursuant to Section 5.07.

          Commission:
The U.S. Securities and Exchange Commission.

          Compensating
Interest Payment: With respect to any Payment Date and any Principal
Prepayment in full, an amount equal to the lesser of (x) the aggregate
Prepayment Interest Shortfall Amount with respect to such Payment Date and (y)
one-half of the Servicing Administration Fee payable to the Servicer in respect
of such Payment Date.

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

          Control:
The meaning specified in Section 8-106 of the New York UCC.

8

          Conventional
Loan: A Mortgage Loan that is not insured by the United States Federal
Housing Administration or guaranteed by the United States Department of
Veterans Affairs.

          Corporate
Trust Office: With respect to (i) the Trust Administrator and the Indenture
Trustee, the principal corporate trust office of the Trust Administrator at
which, at any particular time, its corporate trust business shall be
administered, which office at the date of execution of this Agreement for
purposes of transfers and exchanges and for presentment and surrender of the
Notes and for payment thereof is located at Wells Fargo Bank, N.A., Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Client
Service Manager (Fieldstone 2007-1), and for all other purposes is located at
Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046, Attention:
Client Service Manager (FIELDSTONE 2007-1) (or for overnight deliveries, at
9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Client Service
Manager (FIELDSTONE 2007-1)); (ii) the Certificate Registrar, the principal
office of the Certificate Registrar at which at any particular time its
corporate trust business shall be administered, which office at the date of
execution of this Agreement is located at the Corporate Trust Office of the Trust Administrator, or at such other address
as the Certificate Registrar may designate from time to time by notice to the
Noteholder, the Trust and the Swap Counterparty, or the principal corporate
trust office of any successor Certificate Registrar at the address designated
by such successor Certificate Registrar by notice to the Noteholders, the Trust
and the Swap Counterparty.

          Current
Interest: With respect to any Class of Notes and any Payment Date, the
aggregate amount of interest accrued at the applicable Interest Rate during the
related Accrual Period on the Class Principal Amount of such Class immediately
prior to such Payment Date, provided,
however, that for any Class of
Class M Notes and for any Payment Date, Current Interest shall be reduced by
the amount specified in clause (a) of the definition of Deferred Interest
(calculated for purposes of this definition with the imposition of the
Available Funds Rate), if any, for such Class and Payment Date.

          Custodial
Account: The separate custodial account (other than an Escrow Account)
established and maintained by the Servicer pursuant to Section 4.02(d) of this
Agreement.

          Custodial
Agreement: The custodial agreement relating to the custody of certain of
the Mortgage Loans, substantially in the form attached as Exhibit D hereto,
between the Custodian, the Issuing Entity and the Indenture Trustee, as
acknowledged by the Seller, the Depositor, the Trust Administrator and the
Servicer, dated as of April 1, 2007.

          Custodian:
The custodian appointed by the Indenture Trustee pursuant to the Custodial
Agreement, and any successor thereto. The initial Custodian is Wells Fargo
Bank, N.A..

          Cut-off
Date: April 1, 2007.

          Cut-off
Date Balance: With respect to the Mortgage Loans, the Aggregate Loan
Balance as of the Cut-off Date.

          Debt
Service Reduction: With respect to any Mortgage Loan, a reduction of the
Scheduled Payment that the related Mortgagor is obligated to pay on any Due
Date as a result of any proceeding under Bankruptcy law or any similar
proceeding.

9

          Deferred
Interest: For any Class of Class M Notes and any Payment Date, the sum of
(a) the aggregate amount of interest accrued at the applicable Interest Rate
(determined without regard to the Available Funds Rate) during the related
Accrual Period on the Principal Deficiency Amount for the Class, (b) any
amounts due pursuant to clause (a) and interest described in clause (c) below
for such Class for prior Payment Dates that remain unpaid and (c) interest
accrued during the Accrual Period related to such Payment Date on the amount in
clause (b) at the Interest Rate applicable to such Class determined without
regard to the Available Funds Rate.

          Definitive
Note: A Note of any Class issued in definitive, fully registered,
certificated form.

          Deleted
Mortgage Loan: A Mortgage Loan that is repurchased from the Trust Estate
pursuant to the terms hereof or as to which one or more Qualifying Substitute
Mortgage Loans are substituted therefor.

          Depositor:
Fieldstone Mortgage Investment Corporation, a Maryland corporation having its
principal place of business in Columbia, Maryland, or its successors in
interest.

          Depository
Agreement: The agreement dated April 12, 2007, among the Issuing Entity,
the Indenture Trustee and The Depository Trust Company, as the initial Clearing
Agency, relating to the Book-Entry Notes.

          Determination
Date: With respect to each Payment Date, the 15th day of the month in which
such Payment Date occurs, or, if such 15th day is not a Business Day, the
immediately succeeding Business Day.

          Due
Date: The day of the calendar month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace. Pursuant to Section
4.02(d), with respect to any Mortgage Loans for which payment from the
Mortgagor is due on a day other than the first day of the month, such Mortgage
Loans will be treated as if the Scheduled Payment is due on the first day of
the immediately succeeding month.

          Due
Period: With respect to any Payment Date and Mortgage Loan, the period
commencing on the second day of the month immediately preceding the month in
which such Payment Date occurs and ending on the first day of the month in
which such Payment Date occurs.

          Eligible
Account: Either (i) an account or accounts maintained with a federal or
state chartered depository institution or trust company that complies with the
definition of Eligible Institution or (ii) an account or accounts the deposits
in which are insured by the FDIC to the limits established by such corporation,
provided that any such deposits not so insured shall be maintained in an
account at a depository institution or trust company whose commercial paper or
other short term debt obligations (or, in the case of a depository institution
or trust company which is the principal subsidiary of a holding company, the
commercial paper or other short term debt or deposit obligations of such
holding company or depository institution, as the case may be) have been rated
by each Rating Agency in its highest short-term rating category, or (iii) a
segregated trust account or accounts (which shall be a “special deposit
account”) maintained

10

with the
Indenture Trustee, the Trust Administrator or any other federal or state
chartered depository institution or trust company, acting in its fiduciary
capacity, in a manner acceptable to the Indenture Trustee and the Rating
Agencies. Eligible Accounts may bear interest.

          Eligible
Institution: Any of the following:

	
   

  	
   

  
	
   

  	
  (i) An
  institution whose:

  
	
   

  	
   

  
	
   

  	
            (1)
  commercial paper, short-term debt obligations, or other short-term deposits
  are rated at least “A-1+” or long-term unsecured debt obligations are rated
  at least “AA-” by S&P (or assigned comparable ratings by the other Rating
  Agencies), if the amounts on deposit are to be held in the account for no
  more than 365 days; or

  
	
   

  	
   

  
	
   

  	
            (2)
  commercial paper, short-term debt obligations, demand deposits, or other
  short-term deposits are rated at least “A-2” by S&P (or assigned
  comparable ratings by the other Rating Agencies), if the amounts on deposit
  are to be held in the account for no more than 30 days and are not intended
  to be used as credit enhancement. Upon the loss of the required rating set
  forth in this clause (ii), the accounts shall be transferred immediately to
  accounts which have the required rating. Furthermore, commingling by the
  Servicer is acceptable at the A-2 rating level if the Servicer is a bank,
  thrift or depository and provided the Servicer has the capability to
  immediately segregate funds and commence remittance to an Eligible Deposit
  Account upon a downgrade; or

  

                     (ii)
the corporate trust department of a federal depositor institution or
state-chartered depositor institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity.

          Eligible
Investments: Any one or more of the following obligations or securities:

                     (i)
direct obligations of, and obligations fully guaranteed as to timely payment of
principal and interest 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 (“Direct
Obligations”);

                     (iii)
federal funds, or demand and time deposits in, certificates of deposits of, or
bankers’ acceptances issued by, any depository institution or trust company
(including U.S. subsidiaries of foreign depositories and the Indenture Trustee
or any agent of the Indenture Trustee, acting in its respective commercial
capacity) incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal or state banking authorities, so long as at the time of investment or
the contractual commitment providing for such investment the commercial paper
or other short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company which is
the principal subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or 

11

deposit
institution, as the case may be) have been rated by each Rating Agency in its
highest short-term rating category or one of its two highest long-term rating
categories;

                     (iv)
repurchase agreements collateralized by Direct Obligations or securities
guaranteed by Ginnie Mae, Fannie Mae or FHLMC with any registered broker/dealer
subject to Notes Investors’ Protection Corporation jurisdiction or any
commercial bank insured by the FDIC, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed obligation rated by each Rating Agency in
its highest short-term rating category;

                    (v)
securities bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state
thereof which have a credit rating from each Rating Agency, at the time of
investment or the contractual commitment providing for such investment, at
least equal to one of the two highest long-term credit rating categories of
each Rating Agency; provided, however,
that securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and held
as part of the Trust Estate to exceed 20% of the sum of the Aggregate Loan
Balance and the aggregate principal amount of all Eligible Investments in the
Collection Account; provided, further,
that such securities will not be Eligible Investments if they are published as
being under review with negative implications from any Rating Agency;

                    (vi)
commercial paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than 180 days after the date of issuance thereof) rated by each Rating Agency
in its highest short-term rating category;

                    (vii)
a Qualified GIC;

                    (viii)
certificates or receipts representing direct ownership interests in future
interest or principal payments on obligations of the United States of America
or its agencies or instrumentalities (which obligations are backed by the full
faith and credit of the United States of America) held by a custodian in
safekeeping on behalf of the holders of such receipts; and

                    (ix)
any other demand, money market, common trust fund or time deposit or
obligation, or interest-bearing or other security or investment (including
those managed or advised by the Indenture Trustee, the Trust Administrator, or
any Affiliate thereof), (A) rated in the highest rating category by each Rating
Agency or (B) that would not adversely affect the then current rating assigned
by each Rating Agency of any of the Notes. Such investments in this subsection
(viii) may include money market mutual funds or common Trust Estates, including
any fund for which Wells Fargo Bank, N.A. (the “Bank”) in its capacity other
than as Indenture Trustee, the Trust Administrator or an affiliate thereof
serves as an investment advisor, administrator, shareholder servicing agent,
and/or custodian or subcustodian, notwithstanding that (x) the Bank, the
Indenture Trustee, the Trust Administrator or any affiliate thereof charges and
collects fees and expenses from such funds for services rendered, (y) the Bank,
the Indenture Trustee, the Trust Administrator or any affiliate thereof charges
and collects fees and expenses for services rendered pursuant to this
Agreement, and (z) services performed for such funds and pursuant to this
Agreement may converge at any time. The Indenture Trustee specifically 

12

authorizes the
Bank or an affiliate thereof to charge and collect from the Indenture Trustee
such fees as are collected from all investors in such funds for services
rendered to such funds (but not to exceed investment earnings thereon);

          provided,
however, that no such instrument shall be an Eligible
Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument,
or (ii) both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with respect
to such instrument provide a yield to maturity of greater than 120% of the
yield to maturity at par of such underlying obligations.

          Entitlement
Holder: The meaning specified in Section 8-102(a)(7) of the New York UCC.

          Entitlement
Order: The meaning specified in Section 8-102(a)(8) of the New York UCC (i.e., generally, orders directing the
transfer or redemption of any Financial Asset).

          Environmental
Problem Property: A Mortgaged Property or REO Property that is in violation
of any environmental law, rule or regulation.

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

          Errors
and Omissions Insurance: Errors and Omissions Insurance to be maintained by
the Servicer in accordance with Section 4.02(m).

          Errors
and Omission Insurance Policy: Any Errors and Omission Insurance policy
required to be obtained by the Servicer satisfying the requirements of this
Agreement.

          Escrow
Account: The separate escrow account (other than a Custodial Account)
established and maintained by the Servicer pursuant to Section 4.02(f) of this
Agreement.

          Escrow
Payments: With respect to any First Lien Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.

          Event
of Default: A Servicer Event of Default.

          Exchange
Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.

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

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

13

          FIC:
Fieldstone Investment Corporation.

          Fidelity
Bond: Any fidelity bond to be maintained by the Servicer in accordance with
Section 4.02(m).

          Financial
Asset: The meaning specified in Section 8-102(a) of the New York UCC.

          First
Lien Mortgage Loan: Any of the Mortgage Loans which are secured by a first
mortgage lien on the related Mortgaged Property.

          Fixed
Rate Cap: With respect to a Payment Date, the per annum rate equal to
12.250%.

          Form
8-K Disclosure Information: Has the meaning set forth in Section 8.03.

          Freddie
Mac or FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

          Ginnie
Mae: The Government National Mortgage Association, a wholly owned corporate
instrumentality of the United States within HUD.

          Group
1: The portion of the Mortgage Pool identified as Group 1.

          Group
1 Percentage: With respect to Group 1 and any Payment Date, the fraction,
expressed as a percentage, the numerator of which is the Group Balance for
Group 1 for such date and the denominator of which is the Aggregate Collateral
Balance for such date.

          Group
2: The portion of the Mortgage Pool identified as Group 2.

          Group
2 Percentage: With respect to Group 2 and any Payment Date, the fraction,
expressed as a percentage, the numerator of which is the Group Balance for
Group 2 for such date and the denominator of which is the Aggregate Collateral
Balance for such date.

          Group
Balance: With respect to each Mortgage Group and any Payment Date, the aggregate
of the Stated Principal Balances of the Mortgage Loans in such Mortgage Group.

          Guidelines:
As defined in Section 4.02(u).

          Holder
or Noteholder: The registered holder of any Note or Ownership
Certificate as recorded on the books of the Note Registrar or the Certificate
Registrar except that, solely for the purposes of taking any action or giving
any consent pursuant to this Agreement, any Note registered in the name of the
Depositor, the Servicer, the Trust Administrator or the Indenture Trustee or
any Affiliate thereof (unless any such Person owns 100% of a Class) shall be
deemed not to be outstanding in determining whether the requisite percentage
necessary to effect any such consent has been obtained, except that, in
determining whether the Indenture Trustee shall be protected in relying upon
any such consent, only Notes and an Ownership Certificate which a Responsible
Officer of the Indenture Trustee knows to be so held shall be disregarded. The
Indenture Trustee may request and conclusively rely on certifications by the
Depositor in 

14

determining
whether any Note, or Ownership Certificate are registered to an Affiliate of
the Depositor.

          HUD:
The United States Department of Housing and Urban Development, or any successor
thereto.

          Indenture:
The Indenture dated as of April 1, 2007, among the Issuing Entity, the Trust
Administrator and the Indenture Trustee, as such may be amended or supplemented
from time to time.

          Indenture
Events of Default: As defined in Section 5.01 of the Indenture.

          Indenture
Trustee: Wells Fargo Bank, N.A., not in its individual capacity but solely
as Indenture Trustee, or any successor in interest.

          Independent:
When used with respect to any Accountants, a Person who is “independent” within
the meaning of Rule 2-01(b) of the Securities and Exchange Commission’s
Regulation S-X. When used with respect to any other Person, a Person who (a) is
in fact independent of another specified Person and any Affiliate of such other
Person, (b) does not have any material direct financial interest in such other
Person or any Affiliate of such other Person, (c) is not connected with such
other Person or any Affiliate of such other Person as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions, and (d) is not a member of the immediate family of a Person defined
in clause (b) or (c) above.

          Index:
The index specified in the related Mortgage Note for calculation of the
Mortgage Rate thereof.

          Insurance
Policy: Any primary mortgage insurance policy, any standard hazard
insurance policy, flood insurance policy, earthquake insurance policy or title
insurance policy relating to the Mortgage Loans or the Mortgaged Properties, to
be in effect as of the Closing Date or thereafter during the term of this
Agreement.

          Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of insurance
policies insuring the Mortgage Loan or the related Mortgaged Property, if
applicable, including the proceeds of any hazard or flood insurance policy
reduced by expenses incurred by the Servicer in connection with procuring such
proceeds, applied to the restoration and repair of the related Mortgaged
Property or to be paid to the related Mortgagor pursuant to the Mortgage Note
or applicable state law.

          Interest
Funds: With respect to each Mortgage Group and any Payment Date, (a) the
sum of, without duplication, (1) all interest collected (other than the
interest portion of Payaheads and Prepayment Premiums) or advanced in respect
of Scheduled Payments on the Mortgage Loans in such Mortgage Group during the
related Due Period by the Servicer, minus,
(x) to the extent provided under Sections 4.02(e)(3) and (4) and Sections
5.08(i) and (ii) herein, previously unreimbursed Advances and Nonrecoverable
Advances due to the Servicer to the extent allocable to interest and the
allocable portion of previously unreimbursed Servicing Advances with respect to
the Mortgage Loans in such Mortgage Group, (y) the Servicing Administration 

15

Fee and Trust
Administration Fee with respect to the Mortgage Loans and (z) any fees and
expenses of any Custodian with respect to the Mortgage Loans in such Mortgage
Group to the extent not paid by the Seller or its Affiliates, (2) any
Compensating Interest Payments relating to the related Prepayment Period with
respect to the Mortgage Loans in such Mortgage Group, (3) the portion of any
Purchase Price or Substitution Amount paid with respect to the Mortgage Loans
in such Mortgage Group during the related Prepayment Period allocable to
interest and (4) all Net Liquidation Proceeds, Insurance Proceeds and any other
recoveries collected with respect to the Mortgage Loans in such Mortgage Group
during the related Prepayment Period, to the extent allocable to interest, as
reduced by the Group 1 Percentage or Group 2 Percentage, as applicable, of (1)
the Owner Trustee Fee, (2) any costs, expenses or liabilities reimbursable or
otherwise due to the Servicer, the Indenture Trustee, any Custodian, the Owner
Trustee or the Trust Administrator to the extent provided in this Agreement,
the Trust Agreement, the Indenture and any Custodial Agreement, (3) any Net
Swap Payment for such Payment Date and any swap termination amounts paid to the
Swap Counterparty in the event that the Issuing Entity is a defaulting party or
affected party under the terms of the Swap Agreement, in each case, to the
extent paid from amounts on deposit in the Collection Account and (4) any other
fees and expenses payable from amounts on deposit in the Collection Account and
any of the Custodial Accounts.

          Interest
Margin: For each Class of Notes (other than the Class M10 Notes), for any
Payment Date prior to the Stepup Date, the following per annum rate: Class 1-A,
0.2575%; Class 2-A1, 0.11%; Class 2-A2, 0.27%; Class 2-A3, 0.34%; Class M1,
0.39%; Class M2, 0.45%; Class M3, 0.55%; Class M4, 0.90%; Class M5, 1.00%;
Class M6, 1.50%; Class M7, 2.25%; Class M8, 2.25%; and Class M9, 2.25%; and on
any Payment Date on or following the Stepup Date: Class 1-A, 0.515%; Class
2-A1, 0.22%, Class 2-A2, 0.54%; Class 2-A3, 0.08%; Class M1, 0.585%; Class M2,
0.675%; Class M3, 0.825%; Class M4, 1.35%; Class M5, 1.50%; Class M6, 2.25%;
Class M7, 3.375%; Class M8, 3.375%; and Class M9, 3.375%.

          Interest
Rate: With respect to (a) each Class of Notes (other than the Class M10
Notes) on any Payment Date, the least of (1) LIBOR plus the Interest Margin for
such Class, (2) the Available Funds Rate and (3) the Fixed Rate Cap and (b) the
Class M10 Notes, the lesser of (1) a per annum rate of 7.000% and (2) the
Available Funds Rate, provided that the per annum rate in clause (b)(1) above
will increase to 7.500% beginning on the Stepup Date and each Payment Date
thereafter.

          Intervening
Assignments: The original intervening assignments of the Mortgage, notices
of transfer or equivalent instrument.

          Issuer
Order or Issuer Request: A written order or request signed in the
name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.

          Issuing
Entity: The Delaware statutory trust known as the “Fieldstone Mortgage
Investment Trust, Series 2007-1.”

          LIBOR:
(a) With respect to the first Accrual Period, the per annum rate of 5.3200%.
With respect to each subsequent Accrual Period, a per annum rate determined on
the LIBOR Determination Date in the following manner by the Trust Administrator
on the basis of the 

16

“Interest
Settlement Rate” set by the British Bankers’ Association (the “BBA”) for
one-month United States dollar deposits, as such rates appear on the Telerate
Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date.

          (b)
If on such a LIBOR Determination Date, the BBA’s Interest Settlement Rate does
not appear on the Telerate Page 3750 as of 11:00 a.m. (London time), or if the
Telerate Page 3750 is not available on such date, the Trust Administrator will
determine such rate on the basis of the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the
Reuters Screen LIBO Page, as of 11:00 a.m. (London time) on such LIBOR
Determination Date.

          (c)
If LIBOR is determined under clause (b) above, on each LIBOR Determination
Date, LIBOR for the related Accrual Period for the Notes will be established by
the Trust Administrator as follows:

	
   

  	
   

  
	
   

  	
            (1)
  If on such LIBOR Determination Date two or more Reference Banks provide such
  offered quotations, LIBOR for the related Accrual Period for the Notes shall
  be the arithmetic mean of such offered quotations (rounded upwards if
  necessary to the nearest whole multiple of 0.03125%).

  
	
   

  	
   

  
	
   

  	
            (2)
  If on such LIBOR Determination Date fewer than two Reference Banks provide
  such offered quotations, LIBOR for the related Accrual Period shall be the
  higher of (x) LIBOR as determined on the previous LIBOR Determination Date
  and (y) the Reserve Interest Rate.

  

          (d)
The establishment of LIBOR by the Trust Administrator and the Trust
Administrator’s subsequent calculation of the Interest Rate applicable to the
LIBOR Notes for the relevant Accrual Period, in the absence of manifest error,
will be final and binding.

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

          LIBOR
Determination Date: The second LIBOR Business Day immediately preceding the
commencement of each Accrual Period for any LIBOR Notes.

          LIBOR
Note: Any Class 1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class
M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8 or Class M9
Note.

          Liquidated
Mortgage Loan: Any Charged Off Loan and any other defaulted Mortgage Loan
as to which the Servicer has determined that all amounts that it expects to
recover from or on account of such Mortgage Loan or disposition of the related
REO Property have been recovered.

          Liquidation
Expenses: Expenses that are incurred by the Servicer in connection with the
liquidation of any defaulted Mortgage Loan and are not recoverable under the
applicable primary mortgage insurance policy, if any, including, without
limitation, foreclosure and rehabilitation expenses, legal expenses and
unreimbursed amounts, if any, expended pursuant to Section 4.02.

17

          Liquidation
Proceeds: Cash received in connection with the liquidation of a defaulted
Mortgage Loan (other than amounts received with respect to the rental of any
REO Property prior to REO Disposition), whether through the sale or assignment
of such Mortgage Loan, trustee’s sale, foreclosure sale, payment in full,
discounted payoff or otherwise, or the sale of the related REO Property, if the
Mortgaged Property is acquired in satisfaction of the Mortgage Loan.

          Litton:
Litton Loan Servicing LP or any successor thereto appointed hereunder in
connection with the servicing and administration of the Mortgage Loans.

          M1
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M2 Principal Deficiency Amount, (ii) the M3 Principal
Deficiency Amount, (iii) the M4 Principal Deficiency Amount, (iv) the M5
Principal Deficiency Amount, (v) the M6 Principal Deficiency Amount, (vi) the
M7 Principal Deficiency Amount, (vii) the M8 Principal Deficiency Amount,
(viii) the M9 Principal Deficiency Amount and (ix) the M10 Principal Deficiency
Amount, in each case for that Payment Date and (b) the Class Principal Amount
of the Class M1 Notes immediately prior to such Payment Date.

          M1
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes, in each case after giving effect to
payments on such Payment Date and (ii) the Class Principal Amount of the Class
M1 Notes immediately prior to such Payment Date over (y) the M1 Target Amount.

          M1
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 61.30% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

          M2
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M3 Principal Deficiency Amount, (ii) the M4 Principal
Deficiency Amount, (iii) the M5 Principal Deficiency Amount, (iv) the M6
Principal Deficiency Amount, (v) the M7 Principal Deficiency Amount, (vi) the
M8 Principal Deficiency Amount, (vii) the M9 Principal Deficiency Amount and
(viii) the M10 Principal Deficiency Amount, in each case for that Payment Date
and (b) the Class Principal Amount of the Class M2 Notes immediately prior to
such Payment Date.

          M2
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1 Notes, in each case after
giving effect to payments on such Payment Date and (ii) the Class Principal
Amount of the Class M2 Notes immediately prior to such Payment Date over (y)
the M2 Target Amount.

18

          M2
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 67.80% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

          M3
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M4 Principal Deficiency Amount, (ii) the M5 Principal
Deficiency Amount, (iii) the M6 Principal Deficiency Amount, (iv) the M7
Principal Deficiency Amount, (v) the M8 Principal Deficiency Amount, (vi) the
M9 Principal Deficiency Amount and (vii) the M10 Principal Deficiency Amount,
in each case for that Payment Date and (b) the Class Principal Amount of the
Class M3 Notes immediately prior to such Payment Date.

          M3
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1 and Class M2 Notes, in
each case after giving effect to payments on such Payment Date and (ii) the
Class Principal Amount of the Class M3 Notes immediately prior to such Payment
Date over (y) the M3 Target Amount.

          M3
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 71.90% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such Payment
Date determined as of the last day of the related Due Period over (ii) 0.50% of
the Aggregate Collateral Balance as of the Closing Date.

          M4
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M5 Principal Deficiency Amount, (ii) the M6 Principal
Deficiency Amount, (iii) the M7 Principal Deficiency Amount, (iv) the M8
Principal Deficiency Amount, (v) the M9 Principal Deficiency Amount and (vi)
the M10 Principal Deficiency Amount, in each case for that Payment Date, and
(b) the Class Principal Amount of the Class M4 Notes immediately prior to such
Payment Date.

          M4
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2 and Class M3
Notes, in each case after giving effect to payments on such Payment Date and
(ii) the Class Principal Amount of the Class M4 Notes immediately prior to such
Payment Date over (y) the M4 Target Amount.

          M4
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 75.50% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

19

          M5
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M6 Principal Deficiency Amount (ii) the M7 Principal
Deficiency Amount, (iii) the M8 Principal Deficiency Amount, (iv) the M9
Principal Deficiency Amount and (v) the M10 Principal Deficiency Amount, in
each case for that Payment Date and (b) the Class Principal Amount of the Class
M5 Notes immediately prior to such Payment Date.

          M5
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3 and
Class M4 Notes, in each case after giving effect to payments on such Payment
Date and (ii) the Class Principal Amount of the Class M5 Notes immediately
prior to such Payment Date over (y) the M5 Target Amount.

          M5
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 78.80% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

          M6
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M7 Principal Deficiency Amount, (ii) the M8 Principal
Deficiency Amount, (iii) the M9 Principal Deficiency Amount and (iv) the M10
Principal Deficiency Amount, in each case for that Payment Date and (b) the
Class Principal Amount of the Class M6 Notes immediately prior to such Payment
Date.

          M6
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3,
Class M4 and Class M5 Notes, in each case after giving effect to payments on
such Payment Date and (ii) the Class Principal Amount of the Class M6 Notes
immediately prior to such Payment Date over (y) the M6 Target Amount.

          M6
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 81.80% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

          M7
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M8 Principal Deficiency Amount, (ii) the M9 Principal
Deficiency Amount and (iii) the M10 Principal Deficiency Amount, in each case
for that Payment Date, and (b) the Class Principal Amount of the Class M7 Notes
immediately prior to such Payment Date.

20

          M7
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3,
Class M4, Class M5 and Class M6 Notes, in each case after giving effect to
payments on such Payment Date and (ii) the Class Principal Amount of the Class
M7 Notes immediately prior to such Payment Date over (y) the M7 Target Amount.

          M7
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 84.90% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

          M8
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the sum of (i) the M9 Principal Deficiency Amount and (ii) the M10
Principal Deficiency Amount, in each case for that Payment Date and (b) the
Class Principal Amount of the Class M8 Notes immediately prior to such Payment
Date.

          M8
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3,
Class M4, Class M5, Class M6 and Class M7 Notes, in each case after giving
effect to payments on such Payment Date and (ii) the Class Principal Amount of
the Class M8 Notes immediately prior to such Payment Date over (y) the M8
Target Amount.

          M8
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 87.70% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

          M9
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the excess, if any, of (1) the Total Principal Deficiency Amount over
(2) the M10 Principal Deficiency Amount, in each case for that Payment Date and
(b) the Class Principal Amount of the Class M9 Notes immediately prior to such
Payment Date.

          M9
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3,
Class M4, Class M5, Class M6, Class M7 and Class M8 Notes, in each case after
giving effect to payments on such Payment Date and (ii) the Class Principal
Amount of the Class M9 Notes immediately prior to such Payment Date over (y)
the M9 Target Amount.

          M9
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 89.80% and (ii) the Aggregate Collateral
Balance for such Payment Date 

21

determined as
of the last day of the related Due Period and (b) the excess of (i) the
Aggregate Collateral Balance for such Payment Date determined as of the last
day of the related Due Period over (ii) 0.50% of the Aggregate Collateral
Balance as of the Closing Date.

          M10
Principal Deficiency Amount: With respect to any Payment Date, the lesser
of (a) the Total Principal Deficiency Amount for that Payment Date and (b) the
Class Principal Amount of the Class M10 Notes immediately prior to such Payment
Date.

          M10
Principal Payment Amount: With respect to any Payment Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect with respect to
such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3,
Class M4, Class M5, Class M6, Class M7, Class M8 and Class M9 Notes, in each
case after giving effect to payments on such Payment Date and (ii) the Class
Principal Amount of the Class M10 Notes immediately prior to such Payment Date
over (y) the M10 Target Amount.

          M10
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 92.00% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.

          Majority
Noteholders: Until such time as the sum of the Class Principal Amounts of
all Classes of Notes has been reduced to zero, the holder or holders of in
excess of 50% of the aggregate Class Principal Amount of all Classes of Notes
(accordingly, the holder of the Ownership Certificate shall be excluded from any
rights or actions of the Majority Noteholders during such period); and
thereafter, the holder of the Ownership Certificate.

          Material
Defect: With respect to any Mortgage Loan, as defined in Section 2.02(c)
hereof.

          Maturity
Date: With respect to any Class of Notes, the Payment Date in April 2037. 

          MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any
successor in interest thereto.

          MERS
Mortgage Loan: Any Mortgage Loan as to which the related Mortgage, or an
Assignment of Mortgage, has been or will be recorded in the name of MERS, as
nominee for the holder from time to time of the Mortgage Note.

          Monthly
Excess Cashflow: For any Payment Date, the sum of (i) Monthly Excess
Interest, (ii) any remaining Principal Payment Amount for Group 1 and Group 2
pursuant to Sections 6.02(e)(i)(1)(Q), 6.02(e)(i)(2)(Q) or 6.02(e)(ii)(14), as
applicable, (iii) the Aggregate Overcollateralization Release Amount for such
Payment Date, and (iv) any Net Swap Receipts paid by the Swap Counterparty in
respect of the Swap Agreement.

22

          Monthly
Excess Interest: For any Payment Date, an amount equal to any Interest
Funds for Group 1 and Group 2 remaining after application pursuant to
subclauses (i) through (xi) of Section 6.02(d).

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

          Mortgage:
A mortgage, deed of trust or other instrument encumbering a fee simple interest
in real property securing a Mortgage Note, together with improvements thereto.

          Mortgage
File: The mortgage documents listed in Section 2.01(b) pertaining to a
particular Mortgage Loan required to be delivered to the Indenture Trustee
pursuant to this Agreement.

          Mortgage
Group: Any of Group 1 or Group 2.

          Mortgage
Impairment Insurance Policy: A mortgage impairment or blanket hazard
insurance policy to be maintained by the Servicer in accordance with Section
5.02(l).

          Mortgage
Index: The Six-Month LIBOR Index and the Treasury Mortgage Index, as
specified for any Mortgage Loan in the Mortgage Loan Schedule.

          Mortgage
Loan: A mortgage loan that is conveyed to the Issuing Entity pursuant to
this Agreement on the Closing Date, which mortgage loan includes, without
limitation, the mortgage loan documents, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
any related REO Property, REO Disposition Proceeds, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
mortgage loan. The Mortgage Loans subject to this Agreement are identified on the Mortgage Loan Schedule
annexed hereto as Schedule A and have an aggregate Stated Principal Balance as
of the Cut-off Date of $373,173,174. 

          Mortgage
Loan Purchase Agreement: The mortgage loan purchase agreement dated as of
April 1, 2007, for the sale of the Mortgage Loans by the Seller to the
Depositor.

          Mortgage
Loan Remittance Rate: With respect to each Mortgage Loan, the Mortgage Rate
minus the Servicing Administration Fee Rate.

          Mortgage
Loan Schedule: The Mortgage Loan Schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended from
time to time to reflect the addition of Mortgage Loans to, or the deletion of
Mortgage Loans from, the Trust Estate. Such schedule shall set forth, among
other things, the following information with respect to each Mortgage Loan: (i)
the Mortgage Loan identifying number; (ii) the original principal balance of
the Mortgage Loan; (iii) the Mortgage Rate at origination; (iv) the Mortgage
Index; (v) the first Mortgage Rate adjustment date; (vi) the monthly payment of
principal and interest at origination; (vii) the Servicing Administration Fee
Rate; (viii) the Trust Administration Fee Rate and (ix) whether such Mortgage
Loan is subject to a Prepayment Premium for voluntary prepayments by the
Mortgagor, the term during which such Prepayment Premiums are imposed and the
method of calculation of the Prepayment Premium. The Servicer shall be
responsible 

23

for providing
the Indenture Trustee and the Trust Administrator with all amendments to the
Mortgage Loan Schedule.

          Mortgage
Note: The note or other evidence of the indebtedness of a Mortgagor secured
by a Mortgage under a Mortgage Loan.

          Mortgage
Pool: The aggregate of all the Mortgage Loans.

          Mortgage
Rate: As to any Mortgage Loan, the per annum rate at which interest accrues
on such Mortgage Loan, as determined under the related Mortgage Note as reduced
by the applications of the Civil Relief Act.

          Mortgaged
Property: The fee simple interest in real property, together with
improvements thereto including any exterior improvements to be completed within
120 days of disbursement of the related Mortgage Loan proceeds.

          Mortgagor:
The obligor on a Mortgage Note.

          Net
Liquidation Proceeds: With respect to any Liquidated Mortgage Loan, the
related Liquidation Proceeds received and retained in connection with the
liquidation of such Mortgage Loan net of (i) Liquidation Expenses and (ii) any
related unreimbursed Advances and Servicing Advances, if any.

          Net
Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate thereof
reduced by the Aggregate Expense Rate for such Mortgage Loan.

          Net
Swap Payment: With respect to any Payment Date, the amount paid by the
Trust under the Swap Agreement to the Swap Counterparty in excess of the
amounts received by the Trust from the Swap Counterparty, as calculated by the
Swap Counterparty and reported to the Trust Administrator.

          Net
Swap Receipt: With respect to the second Business Day prior to any
Calculation Period End Date, the amount received by the Trust under the Swap
Agreement from the Swap Counterparty in excess of the amount paid by the Trust
to the Swap Counterparty, as calculated by the Swap Counterparty and reported
to the Trust Administrator.

          New
York UCC: The Uniform Commercial Code as in effect in the State of New
York.

          Non-MERS
Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage Loan.

          Nonrecoverable
Advance: Any Servicing Advance or Monthly Advance previously made or
proposed to be made in respect of a Mortgage Loan by the Servicer which, in the
reasonable discretion of the Servicer will not or, in the case of a proposed
Servicing Advance or Monthly Advance, would not, ultimately be recoverable by
the Servicer from the related Mortgagor, related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds or
otherwise. The determination by the Servicer that all or a portion of a
Servicing Advance or Monthly Advance would be a Nonrecoverable Advance shall be
evidenced 

24

by an
Officer’s Certificate delivered to the Indenture Trustee setting forth such
determination and a reasonable explanation thereof.

          Note:
As defined in the Indenture.

          Note
Principal Amount: With respect to any Note, the initial principal amount
thereof on the Closing Date, less the amount of all principal payments
previously paid with respect to such Note.

          Note
Register and Note Registrar: As defined in the Indenture.

          Offering
Document: The Prospectus.

          Officer’s
Certificate: A certificate signed by the Chairman of the Board, any Vice
Chairman, the President, any Senior Vice President, any Vice President or any
Assistant Vice President of a Person.

          Operative
Agreements: The Trust Agreement, the Certificate of Trust of the Issuing
Entity, this Agreement, the Mortgage Loan Purchase Agreement, the Indenture,
the Custodial Agreement and each other document contemplated by any of the
foregoing to which the Depositor, the Seller, the Servicer, the Owner Trustee,
the Trust Administrator, the Indenture Trustee or the Issuing Entity is a
party.

          Opinion
of Counsel: A written opinion of counsel, reasonably acceptable in form and
substance to the
Seller, the Trust Administrator,
the Swap Counterparty, the Servicer and/or the Indenture Trustee, as
applicable (each such opinion letter to include such Swap Counterparty as an
addressee thereof), and who may
be in-house or outside counsel to the Seller, the Servicer, the Depositor, the
Trust Administrator or the Indenture Trustee but which must be Independent
outside counsel with respect to any such opinion of counsel concerning federal
income tax or ERISA matters.

          Original
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of the
principal balance of such Mortgage Loan at origination, or such other date as
is specified, to the Original Value of the related Mortgaged Property.

          Original
Value: The lesser of (a) the Appraised Value of a Mortgaged Property at the
time the related Mortgage Loan was originated and (b) if the Mortgage Loan was
made to finance the acquisition of the related Mortgaged Property, the purchase
price paid for the Mortgaged Property by the Mortgagor at the time the related
Mortgage Loan was originated.

          OTS:
The Office of Thrift Supervision.

          Overcollateralization
Amount: With respect to any Payment Date will be equal to the amount, if
any, by which (x) the Aggregate Collateral Balance for such Payment Date
exceeds (y) the aggregate Class Principal Amount of the Notes, in each case
after giving effect to payments on such Payment Date.

25

          Overcollateralization
Deficiency Amount: With respect to any Payment Date, the excess, if any, of
the Targeted Overcollateralization Amount for that Payment Date over the
Overcollateralization Amount for that Payment Date.

          Ownership
Certificate: An equity certificate representing a 100% undivided beneficial
ownership interest in the Trust, substantially in the form attached as part of
Exhibit A to the Trust Agreement.

          Ownership
Certificate Holder: The holder of the Ownership Certificate.

          Owner
Trustee: U.S. Bank Trust National Association, a national banking
association, and any successor in interest, not in its individual capacity, but
solely as owner trustee under the Trust Agreement.

          Owner
Trustee Fee: The annual fee of $3,500, payable to the Owner Trustee
pursuant to the Fee Letter Agreement specified in Section 7.03 of the Trust
Agreement on a monthly basis on each Payment Date during the term of this
Agreement; provided that the Owner Trustee Fee for the first year shall be
payable on the Closing Date by the Seller.

          Payahead:
With respect to any Mortgage Loan and any Due Date therefor, any Scheduled
Payment received by the Servicer during any Due Period in addition to the
Scheduled Payment due on such Due Date, intended by the related Mortgagor to be
applied on a subsequent Due Date or Due Dates.

          Paying
Agent: As defined in the Indenture. The initial Paying Agent shall be the
Trust Administrator.

          Payment
Date: The 25th day of each month or, if such 25th day is not a
Business Day, the next succeeding Business Day, commencing in May 2007. The
initial Payment Date is May 25, 2007.

          PCAOB:
The Public Company Accounting Oversight Board.

          Percentage
Interest: With respect to any Note and the Ownership Certificate, the
Percentage Interest evidenced thereby shall equal (i) with respect to the
Ownership Certificate, the Percentage Interest on the face of such certificate
or (ii) with respect to any Note, the initial Note Principal Amount thereof,
divided by the initial Class Principal Amount of all Notes of the same Class. 

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

          Plan:
An employee benefit plan or other retirement arrangement which is subject to
Section 406 of ERISA and/or Section 4975 of the Code or any entity whose
underlying assets include such plan’s or arrangement’s assets by reason of
their investment in the entity.

26

          Plan
Asset Regulations: The Department of Labor regulations set forth in 29
C.F.R. 2510.3-101.

          Prepayment
Interest Excess Amount: For any Servicer Remittance Date and any Principal
Prepayment in full received during the portion of the related Prepayment Period
occurring from and including the first day through the fifteenth day of the
calendar month in which such Servicer Remittance Date occurs, an amount equal
to interest (to the extent received) due in connection with such Principal
Prepayment.

          Prepayment
Interest Shortfall Amount: With respect to any Payment Date and any
Principal Prepayment in full from the sixteenth day of the preceding calendar
month through the end of such calendar month, the amount, if any, by which one
month’s interest at the Net Mortgage Rate for such Mortgage Loan on the amount
of such Principal Prepayment exceeds the amount of interest received from such
Mortgagor in respect of such Principal Prepayment.

          Prepayment
Period: With respect to any Payment Date and any Principal Prepayment other
than Principal Prepayment in part by a Mortgagor, the period beginning from and
including the sixteenth day of the month preceding the month in which such
Payment Date occurs to and including the fifteenth day of the month in which
such Payment Date occurs. With respect to any Payment Date and any Principal
Prepayment in part by a Mortgagor, the calendar month immediately preceding the
month in which such Payment Date occurs.

          Prepayment
Premiums: Any prepayment fees and penalties to be paid by the Mortgagor on
a Mortgage Loan in the case of a full or partial voluntary prepayment of such
Mortgage Loan during the related Prepayment Period.

          Prime
Rate: The prime rate of the United States money center commercial banks as
published in The Wall Street Journal, Northeast Edition.

          Principal
Deficiency Amount: Any of the M1 Principal Deficiency Amount, the M2
Principal Deficiency Amount, the M3 Principal Deficiency Amount, the M4
Principal Deficiency Amount, the M5 Principal Deficiency Amount, the M6
Principal Deficiency Amount, the M7 Principal Deficiency Amount, the M8
Principal Deficiency Amount, the M9 Principal Deficiency Amount and the M10
Principal Deficiency Amount.

          Principal
Funds: With respect to any Payment Date and for each Mortgage Group, (a)
the sum of (i) all principal collected (other than the principal portion of
Payaheads) or advanced in respect of Scheduled Payments on the Mortgage Loans
in such Mortgage Group during the related Due Period whether by the Servicer or
the Indenture Trustee (less unreimbursed Advances and Nonrecoverable Advances
due to the Servicer or the Indenture Trustee, solely in its capacity as
successor Servicer with respect to such Mortgage Group) and any unreimbursed
Servicing Advances, in each case, to the extent allocable to principal and to
the extent provided under Sections 4.02(e)(3) and (4) and Sections 5.08(i) and
(ii)), (ii) all Principal Prepayments in full or in part received during the
related Prepayment Period on the Mortgage Loans, (iii) the Stated Principal
Balance of each Mortgage Loan that was purchased from the Trust Estate, during
the related Prepayment Period, (iv) the portion of any Substitution Amount paid
with respect to any Deleted Mortgage Loan relating to a Mortgage Loan during
the related 

27

Prepayment
Period allocable to principal, (v) all Net Liquidation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and other Recoveries collected with respect
to such Mortgage Loans during the related Prepayment Period, to the extent
allocable to principal, as reduced by
(b) the Group 1 Percentage or Group 2 Percentage, as applicable, of other
costs, expenses or liabilities reimbursable to the Indenture Trustee, the Owner
Trustee, the Custodian, the Trust Administrator and the Servicer to the extent
provided in this Agreement, the Trust Agreement, the Indenture and the
Custodial Agreement and to the extent not reimbursed from Interest Funds, or
otherwise.

          Principal
Payment Amount: With respect to each Mortgage Group and for any Payment
Date, an amount equal to the Principal Funds for such Mortgage Group for such
date minus the Aggregate Overcollateralization Release Amount attributable to
such Mortgage Group, if any, and such Payment Date.

          Principal
Prepayment: Any payment or other recovery of principal on a Mortgage Loan
including any payment or other recovery of principal in connection with the
repurchase of a Mortgage Loan by the Seller, the Servicer or any other Person
received in advance of such Mortgage Loan’s scheduled Due Date.

          Proceeding:
Any suit in equity, action at law or other judicial or administrative
proceeding.

          Property
Changes: As defined in Section 4.02(i).

          Prospectus:
Collectively, the free writing prospectus dated April 5, 2007, the prospectus
supplement dated April 11, 2007, and the prospectus dated June 8, 2006, each
relating to the Class 1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class
M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8, Class M9 and
Class M10 Notes.

          Purchase
Price: With respect to the purchase of a Mortgage Loan or related REO
Property pursuant to this Agreement, an amount equal to the sum of (a) 100% of
the unpaid principal balance of such Mortgage Loan, (b) accrued interest
thereon at the applicable Mortgage Rate, from the date as to which interest was
last paid to (but not including) the Due Date in the Due Period during which
such Mortgage Loan or REO Property is being so purchased; (c) the fair market value
of the REO Property and all other property being purchased; (d) any
unreimbursed Servicing Advances with respect to such Mortgage Loan; and (e) any
costs and damages incurred by the Trust Estate associated with any violation of
applicable federal, state or local anti-predatory or anti-abusive lending laws
with respect to the related Mortgage Loan. The Servicer shall be reimbursed
from the Purchase Price for any Mortgage Loan or related REO Property for any
Advances made or other amounts advanced with respect to such Mortgage Loan that
are reimbursable to the Servicer under this Agreement, together with any
accrued and unpaid Servicing Administration Fee with respect to such Mortgage
Loan.

          Qualified
GIC: A guaranteed investment contract or surety bond providing for the
investment of funds in the Collection Account and insuring a minimum, fixed or
floating rate of return on investments of such funds, which contract or surety
bond shall:

	
   

  	
   

  
	
   

  	
            (i) be an
  obligation of an insurance company or other corporation whose long-term debt
  is rated by each Rating Agency in one of its two highest rating categories 

  

28

	
   

  	
   

  
	
   

  	
  or, if such
  insurance company has no long term debt, whose claims paying ability is rated
  by each Rating Agency in one of its two highest rating categories, and whose
  short-term debt is rated by each Rating Agency in its highest rating
  category;

  
	
   

  	
   

  
	
   

  	
            (ii) provide
  that the Indenture Trustee may exercise all of the rights under such contract
  or surety bond without the necessity of taking any action by any other
  Person;

  
	
   

  	
   

  
	
   

  	
            (iii)
  provide that if at any time the then current credit standing of the obligor
  under such guaranteed investment contract is such that continued investment
  pursuant to such contract of funds would result in a downgrading of any
  rating of the Notes, the Indenture Trustee shall terminate such contract
  without penalty and be entitled to the return of all funds previously
  invested thereunder, together with accrued interest thereon at the interest
  rate provided under such contract to the date of delivery of such funds to
  the Trust Administrator;

  
	
   

  	
   

  
	
   

  	
            (iv) provide
  that the Indenture Trustee’s interest therein shall be transferable to any
  successor trustee hereunder; and

  
	
   

  	
   

  
	
   

  	
            (v) provide
  that the funds reinvested thereunder and accrued interest thereon be
  returnable to the Collection Account not later than the Business Day prior to
  any Payment Date.

  

          Qualified
Insurer: An insurance company duly qualified as such under the laws of the
states in which the related Mortgaged Properties are located, duly authorized
and licensed in such states to transact the applicable insurance business and
to write the insurance provided and whose claims paying ability is rated by
each Rating Agency in its highest rating category or whose selection as an
insurer will not adversely affect the rating of the Notes.

          Qualified
REIT Subsidiary: A direct or indirect 100% owned subsidiary of a REIT that
satisfies the requirements of Section 856(i) of the Code.

          Qualifying
Substitute Mortgage Loan: In the case of a Mortgage Loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement, a Mortgage Loan
that, on the date of such substitution, (i) has an outstanding Stated Principal
Balance (or in the case of a substitution of more than one mortgage loan for a
Deleted Mortgage Loan, an aggregate Stated Principal Balance), after
application of all Scheduled Payments due during or prior to the month of
substitution, not in excess of, and not more than 5% less than, the outstanding
Stated Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) has a Mortgage Rate
not less than, and not more than 0.50% higher than, the Mortgage Rate on the
Deleted Mortgage Loan, (iii) if applicable, has a maximum Mortgage Rate not
less than the maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) has a
minimum Mortgage Rate not less than the minimum Mortgage Rate of the Deleted
Mortgage Loan, (v) has a gross margin equal to or greater than the gross margin
of the Deleted Mortgage Loan, (vi) has a next adjustment date not later than
the next adjustment date on the Deleted Mortgage Loan, (vii) has the same Due
Date as the Deleted Mortgage Loan, (viii) has a remaining stated term to
maturity not longer than 18 months and not more than 18 months 

29

shorter than
the remaining stated term to maturity of the related Deleted Mortgage Loan,
(ix) is current as of the date of substitution, (x) has 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, (xi) has been underwritten by the
Seller in accordance with the same underwriting criteria and guidelines as the
Deleted Mortgage Loan, (xii) has a risk grading determined by the Seller at
least equal to the risk grading assigned on the Deleted Mortgage Loan, (xiii)
is secured by the same property type as the Deleted Mortgage Loan, (xiv)
conforms to each representation and warranty applicable to the Deleted Mortgage
Loan made in the Mortgage Loan Purchase Agreement, (xv) has the same lien
position as the Deleted Mortgage Loan, (xvi) is covered by a primary mortgage
insurance policy if the Deleted Mortgage Loan was so covered, (xvii) contains
provisions covering the payment of Prepayment Premium by the Mortgager for
early prepayment of the Mortgage Loan at least as favorable to the Trust as the
Deleted Mortgage Loan, (xviii) has a maturity date not later than the maturity
date of the latest maturing Mortgage Loan in the Mortgage Pool as of the
Closing Date, (xix) has the same Mortgage Index as the Deleted Mortgage Loan,
(xx) if originated on or after November 27, 2003, is not a “high cost” loan
subject to the New Jersey Home Ownership Security Act of 2003 and (xxi) if
originated on or after January 1, 2004 is not a “high-cost” loan subject to the
New Mexico Home Loan Protection Act. 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 Stated
Principal Balances, the Mortgage Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Rates, the risk gradings
described in clause (xii) hereof shall be satisfied as to each such mortgage
loan, the terms described in clause (viii) hereof shall be determined on the
basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
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 (xiv) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.

          Rating
Agency: Each of Moody’s and S&P.

          Realized
Loss: With respect to each Liquidated Mortgage Loan, an amount equal to (i)
the unpaid principal balance of such Mortgage Loan as of the date of
liquidation, minus (ii) Liquidation Proceeds received, to the extent allocable
to principal, net of amounts that are reimbursable therefrom to the Servicer
with respect to such Mortgage Loan (other than Advances of principal) including
Liquidation Expenses. In determining whether a Realized Loss is a Realized Loss
of principal, Liquidation Proceeds shall be allocated, first, to payment of
Liquidation Expenses, then to accrued unpaid interest and finally to reduce the
principal balance of the Mortgage Loan.

          Record
Date: With respect to each Payment Date and each Class of Notes (other than
the Class M10 Notes), the Business Day prior to the related Payment Date, and
with respect to the Class M10 Notes, and any Class of Definitive Notes, the
last Business Day of the month immediately preceding the month in which the
Payment Date occurs (or, in the case of the first Payment Date, the Closing
Date).

30

          Recovery:
With respect to any Liquidated Mortgage Loan, an amount received in respect of
principal on such Mortgage Loan which has previously been allocated as a
Realized Loss to a Class or Classes of Notes net of reimbursable expenses.

          Redemption
Date: The first Payment Date on which the Servicer is permitted to exercise
its right to purchase the assets of the Trust pursuant to Section 9.02 hereof.

          Redemption
Price: The sum of (a) 100% of the aggregate outstanding principal balance
of the Mortgage Loans, plus accrued interest thereon at the applicable Mortgage
Rate, (b) the fair market value of all other property being purchased, (c) any
unreimbursed Servicing Advances, (d) the amount of any swap breakage costs
resulting from the termination of the Swap Agreement as a result of redemption
(as reported to the Trust Administrator by the Swap Counterparty), (e) any
Deferred Interest and Available Funds Shortfalls and (f) all other amounts to
be paid or reimbursed to the Trust Administrator, the Indenture Trustee, the
Owner Trustee and the Custodian.

          Reference
Banks: Leading banks selected by the Trust Administrator and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
(1) with an established place of business in London, (2) whose quotations
appear on the Reuters Screen LIBO Page on the Determination Date in question,
(3) which have been designated as such by the Trust Administrator and (4) not
controlling, controlled by, or under common control with, the Depositor, the
Indenture Trustee, the Trust Administrator, the Servicer, the Seller or any
successor servicer.

          Regulation
AB: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100 - 229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to
time. 

          Regulation
AB Provisions: Sections 4.04(d) and (e) and Sections 8.01 through 8.12
hereof.

          REIT:
A real estate investment trust within the meaning of section 856 of the Code.

          Related
Senior Principal Payment Amount: With respect to each Mortgage Group and
for any Payment Date, an amount equal to the lesser of (x) the aggregate Class
Principal Amounts of the Class 1-A Notes (with respect to Group 1) or of the
Class 2-A1, Class 2-A2 and Class 2-A3 Notes (with respect to Group 2)
immediately prior to that Payment Date and (y) the product of (a) the Senior
Principal Payment Amount and (b) the related Senior Proportionate Percentage in
each case for such date.

          Relevant
Servicing Criteria: The Servicing Criteria applicable to the various parties,
as set forth on Exhibit L, or in the case of the Servicer, Exhibit L-1,
attached hereto. For clarification purposes, multiple parties can have
responsibility for the same Relevant Servicing Criteria. With respect to a
Servicing Function Participant engaged by the Servicer or the Trust 

31

Administrator,
the term “Relevant Servicing Criteria” may refer to a portion of the Relevant
Servicing Criteria applicable to such parties.

          Relevant
UCC: The Uniform Commercial Code as in effect in the applicable
jurisdiction.

          REO
Disposition: The final sale by the Servicer of any REO Property.

          REO
Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.02(p).

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

          Reportable
Event: The meaning set forth in Section 8.03.

          Required
Loss Percentage: With respect to any Payment Date, the applicable
percentage for such Payment Date as set forth in the following table:

	
   

  	
   

  	
   

  
	
  Payment Date

  	
   

  	
  Required
  Loss Percentage

  
	
  

  	
   

  	
  

  
	
  May 2009 to April 2010

  	
   

  	
  1.40% with respect to May
  2009, plus an additional 1/12th of 1.70% for each month thereafter

  
	
 

	
  May 2010 to April 2011

  	
   

  	
  3.10% with respect to May
  2010, plus an additional 1/12th of 1.90% for each month thereafter

  
	
 

	
  May 2011 to April 2012

  	
   

  	
  5.00% with respect to May
  2011, plus an additional 1/12th of 1.50% for each month thereafter

  
	
 

	
  May 2012 to April 2013

  	
   

  	
  6.50% with respect to May
  2012, plus an additional 1/12th of 0.95% for each month thereafter

  
	
 

	
  May 2013 to April 2014

  	
   

  	
  7.45% with respect to May
  2013, plus an additional 1/12th of 0.20% for each month thereafter

  
	
 

	
  May 2014 and thereafter

  	
   

  	
  7.65%

  

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

32

          Responsible
Officer: Any Vice President, any Assistant Vice President, any Assistant
Secretary, any Assistant Treasurer, any Corporate Trust officer or any other
officer of the Indenture Trustee or the Trust Administrator, as applicable,
customarily performing functions similar to those performed by any of the
above-designated officers and, in each case, having direct responsibility for
the administration of the Operative Agreements and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer’s knowledge of and familiarity with the particular subject.

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

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

          Sarbanes
Certifying Party: Any person who provides a certification pursuant to the
Sarbanes-Oxley Act of 2002 on behalf of the Trust.

          Sarbanes-Oxley
Act: The Sarbanes-Oxley Act of 2002 and the rules and regulations of the
Commission promulgated thereunder (including any interpretations thereof by the
Commission’s staff).

          Sarbanes-Oxley
Certification: A written certification signed by an officer of the
Depositor that complies with (i) the Sarbanes-Oxley Act, and (ii) Exchange Act
Rules 13a-14(d) and 15d-14(d), as in effect from time to time; provided that
if, after the Closing Date (a) the Sarbanes-Oxley Act is amended, (b) the Rules
referred to in clause (ii) are modified or superceded by any subsequent
statement, rule or regulation of the Commission or any statement of a division
thereof, or (c) any future releases, rules and regulations are published by the
Commission from time to time pursuant to the Sarbanes-Oxley Act, 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
Depositor, materially more onerous that then form of the required certification
as of the Closing Date, the Sarbanes-Oxley Certification shall be as agreed to
by the Depositor and the Seller following a negotiation in good faith to
determine how to comply with any such new requirements.

          Scheduled
Payment: Each scheduled payment of principal and interest (or of interest
only, if applicable) to be paid by the Mortgagor on a Mortgage Loan, as reduced
(except where otherwise specified herein) by the amount of any related Debt
Service Reduction or pursuant to the Civil Relief Act (excluding all amounts of
principal and interest that were due on or before the Cut-off Date whenever received)
and, in the case of an REO Property, an amount equivalent to the Scheduled
Payment that would have been due on the related Mortgage Loan if such Mortgage
Loan had remained in existence.

          Second
Lien Mortgage Loan: Any of the Mortgage Loans which are secured by a second
mortgage lien that is junior to a first lien mortgage loan on the related
Mortgaged Property.

          Securities
Act: The Securities Act of 1933, as amended, and the rules and regulations
thereunder.

33

          Securities
Intermediary: The Person acting as Securities Intermediary under this
Agreement (which is Wells Fargo Bank, N.A.), its successor in interest, and any
successor Securities Intermediary appointed pursuant to Section 6.04.

          Security
Entitlement: The meaning specified in Section 8-102(a)(17) of the New York
UCC.

          Seller:
FIC.

          Senior
Enhancement Percentage: With respect to a Payment Date on or after the
Stepdown Date, the quotient of (a) the Aggregate Collateral Balance, less the
aggregate Class Principal Amount of the Senior Notes outstanding as of such
Payment Date, prior to giving effect to payments to be made on such Payment
Date, divided by (b) the Aggregate Collateral Balance.

          Senior
Note: Any Class 1-A, Class 2-A1, Class 2-A2 or Class 2-A3 Note.

          Senior
Principal Payment Amount: With respect to the Senior Notes and any Payment
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, with respect to such Payment Date, an amount equal to the lesser of (x)
the Principal Payment Amount and (y) the amount, if any, by which (A) the
aggregate Class Principal Amounts of the Senior Notes immediately prior to that
Payment Date exceeds (B) the Senior Target Amount.

          Senior
Priorities: The priority of payments to the Class A Notes described in
clauses (i)(1)(C), (i)(1)(D), (i)(2)(C) and (i)(2)(D) in Section 6.02(e)
herein.

          Senior
Proportionate Percentage: With respect to Group 1 and any Payment Date, the
fraction, expressed as a percentage, the numerator of which is the Principal
Funds for Group 1 for such Payment Date and the denominator of which is the
aggregate of the Principal Funds for Group 1 and Group 2 for such date. With
respect to Group 2 and any Payment Date, the fraction, expressed as a
percentage, the numerator of which is the Principal Funds for Group 2 for such
Payment Date and the denominator of which is the aggregate of the Principal
Funds for Group 1 and Group 2 for such date.

          Senior
Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) approximately 54.10% and (ii) the Aggregate
Collateral Balance for such Payment Date determined as of the last day of the
related Due Period and (b) the amount, if any, by which (i) the Aggregate
Collateral Balance for such Payment Date determined as of the last day of the
related Due Period exceeds (ii) approximately 0.50% of the Aggregate Collateral
Balance as of the Closing Date.

          Servicer:
Litton Loan Servicing LP, a Delaware limited partnership, or any successor
servicer appointed as herein provided, in its capacity as Servicer hereunder.

          Servicer
Event of Default: Any one of the conditions or circumstances enumerated in
Section 4.07 with respect to the Servicer.

34

          Servicer
Remittance Date: The day in each calendar month on which the Servicer is
required to remit payments to the Collection Account, which is the 18th
of each calendar month (or, if such day is not a Business Day, the preceding
Business Day), commencing in May 2007.

          Servicing
Administration Fee: As to any Payment Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the Servicing Administration
Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan as of the
first day of the related Due Period.

          Servicing
Administration Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.

          Servicing
Advances: All customary, reasonable and necessary “out of pocket” costs and
expenses other than Advances (including reasonable attorneys’ fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
inspection, restoration and protection of the Mortgaged Property, (b) any
enforcement or administrative or judicial proceedings, including foreclosures,
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage, (d) taxes, assessments,
water rates, sewer rents and other charges which are or may become a lien upon
the Mortgaged Property and fire and hazard insurance coverage; provided, however,
the Servicer will make advances of taxes only to prevent foreclosure of the
Mortgaged Property and (e) any losses sustained by the Servicer with respect to
the liquidation of the Mortgaged Property. The Servicing Advances shall 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 satisfaction or foreclosure in respect of any Mortgage
Loan to the extent not recovered from the Mortgagor or otherwise payable under
this Agreement. Notwithstanding anything to the contrary herein, in the event
the Servicer determines in its reasonable judgment that a Servicing Advance is
a Nonrecoverable Advance, the Servicer shall be under no obligation to make
such Servicing Advance.

          Servicing
Criteria: The criteria set forth in paragraph (d) of Item 1122 of
Regulation AB, as such may be amended from time to time.

          Servicing
File: The items pertaining to a particular Mortgage Loan including, but not
limited to, the computer files, data disks, books, records, data tapes, notes,
and all additional documents generated as a result of or utilized in
originating and/or servicing each Mortgage Loan, which are held in trust for
the Indenture Trustee by the Servicer.

          Servicing
Function Participant: Any Sub-Servicer or Subcontractor of the Servicer,
the Indenture Trustee, or the Trust Administrator, respectively, determined to
be “participating in the servicing function” within the meaning of Regulation
AB. 

          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 Trust Administrator upon
request, as such list may from time to time be amended.

35

          Servicing
Rights Pledgee: One or more lenders, selected by Litton, to which Litton
may pledge and assign all of its right, title and interest in, to and under
this Agreement (other than rights granted to the Advance Financing Person (as
defined in Section 4.10) hereunder with respect to the collection of Advances
and Servicing Advances pursuant hereto, it being agreed that any interest of
the Servicing Rights Pledgee in such rights shall be automatically released
without any further action by the Servicing Rights Pledgee upon the grant of
such rights to the Advance Financing Person) including JPMorgan Chase Bank,
National Association as the representative of certain lenders.

          Servicing
Standard: The servicing procedures that (i) conform to customary and usual
standards of practice of prudent mortgage loan servicers, taking into account
that the Mortgage Loans are sub-prime or non-prime loans, (ii) follow the
policies and procedures that the Servicer applies to similar mortgage loans
serviced for third parties and for its own account, (iii) comply with all
applicable laws and follow collection practices with respect to the related
Mortgage Loans that are in all material respects legal and customary, and (iv)
subject to clause (iii), comply with the requirements of this Agreement.

          Significance
Percentage: With respect to any Payment Date, and in accordance with Item
1115 of Regulation AB, shall be a percentage equal to (a) an amount determined
based on the reasonable good faith estimate by the Depositor of the aggregate
maximum probable exposure of the outstanding Notes to the Swap Agreement,
divided by (b) the aggregate outstanding Note Principal Amount of the Notes,
prior to the payment of the related Principal Payment Amount on such Payment
Date.

          Stated
Principal Balance: With respect to any Payment Date, either (a) in the case
of any Mortgage Loan, the principal balance of such Mortgage Loan at the close
of business on the Cut-off Date after giving effect to principal payments due
on or before the Cut-off Date, whether or not received, less an amount equal to
principal payments due after the Cut-off Date and on or before the Due Date in
the related Due Period, whether or not received from the Mortgagor or advanced
by the Servicer and all amounts allocable to unscheduled principal payments
(including Principal Prepayments, Liquidation Proceeds, Insurance Proceeds and
condemnation proceeds, in each case to the extent identified and applied prior
to or during the related Prepayment Period), provided that the Stated Principal
Balance of any Liquidated Mortgage Loan shall be zero and (b) in the case of
any REO Property, the Stated Principal Balance of the related Mortgage Loan on
the Due Date immediately preceding the date of acquisition of such REO Property
by or on behalf of the Indenture Trustee (reduced by any amount applied as a
reduction of principal on the related Mortgage Loan).

          Stepdown
Date: The earlier of (a) the first Payment Date on which the aggregate
Class Principal Amount of the Class A Notes (after giving effect to payment of
the Principal Funds for such Payment Date) has been reduced to zero and (b) the
later to occur of (1) the Payment Date in May 2010 or (2) the first Payment
Date on which the aggregate Class Principal Amount of the Class A Notes (after
giving effect to payments of the Principal Funds for such Payment Date) is less
than or equal to 54.10% of the Aggregate Collateral Balance as of the end of
the immediately preceding Due Period.

36

          Stepup
Date: The first Payment Date after the Payment Date on which the Aggregate
Collateral Balance at the beginning of the Due Period related to that Payment
Date is less than 10% of the Aggregate Collateral Balance as of the Closing
Date.

          Subcontractor:
Any vendor, subcontractor or other Person that is not responsible for the
overall servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans under the direction or authority of the Servicer or the Trust
Administrator.

          Subordinate
Note: Any Class M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class
M7, Class M8, Class M9 or Class M10 Note.

          Sub-Servicer:
Any Person that (i) is considered to be a Servicing Function Participant, (ii)
services Mortgage Loans on behalf of any Servicer, and (iii) is responsible for
the performance (whether directly or through sub-servicers or Subcontractors) a
substantial portion of the servicing functions required to be performed under
this Agreement or any sub-servicing agreement that are identified in Item
1122(d) of Regulation AB.

          Sub-Servicing
Agreement: Any agreement entered into by the Servicer that conforms with
the requirements of Section 4.11 hereof.

          Substitution
Amount: The amount, if any, by which the Stated Principal Balance of a
Deleted Mortgage Loan exceeds the Stated Principal Balance of the related
Qualifying Substitute Mortgage Loan, or aggregate Stated Principal Balance, if
applicable, plus unpaid interest thereon, any related unpaid Advances or
Servicing Advances or unpaid Servicing Administration Fees or unpaid Trust Administration
Fees and the amount of any costs and damages incurred by the Trust Fund
associated with a violation of any applicable federal, state or local predatory
or abusive lending law in connection with the origination of such Deleted
Mortgage Loan.

          Swap
Agreement: That certain confirmation, dated April 12, 2007, by and between
the Swap Counterparty and the Trust Administrator, on behalf of the Issuing
Entity, including the exhibits and schedules thereto, substantially in the form
of Exhibit B hereto.

          Swap
Counterparty: JPMorgan Chase Bank, National Association.

          Targeted
Overcollateralization Amount: With respect to any Payment Date prior to the
Stepdown Date, an amount equal to 4.00% of the Aggregate Collateral Balance as
of the Closing Date, and with respect to any Payment Date on or after the
Stepdown Date, an amount equal to the lesser of (x) 4.00% of the Aggregate
Collateral Balance as of the Closing Date and (y) 8.00% of the Aggregate
Collateral Balance as of the end of the related Due Period, subject to a floor
equal to 0.50% of the Aggregate Collateral Balance as of the Closing Date; provided, however,
that on any Payment Date with respect to which a Trigger Event has occurred and
is continuing, the Targeted Overcollateralization Amount will be an amount
equal to the Targeted Overcollateralization Amount for the Payment Date
immediately preceding such Payment Date.

37

          Telerate
Page 3750: The display currently so designated as “Page 3750” on the
Moneyline Telerate Service (or such other page selected by the Trust
Administrator as may replace Page 3750 on that service for the purpose of
displaying daily comparable rates on prices).

          Title
Insurance Policy: A title insurance policy maintained with respect to a
Mortgage Loan.

          Total
Principal Deficiency Amount: With respect to any Payment Date, the excess,
if any, of the aggregate Class Principal Amount of the Notes immediately prior
to such Payment Date over the Aggregate Collateral Balance as of the last day
of the related Due Period.

          Total
Remittance Amount: With respect to any Payment Date, the sum of (i) the
Interest Funds for both Mortgage Groups for such Payment Date and (ii) the
Principal Funds for both Mortgage Groups for such Payment Date.

          Trigger
Event: A Trigger Event shall have occurred with respect to any Payment Date
on or after the Stepdown Date, if (a) the quotient of (1) the aggregate Stated
Principal Balance of all Mortgage Loans 60 or more days delinquent, measured on
a rolling three-month basis (including Mortgage Loans in foreclosure, REO
Properties and Mortgage Loans with respect to which the applicable mortgagor is
in bankruptcy, but excluding any Liquidated Mortgage Loans) and (2) the
Aggregate Collateral Balance as of the beginning of the related Due Period,
equals or exceeds the product of (i) 34.85% and (ii) the Senior Enhancement
Percentage, or (b) the quotient (expressed as a percentage) of (1) the
aggregate Realized Losses incurred from the Cut-off Date through the last day
of the calendar month preceding such Payment Date and (2) the Aggregate
Collateral Balance as of the Closing Date exceeds the Required Loss Percentage.

          Trust
or Trust Fund: The Issuing Entity.

          Trust
Account: The Collection Account.

          Trust
Account Property: The Trust Account, all amounts and investments held from
time to time in the Trust Account (whether in the form of deposit accounts,
physical property, book-entry securities, uncertificated securities, securities
entitlements, investment property or otherwise) and all proceeds of the
foregoing.

          Trust
Administration Fee: As to any Payment Date, an amount equal to the product
of (i) one-twelfth of the Trust Administration Fee Rate and (ii) the Aggregate
Collateral Balance as of the first day of the related Due Period.

          Trust
Administration Fee Rate: With respect to each Mortgage Loan, 0.0075% per
annum.

          Trust
Administrator Float Period: With respect to any Payment Date and the related
amounts in the Collection Account, the period commencing with the 23rd
day of each month and ending on the Payment Date.

          Trust
Agreement: The trust agreement dated as of March 23, 2007, between the
Depositor and the Owner Trustee, as amended and restated on April 12, 2007,
among the 

38

Depositor, the
Trust Administrator and the Owner Trustee, as such may be amended or
supplemented from time to time.

          Trust
Estate: The assets of the Issuing Entity and pledged by the Issuing Entity
to the Indenture Trustee under the Indenture, which assets consist of all
accounts, accounts receivable, contract rights, general intangibles, chattel
paper, instruments, documents, money, deposit accounts, certificates of
deposit, goods, notes, drafts, letters of credit, advices of credit, investment
property, uncertificated securities and rights to payment of any and every kind
consisting of, arising from or relating to any of the following: (a) the
Mortgage Loans listed in the Mortgage Loan Schedule, and principal and interest
due and payable after the Cut-off Date, but not including interest and
principal due and payable on any Mortgage Loans on or before the Cut-off Date,
together with the Mortgage Files relating to such Mortgage Loans; (b) any Insurance
Proceeds, REO Property, Liquidation Proceeds, REO Disposition Proceeds and
other recoveries (in each case, subject to clause (a) above), (c) the
Collection Account, any Custodial Account, any Escrow Account, and all amounts
deposited therein pursuant to the applicable provisions of this Agreement, (d)
any Insurance Policies, (e) the rights of the Depositor under the Mortgage Loan
Purchase Agreement, (f) all income, revenues, issues, products, revisions,
substitutions, replacements, profits, rents and all cash and non-cash proceeds
of the foregoing and (g) the rights of the Trust under the Swap Agreement.

          UCC:
The Uniform Commercial Code as enacted in the relevant jurisdiction.

          Underwriters:
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse
Securities (USA) LLC, J.P. Morgan Securities Inc., and Lehman Brothers Inc.

          Voting
Interests: The portion of the voting rights of all the Notes that is
allocated to any Note for purposes of the voting provisions of this Agreement.
At all times during the term of this Agreement, 98% of all voting rights will
be allocated among the holders of the Notes as provided below. The portion of
such voting rights allocated to such Notes will be based on the fraction,
expressed as a percentage, the numerator of which is the aggregate Class Principal Amount then
outstanding and the denominator of which is the aggregate outstanding principal
balance of the Notes. At all times during the term of the Indenture and this
Agreement, the holders of the Ownership Certificate will be allocated 2% of the
voting rights. The voting rights allocation to any Class of Notes or the
Ownership Certificate will be allocated among all holders of each such Class or
Certificate in proportion to the outstanding Class Principal Amount of such
Notes or Percentage Interest of the Ownership Certificate.

          Section
1.02. Calculations With Respect to the Mortgage Loans.
Calculations required to be made pursuant to this Agreement with respect to any
Mortgage Loan in the Trust Estate shall
be made based upon current information as to the terms of the Mortgage Loans
and reports of payments received from the Mortgagor on such Mortgage Loans
provided by the Servicer to the Trust Administrator. Payments to be made by the
Trust Administrator shall be based on information provided by the Servicer. The
Trust Administrator shall not be required to recompute, verify or recalculate
the information supplied to it by the Servicer.

          Section
1.03. Calculations With Respect to Accrued Interest. Accrued interest,
if any, on any LIBOR Note shall be calculated based upon a 360-day year and the
actual number of 

39

days in each
Accrual Period. Accrued interest, if any, on any Class M10 Notes shall be
calculated based upon a 360-day year consisting of twelve 30-day months.

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS

          Section
2.01. Creation and Declaration of Trust Estate; Conveyance of Mortgage Loans.

          (a)
Mortgage Loans. As of the Closing Date, in consideration of the Issuing
Entity’s delivery of the Notes to the Depositor or its designee, and
concurrently with the execution and delivery of this Agreement, the Depositor
does hereby transfer, assign, set over, deposit with and otherwise convey to
the Issuing Entity, without recourse, subject to Section 3.01, in trust, all
the right, title and interest of the Depositor in and to the Mortgage Loans.
Such conveyance includes, without limitation, the right to all payments of
principal and interest received on or with respect to the Mortgage Loans on and
after the Cut-off Date (other than payments of principal and interest due on or
before such date), and all such payments due after such date but received prior
to such date and intended by the related Mortgagors to be applied after such
date together with all of the Depositor’s right, title and interest in any REO
Property and the proceeds thereof, the Depositor’s rights under any Insurance
Policies related to the Mortgage Loans, the Depositor’s security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties and any proceeds of the foregoing, to have and to hold, in trust;
and the Indenture Trustee declares that, subject to the review provided for in
Section 2.02, it has received and shall hold the Trust Estate, as Indenture
Trustee, in trust, for the benefit and use of the Noteholders and the Swap
Counterparty and for the purposes and subject to the terms and conditions set
forth in this Agreement, and, concurrently with such receipt, the Issuing
Entity has issued and delivered the Notes to or upon the order of the
Depositor, in exchange for the Mortgage Loans and the other property of the
Trust Estate.

          Concurrently
with the execution and delivery of this Agreement, the Depositor does hereby
assign to the Issuing Entity all of its rights and interest under the Mortgage
Loan Purchase Agreement but without delegation of any of its obligations
thereunder. The Issuing Entity hereby accepts such assignment, and shall be entitled
to exercise all the rights of the Depositor under the Mortgage Loan Purchase
Agreement as if, for such purpose, it were the Depositor. Upon the issuance of
the Notes, ownership in the Trust Estate shall be vested in the Issuing Entity,
subject to the lien created by the Indenture in favor of the Indenture Trustee,
for the benefit of the Noteholders and the Swap Counterparty. The Issuing
Entity hereby accepts such assignment and shall be entitled to exercise all
rights of the Depositor under the Mortgage Loan Purchase Agreement as if, for
such purpose, it were the Depositor. The foregoing sale, transfer, assignment,
set-over, deposit and conveyance does not and is not intended to result in
creation or assumption by the Indenture Trustee of any obligation of the
Depositor, the Seller, or any other Person in connection with the Mortgage
Loans or any other agreement or instrument relating thereto except as
specifically set forth herein.

          It
is agreed and understood by the Depositor, the Issuing Entity and the Indenture
Trustee that it is not intended that any Mortgage Loan to be included in the
Trust Fund be (i) a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act effective November 27, 

40

2003, (ii) a
“High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, (iii) a “High-Cost Home Mortgage Loan” as defined in
the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004
and (iv) a “High Cost Home Loan” as defined in the Indiana Home Loan Practices
Act effective January 1, 2005.

          (b)
In connection with such transfer and assignment, the Depositor does hereby
deliver to, and deposit with, or cause to be delivered to and deposited with,
the Indenture Trustee, and/or the Custodian acting on the Indenture Trustee’s
behalf, the following documents or instruments with respect to each Mortgage
Loan (each a “Mortgage File”) so transferred and assigned:

                    (i)
the original Mortgage Note, endorsed either (A) in blank or (B) in the form of
the Form of Endorsement set forth in Exhibit A-4 hereto (or Exhibit B-6 to the
Custodial Agreement), or with respect to any lost Mortgage Note, an original
Lost Note Affidavit, in the form set forth in Exhibit C hereto (or Exhibit B-5
to the Custodial Agreement), stating that the original Mortgage Note was lost,
misplaced or destroyed, together with a copy of the related Mortgage Note;

                    (ii)
the original of any guarantee executed in connection with the Mortgage Note
assigned to the Indenture Trustee;

                    (iii)
the original Mortgage 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 or, if such Mortgage or power of
attorney has been submitted for recording but has not been returned from the
applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified by an Officer’s Certificate of the Seller to be a true and complete
copy of the original submitted for recording, together with a written Opinion
of Counsel acceptable to the Indenture Trustee and the Depositor that an original
recorded Mortgage is not required to enforce the Indenture Trustee’s interest
in the Mortgage Loan;

                    (iv)
with respect to each Non-MERS Mortgage Loan, an original Assignment of
Mortgage, in form and substance acceptable for recording. The Mortgage shall be
assigned either (A) in blank, without recourse, or (B) to “Wells Fargo Bank,
N.A., as Indenture Trustee of the Fieldstone Mortgage Investment Trust, Series
2007-1”, without recourse or (C) to the order of the Indenture Trustee;

                    (v)
an original copy of any intervening assignment of Mortgage showing a complete
chain of assignments or, in the case of an intervening assignment that has been
lost, a written Opinion of Counsel for the Seller acceptable to the Indenture
Trustee that such original intervening assignment is not required to enforce
the Indenture Trustee’s interest in the Mortgage Loans;

                    
(vi) the original or a certified copy of lender’s title insurance policy (or,
in lieu thereof, a commitment to issue such title insurance policy, with an
original or a certified copy of such title insurance policy to follow as soon
after the Closing Date as reasonably practicable);

41

                    (vii)
the original or copies of each assumption, modification, written assurance or
substitution agreement, if any, or as to any such agreement which cannot be
delivered prior to the Closing Date because of a delay caused by the public
recording office where such assumption, modification or substitution agreement
has been delivered for recordation, a photocopy of such assumption,
modification or substitution agreement, pending delivery of the original
thereof, together with an Officer’s Certificate of the Seller certifying that
the copy of such assumption, modification or substitution agreement delivered
to the Custodian is a true copy and that the original of such agreement has
been forwarded to the public recording office; and

                    (viii)
the original of any security agreement or equivalent instrument executed in
connection with the Mortgage or as to any security agreement or equivalent
instrument that cannot be delivered on or prior to the Closing Date because of
a delay caused by the public recording office where such document has been delivered
for recordation, a photocopy of such document, pending delivery of the original
thereof, together with an Officer’s Certificate of the Seller certifying that
the copy of such security agreement, chattel mortgage or their equivalent
delivered to the Custodian is a true copy and that the original of such
document has been forwarded to the public recording office.

          The
Depositor and the Seller acknowledge and agree that the form of endorsement
attached hereto as Exhibit A-4 is intended to effect the transfer to the
Indenture Trustee, for the benefit of the Noteholders and the Swap Counterparty, of the Mortgage
Notes and the Mortgages.

          (c)
MERS is the record owner of all of the Mortgage Loans. The Seller shall, or
shall cause the Servicer, at the expense of the Seller, to take such actions as
are necessary to cause the Indenture Trustee to be clearly identified as the
owner of each such Mortgage Loan on the records of MERS for purposes of the
system of recording transfers of beneficial ownership of mortgages maintained
by MERS. 

          (d)
In instances where a Title Insurance Policy is required to be delivered to the
Indenture Trustee or the Custodian on behalf of the Indenture Trustee under
clause (b)(vii) above and is not so delivered, the Seller will provide a copy
of such Title Insurance Policy to the Indenture Trustee, or to the Custodian on
behalf of the Indenture Trustee, as promptly as practicable after the execution
and delivery hereof, but in any case within 180 days of the Closing Date.

          (e)
For Mortgage Loans (if any) that 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, herewith delivers to the Indenture Trustee, or to the Custodian
on behalf of the Indenture Trustee, an Officer’s Certificate of the Seller
which shall include a statement to the effect that all amounts received in
connection with such prepayment that are required to be deposited in the
Collection Account pursuant to Section 5.07 have been so deposited. All
original documents that are not delivered to the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee shall be held by the Servicer in
trust for the benefit of the Indenture Trustee and the Noteholders and the Swap
Counterparty. Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Indenture Trustee with
respect to the custody, 

42

acceptance,
inspection and release of the Mortgage Files and preparation and delivery of
the certifications shall be performed by the Custodian pursuant to the terms
and conditions of the Custodial Agreement.

          (f)
The Depositor hereby directs the Trust Administrator to execute and deliver
each of the Swap Agreement and to make the representations required therein and
authorizes the Trust Administrator to perform its obligations thereunder on
behalf of the Issuing Entity in accordance with the terms of the agreement. The
Trust Administrator in its individual capacity shall have no responsibility for
any of the undertakings, agreements or representations with respect to the Swap
Agreement, including, without limitation, the making of any payments
thereunder, all of which shall be the obligations of the Issuing Entity. The
Trust Administrator shall not be required to take notice or be deemed to have
notice or knowledge of any Swap Disclosure Event (as defined in the Swap
Agreement) unless a Responsible Officer of the Trust Administrator obtains
actual knowledge of the occurrence of a Swap Disclosure Event or shall have
received written notice thereof from the Depositor. In the absence of such
actual knowledge or notice, the Trust Administrator may conclusively assume
that no Swap Disclosure Event has occurred.

          Section
2.02. Acceptance of Trust Estate; Review of Documentation. 

          (a)
Subject to the provisions of Section 2.01, the Issuing Entity acknowledges
receipt of the assets transferred by the Depositor of the assets included in
the Trust Estate and has directed that the documents referred to in Section
2.01 and all other assets included in the definition of “Trust Estate” be
delivered to the Indenture Trustee (or the Custodian) on its behalf.

          The
Indenture Trustee, by execution and delivery hereof, acknowledges receipt by it
or by the applicable Custodian on its behalf of the Mortgage Files pertaining
to the Mortgage Loans listed on the Mortgage Loan Schedule, subject to review
thereof by the Indenture Trustee, or by the Custodian on behalf of the
Indenture Trustee, under this Section 2.02. The Indenture Trustee, or the
Custodian on behalf of the Indenture Trustee, will execute and deliver to the
Depositor, the Trust Administrator, the Servicer (and the Indenture Trustee if
delivered by the Custodian) on the Closing Date an Initial Certification in the
form annexed hereto as Exhibit A-1 (or in the form annexed to the Custodial
Agreement as Exhibit A-1, as applicable).

          (b)
Within 45 days after the Closing Date, the Indenture Trustee or the Custodian
on behalf of the Indenture Trustee, will, for the benefit of Noteholders and
the Swap Counterparty, review each Mortgage File to ascertain that all required
documents set forth in Section 2.01 have been received and appear on their face
to contain the requisite signatures by or on behalf of the respective parties
thereto, and shall deliver to the Depositor, the Trust Administrator and the
Servicer (and the Indenture Trustee if delivered by the Custodian) an Interim
Certification in the form annexed hereto as Exhibit A-2 (or in the form annexed
to the Custodial Agreement as Exhibit A-2, as applicable) to the effect that,
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan prepaid in full or any specifically identified in such
certification as not covered by such certification), (i) all of the applicable
documents specified in Section 2.01(b) are in its possession and (ii) such
documents have been reviewed by it and appear to relate to such Mortgage Loan.
The Indenture Trustee, or the Custodian on behalf of the Indenture Trustee,
shall determine whether such documents are executed and endorsed, but shall be
under no duty or obligation to inspect, review or examine any such documents, 

43

instruments,
certificates or other papers to determine that the same are valid, binding,
legally effective, properly endorsed, genuine, enforceable or appropriate for
the represented purpose or that they have actually been recorded or are in
recordable form or that they are other than what they purport to be on their
face. Neither the Indenture Trustee nor the Custodian shall have any
responsibility for verifying the genuineness or the legal effectiveness of or
authority for any signatures of or on behalf of any party or endorser.

          (c)
If, in the course of the review described in paragraph (b) above or paragraph
(d) below, the Indenture Trustee or the Custodian discovers any document or
documents constituting a part of a Mortgage File that is missing, does not
appear regular on its face (i.e., is mutilated, damaged, defaced, torn or
otherwise physically altered) or appears to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule, as applicable (each, a “Material
Defect”), the Indenture Trustee, or the Custodian on behalf of the Indenture
Trustee, discovering such Material Defect shall identify the Mortgage Loan to
which such Material Defect relates in the Interim Certification delivered to
the Depositor and the Trust Administrator. Within 90 days of its receipt of
such notice, the Seller shall be required to cure such Material Defect (and, in
such event, the Seller shall provide the Indenture Trustee with an Officer’s
Certificate confirming that such cure has been effected). If the Seller does
not so cure such Material Defect, if a loss has been incurred with respect to
such Mortgage Loan that would, if such Mortgage Loan were not purchased from
the Trust Estate, constitute a Realized Loss, and such loss is attributable to
the failure of the Seller to cure such Material Defect, the Seller shall
repurchase the related Mortgage Loan from the Trust Estate at the Purchase
Price. A loss shall be deemed to be attributable to the failure of the Seller
to cure a Material Defect if, as determined by the Seller, upon mutual
agreement with the Indenture Trustee each acting in good faith, absent such
Material Defect, such loss would not have been incurred. The Seller may, in
lieu of repurchasing a Mortgage Loan pursuant to this Section 2.02, substitute
for such Mortgage Loan a Qualifying Substitute Mortgage Loan subject to the
provisions of Section 3.03. The failure of the Indenture Trustee or the
Custodian to deliver the Interim Certification within 45 days after the Closing
Date shall not affect or relieve the Seller of its obligation to repurchase any
Mortgage Loan pursuant to this Section 2.02 or any other Section of this
Agreement requiring the repurchase of Mortgage Loans from the Trust Estate.

          (d)
Within 180 days following the Closing Date, the Indenture Trustee, or the
Custodian, shall deliver to the Depositor, the Trust Administrator and the
Servicer (and the Indenture Trustee if delivered by the Custodian) a Final
Certification substantially in the form attached as Exhibit A-3 (or in the form
annexed to the Custodial Agreement as Exhibit A-3, as applicable) evidencing
the completeness of the Mortgage Files in its possession or control, with any
exceptions noted thereto.

          (e)
Nothing in this Agreement shall be construed to constitute an assumption by the
Trust Estate, the Indenture Trustee, the Custodian or the Noteholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.

          (f)
Notwithstanding anything to the contrary contained herein, each of the parties
hereto acknowledges that the Custodian shall perform the applicable review of
the Mortgage Loans and respective certifications thereof as provided in the
Custodial Agreement.

44

          (g)
Upon execution of this Agreement, the Depositor hereby delivers to the
Indenture Trustee and the Indenture Trustee acknowledges a receipt of the
Mortgage Loan Purchase Agreement.

          Section
2.03. Grant Clause. 

          (a)
It is intended that the conveyance by the Depositor to the Issuing Entity of
the Mortgage Loans, as provided for in Section 2.01 be construed as a sale by
the Depositor to the Issuing Entity of the Mortgage Loans and other assets in
the Trust Estate for the benefit of the Noteholders and the Swap Counterparty.
Further, it is not intended that any such conveyance be deemed to be a pledge
of the Mortgage Loans by the Depositor to the Issuing Entity to secure a debt
or other obligation of the Depositor. However, in the event that the Mortgage
Loans are held to be property of the Depositor or if for any reason this
Agreement is held or deemed to create a security interest in the Mortgage Loans
and other assets in the Trust Estate, then it is intended that (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the New York UCC (or the Relevant UCC if not the New York
UCC); (b) the conveyances provided for in Section 2.01 shall be deemed to be
(1) a grant by the Depositor to the Issuing Entity of a security interest in all
of the Depositor’s right (including the power to convey title thereto), title
and interest, whether now owned or hereafter acquired, in and to (A) the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any related
insurance policies and all other documents in the related Mortgage Files, (B)
all amounts payable pursuant to the Mortgage Loans in accordance with the terms
thereof and (C) any and all general intangibles consisting of, arising from or
relating to any of the foregoing, and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all Liquidation Proceeds, all Insurance
Proceeds, all amounts from time to time held or invested in the Collection
Account, whether in the form of cash, instruments, securities or other property
and (2) an assignment by the Depositor to the Issuing Entity of any security
interest in any and all of the Depositor’s right (including the power to convey
title thereto), title and interest, whether now owned or hereafter acquired, in
and to the property described in the foregoing clauses (1)(A) through (C); (c)
the possession by the Indenture Trustee or any other agent of the Issuing
Entity 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,” or possession by a purchaser or a person
designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York UCC and any other Relevant UCC (including,
without limitation, Section 9-313, 8-313 or 8-321 thereof); 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 Issuing Entity for the
purpose of perfecting such security interest under applicable law.

          (b)
The Depositor and, at the Depositor’s direction, the Issuing Entity shall, to
the extent consistent with this Agreement, take such reasonable actions as may
be necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans and the other property of the Trust Estate, 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. Without limiting the generality of the foregoing, the 

45

Depositor
shall prepare and file any UCC financing statements that are necessary to
perfect the Indenture Trustee’s security interest in or lien on the Mortgage
Loans, as evidenced by an Officer’s Certificate of the Depositor, and furnish a
copy of each such filed financing statement to the Trust Administrator. The
Trust Administrator shall prepare and file, at the expense of the Issuing
Entity, all filings necessary to maintain the effectiveness of any original
filings necessary under the Relevant UCC to perfect the Indenture Trustee’s
security interest in or lien on the Mortgage Loans, including without
limitation (x) continuation statements, and (y) to the extent that a Responsible
Officer of the Trust Administrator has received written notice of such change
or transfer, such other statements as may be occasioned by (1) any change of
name of the Seller, the Depositor or the Issuing Entity, (2) any change of
location of the place of business or the chief executive office of the Seller
or the Depositor or (3) any transfer of any interest of the Seller or the
Depositor in any Mortgage Loan.

          Neither
the Depositor nor the Issuing Entity shall organize under the law of any jurisdiction
other than the State under which each is organized as of the Closing Date
(whether changing its jurisdiction of organization or organizing under an
additional jurisdiction) without giving 30 days prior written notice of such
action to its immediate and mediate transferee, including the Indenture
Trustee. Before effecting such change, each of the Depositor or the Issuing
Entity proposing to change its jurisdiction of organization shall prepare and
file in the appropriate filing office any financing statements or other
statements necessary to continue the perfection of the interests of its
immediate and mediate transferees, including the Indenture Trustee, in the
Mortgage Loans. In connection with the transactions contemplated by this
Agreement and the Indenture, each of the Depositor and the Issuing Entity
authorizes its immediate or mediate transferee, including the Trust
Administrator, to prepare and file UCC continuation statements with respect to
the UCC financing statements filed in respect of the Closing Date (copies of
which shall be provided to the Trust Administrator) and, if the Trust
Administrator receives written notice from the Seller, the Depositor or the
Owner Trustee that an amendment to any such financing statement is required, an
amendment to any such financing statement.

          (c)
The Depositor shall not take any action inconsistent with the sale by the
Depositor of all of its right, title and interest in and to the Trust Estate
and shall indicate or shall cause to be indicated in its records and records
held on its behalf that ownership of each Mortgage Loan and the other property
of the Issuing Entity is held by the Issuing Entity. In addition, the Depositor
shall respond to any inquiries from third parties with respect to ownership of
a Mortgage Loan or any other property of the Trust Estate by stating that it is
not the owner of such Mortgage Loan and that ownership of such Mortgage Loan or
other property of the Trust Estate is held by the Issuing Entity on behalf of
the Noteholders and the Swap Counterparty.

          Section
2.04. [Reserved]. 

          Section
2.05. Option to Contribute Derivative Instrument. 

          At
any time on or after the Closing Date, the Seller shall have the right to
contribute to, and deposit into, the Trust a derivative contract or comparable
instrument (a “Derivative Instrument”). The Derivative Instrument may have a
notional amount in excess of the sum of the beneficial interests in the Trust.
Any such instrument shall constitute a fully prepaid agreement. 

46

The Trust
Administrator shall have no tax reporting duties with respect to any such
Derivative Instrument.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          Section
3.01. Representations and Warranties of the Depositor and the Seller. 

          (a)
The Depositor hereby represents and warrants to the Issuing Entity, the
Indenture Trustee for the benefit of Noteholders and the Swap Counterparty, the
Trust Administrator and the Servicer as of the Closing Date or such other date
as is specified, that:

                    (i)
This Agreement constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors’ rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);

                    (ii)
Immediately prior to the transfer by the Depositor to the Trust Estate of each
Mortgage Loan, the Depositor had good and equitable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no prior
lien, claim, participation interest, mortgage, security interest, pledge,
charge or other encumbrance or other interest of any nature;

                    (iii)
As of the Closing Date, the Depositor has transferred all right, title and
interest in the Mortgage Loans to the Trust Estate;

                    (iv)
The Depositor has not transferred the Mortgage Loans to the Trust Estate with
any intent to hinder, delay or defraud any of its creditors;

                    (v)
The Depositor has been duly organized and is validly existing as a corporation
in good standing under the laws of Maryland, with full power and authority to
own its assets and conduct its business as presently being conducted; and

          (b)
The Seller hereby represents and warrants to the Issuing Entity, the Indenture
Trustee for the benefit of Noteholders and the Swap Counterparty, the Trust
Administrator, the Servicer and the Depositor as of the Closing Date or such
other date as is specified, that:

                    (i)
the Seller is a Maryland corporation, duly organized validly existing and in
good standing under the laws of the State of Maryland, and has the corporate
power to own its assets and to transact the business in which it is currently
engaged. The Seller is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the character of the
business transacted by it or any properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
other) of the Seller;

47

                    (ii)
the Seller has the corporate power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated under the
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of the Seller enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies;

                    (iii)
the Seller is not required to obtain the consent of any other party or any
consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be, prior to the Closing Date;

                    (iv)
the execution, delivery and performance of
this Agreement by the Seller will not violate any provision of any existing law
or regulation or any order or decree of any court applicable to the Seller or
any provision of the articles of incorporation or bylaws of the Seller, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Seller is a party or by which the Seller may be bound;

                    (v)
no litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of the Seller
threatened, against the Seller or any of its properties or with respect to this
Agreement which in the opinion of the Seller has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by this
Agreement; and

                    (vi)
the Seller has been organized in conformity with the requirements for
qualification as a REIT and currently qualifies as a REIT; the Seller has filed
an election to be treated as a REIT for federal income tax purposes; and the
Seller has operated in a manner and will continue to operate in a manner that
will enable it to continue to maintain its current qualification as a REIT.

          (c)
The Seller hereby represents and warrants to the Issuing Entity, the Indenture
Trustee for the benefit of Noteholders and the Swap Counterparty, the Trust
Administrator, the Servicer and the Depositor as of the Closing Date or such other
date as is specified, with respect to the Mortgage Loans, the representations
and warranties set forth in Section 3.2 of the Mortgage Loan Purchase
Agreement.

          (d)
To the extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of a representation or warranty of the Seller under
subsection (c) above or the Mortgage Loan Purchase Agreement, the only right or
remedy of the Indenture Trustee or any Certificateholder hereunder shall be
their rights to enforce the obligations of the Seller under any applicable
representation or warranty made by it. The Indenture Trustee acknowledges that
the Depositor shall have no obligation or liability with respect to any breach
of any representation or warranty with respect to the Mortgage Loans (except as
set forth in Section 3.01(a)(ii)) under any circumstances.

48

          Section
3.02. Discovery of Breach. It is understood and agreed that the
representations and warranties (i) of the Depositor set forth in Section
3.01(a), (ii) of the Seller set forth in Section 4.05 and 3.01(b) and (iii) of
the Servicer pursuant to Section 4.05 of this Agreement, shall each survive
delivery of the Mortgage Files and the Assignment of Mortgage of each Mortgage
Loan to the Indenture Trustee and shall continue throughout the term of this
Agreement. With respect to the representations and warranties which are made to
the best of the Seller’s knowledge, if it is discovered by the Depositor, the
Seller, the Trust Administrator, the Indenture Trustee, the Underwriters or the
Servicer that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the Mortgage
Loans or the interests of the Noteholders or the Indenture Trustee therein,
notwithstanding such Seller’s lack of knowledge with respect to the substance
of such representation or warranty, remedies for breach will apply to such
inaccuracy. Any breach of the representation and warranty set forth in clauses
(xxi), (xxxiv), (lxxii), (lxxiv), (lxxv), (lxxvi), (lxxxv), (lxxxvi), (lxxxvii)
and (lxxxviii) of Section 3.02 of the Mortgage Loan Purchase Agreement shall be
deemed to materially and adversely affect the interest of the Trust in that
Mortgage Loan, notwithstanding the Seller’s lack of knowledge with respect to
the substance of such representation and warranty. Upon discovery by any of the
Depositor, the Servicer, the Trust Administrator or the Indenture Trustee of a
breach of any of such representations and warranties made by the Seller that adversely
and materially affects the value of the related Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
Within 60 days of the discovery by the Seller of a breach of any representation
or warranty given to the Indenture Trustee by the Seller or the Seller’s
receipt of written notice of such a breach, the Seller shall either (a) cure
such breach in all material respects, (b) repurchase such Mortgage Loan or any
property acquired in respect thereof from the Indenture Trustee at the Purchase
Price or (c) substitute a Qualifying Substitute Mortgage Loan for the affected
Mortgage Loan.

          Section
3.03. Repurchase, Purchase or Substitution of Mortgage Loans. 

          (a)
With respect to any Mortgage Loan repurchased by the Seller pursuant to Section
2.02(c) or 3.02(b) of this Agreement, or any Mortgage Loan purchased by the
Servicer pursuant to Section 4.02(b) of this Agreement, the principal portion
of the funds in respect of such repurchase or purchase of a Mortgage Loan will
be considered a Principal Prepayment and the Purchase Price shall be deposited
in the Collection Account. Upon receipt of written confirmation from the Trust
Administrator that the full amount of the Purchase Price for a Deleted Mortgage
Loan has been deposited, or upon receipt of notification from the Custodian
that it had received the Mortgage File for a Qualifying Substitute Mortgage
Loan substituted for a Deleted Mortgage Loan (and any applicable Substitution
Amount), the Indenture Trustee shall release or cause to be released and
reassign to the Depositor, the Seller or the Servicer, as applicable, the
related Mortgage File for the Deleted Mortgage Loan and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as shall be necessary to vest in such
party or its designee or assignee title to any Deleted Mortgage Loan released
pursuant hereto, free and clear of all security interests, liens and other
encumbrances created by this Agreement and the Indenture, which instruments
shall be prepared by the Servicer and the Indenture Trustee shall have no
further responsibility with respect to the Mortgage File relating to such
Deleted Mortgage Loan.

49

          (b)
With respect to each Qualifying Substitute Mortgage Loan to be delivered to the
Indenture Trustee (or its custodian) in exchange for a Deleted Mortgage Loan:
(i) the Depositor, the Seller, or the Servicer, as applicable, must deliver to
the Indenture Trustee (or a Custodian) the Mortgage File for the Qualifying
Substitute Mortgage Loan containing the documents set forth in Section 2.01(b)
along with a written certification certifying as to the delivery of such
Mortgage File and containing the granting language set forth in Section 2.01(a);
and (ii) the Seller and the Depositor will be deemed to have made, with respect
to such Qualifying Substitute Mortgage Loan, each of the representations and
warranties made by it with respect to the related Deleted Mortgage Loan. As
soon as practicable after the delivery of any Qualifying Substitute Mortgage
Loan hereunder, the Indenture Trustee, at the expense of the Depositor and at
the direction and with the cooperation of the Servicer shall (i) with respect
to a Qualifying Substitute Mortgage Loan that is a Non-MERS Mortgage Loan,
cause the Assignment of Mortgage to be recorded by the Servicer if required
pursuant to Section 2.01(c), or (ii) with respect to a Qualifying Substitute
Mortgage Loan that is a MERS Mortgage Loan, cause to be taken such actions as
are necessary to cause the Indenture Trustee (on behalf of the Issuing Entity)
to be clearly identified as the owner of each such Mortgage Loan on the records
of MERS if required pursuant to Section 2.01(c).

ARTICLE IV

ADMINISTRATION AND SERVICING OF THE

MORTGAGE LOANS BY THE SERVICER

          Section
4.01. Seller’s Engagement of Servicer to Perform Servicing Responsibilities.

          (a)
Contract for Servicing; Possession of Servicing Files. The Servicer, as
the owner of the servicing rights, by execution and delivery of this Agreement,
does hereby agree to service the Mortgage Loans pursuant to this Agreement for
the benefit of the Issuing Entity and the Indenture Trustee. The Servicer shall
maintain a Servicing File with respect to each Mortgage Loan in order to
service such Mortgage Loans pursuant to this Agreement and each Servicing File
delivered to the Servicer shall be held in trust by the Servicer for the
benefit of the Issuing Entity and the Indenture Trustee; provided, however, that the
Servicer shall not have any liability for any Servicing Files (or portions
thereof) not delivered by the Seller. The Servicer’s possession of any portion
of the Mortgage File shall be at the will of the Indenture Trustee for the sole
purpose of facilitating servicing of the related Mortgage Loan pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and the
contents of the Servicing File shall be vested in the Indenture Trustee and the
ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall
immediately vest in the Indenture Trustee and shall be retained and maintained,
in trust, by the Servicer at the will of the Indenture Trustee in such
custodial capacity only. The Servicing File retained by the Servicer pursuant
to this Agreement shall be identified in accordance with the Servicer’s file
tracking system to reflect the ownership of the related Mortgage Loan by the
Indenture Trustee. The Servicer shall release from its custody the contents of
any Servicing File retained by it only in accordance with this Agreement.

50

          (b)
Books and Records. All rights arising out of the Mortgage Loans shall be
vested in the Indenture Trustee, subject to the Servicer’s rights to service
and administer the Mortgage Loans hereunder in accordance with the terms of
this Agreement. All funds received on or in connection with a Mortgage Loan,
other than the Trust Administration Fee, the Servicing Administration Fee and
other compensation and reimbursement to which the Servicer and the Trust
Administrator are entitled as set forth herein, including but not limited to
Sections 4.02(e), 4.04(c) and 5.21 below, shall be received and held by them in
trust for the benefit of the Indenture Trustee pursuant to the terms of this
Agreement.

          In
accordance with the Servicing Standard, the Servicer shall forward to the
Custodian original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan. 

          Section
4.02. Servicing of the Mortgage Loans. 

          (a)
Servicer to Service. The Servicer shall service and administer the
Mortgage Loans from and after the Closing Date and shall have full power and
authority, acting alone, to do any and all things in connection with such
servicing and administration which the Servicer may deem necessary or
desirable, consistent with the terms of this Agreement and with Servicing
Standards. 

          Consistent
with the terms of this Agreement, the Servicer may waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of strict compliance
with any such term or in any manner grant indulgence to any Mortgagor if in the
Servicer’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Issuing Entity, the Indenture Trustee and the Noteholders; provided, however, that
unless the Mortgagor is in default, or such default is, in the judgment of the
Servicer, reasonably foreseeable, the Servicer shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, defer or forgive the payment of principal or interest, reduce or increase
the outstanding principal balance (except for actual payments of principal) or
change the final maturity date on such Mortgage Loan. In the event of any such
modification which permits the deferral of interest or principal payments on
any Mortgage Loan, the Servicer shall, on the Servicer Remittance Date in any
month in which any such principal or interest payment has been deferred, make
an Advance in accordance with Section 4.03(c) in an amount equal to the
difference between (a) such month’s principal and one month’s interest at the
Mortgage Loan Remittance Rate on the unpaid principal balance of such Mortgage
Loan and (b) the amount paid by the Mortgagor. The Servicer shall be entitled
to reimbursement for such advances to the same extent as for all other Advances
made pursuant to this Agreement. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself, the Issuing Entity and the
Indenture Trustee, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties. The
Indenture Trustee shall execute and deliver to the Servicer powers of attorney
and other documents, including, without limitation, a power of attorney in the
form attached hereto as Exhibit H, furnished to it by the Servicer and
reasonably satisfactory to the Indenture Trustee, necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement; provided that the Indenture Trustee 

51

shall not be
liable for the actions of the Servicer under any such powers of attorney. In
accordance with the Servicing Standard, after the execution of any assumption,
modification, consolidation or extension of any Mortgage Loan, the Servicer
shall update the Servicing File with copies of any documents evidencing such
assumption, modification, consolidation or extension. 

          In
servicing and administering the Mortgage Loans, the Servicer shall adhere to
the Servicing Standard.

          (b)
Delinquent and Defaulted Mortgage Loans. The Servicer, may, at any time
either (i) purchase any delinquent Mortgage Loan or REO Property in consideration
of the Purchase Price of such Mortgage Loan or (ii) substitute a defaulted
Mortgage Loan with a Qualifying Substitute Mortgage Loan. Any purchase or
substitution effected by the Servicer in reliance on this Section 4.02(b) shall
be performed in accordance with the terms specified in Section 3.03 hereof.

          In
addition, in connection with its management of the liquidation of defaulted
Mortgage Loans, the Servicer, may sell defaulted Mortgage Loans; provided, however, that the Servicer shall
not take any action that is inconsistent with or prejudices the interest of the
Noteholders in any Mortgage Loan or the rights and interest of the Depositor,
the Indenture Trustee, the Trust Administrator, the Custodian and the
Noteholders under this Agreement. 

          (c)
Collection and Liquidation of Mortgage Loans. Continuously from the
Closing Date, until the date each Mortgage Loan ceases to be subject to this
Agreement, the Servicer shall proceed diligently to collect all payments due
under each of the Mortgage Loans when the same shall become due and payable and
shall take special care in ascertaining and estimating Escrow Payments and all
other charges that will become due and payable with respect to the Mortgage
Loans and each related Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.

          The
Servicer shall use its best efforts, consistent with the Servicing Standard to
foreclose upon or otherwise comparably convert the ownership of such Mortgaged
Properties 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 3.01. The Servicer shall use its best efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal and
interest by the Trust, taking into account, among other things, the timing of
foreclosure proceedings. The foregoing is subject to the provisions that, in
any case in which Mortgaged Property shall have suffered damage, the Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its discretion (i) that such restoration
will increase the proceeds of liquidation of the related Mortgage Loan to the
Issuing Entity and the Indenture Trustee after reimbursement to itself for such
expenses, and (ii) that such expenses will be recoverable by the Servicer
through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged
Property. In the event that any payment due under any Mortgage Loan and not
otherwise postponed, deferred or waived pursuant to Section 4.02 is not paid
when the same becomes due and payable, or in the event the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any 

52

applicable
grace period, the Servicer shall take such action as (1) shall be consistent
with Servicing Standards and (2) the Servicer shall determine prudently to be
in the best interest of the Issuing Entity, the Indenture Trustee and the
Noteholders. The Servicer shall be responsible for all costs and expenses
incurred by it in any foreclosure proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the related Mortgaged Property, as contemplated in Sections
4.02(e) and 4.02(p).

          Notwithstanding
the generality of the preceding paragraph, the Servicer shall take such actions
generally in accordance with the Servicer’s established default timeline and in
accordance with Servicing Standards with respect to each Mortgage Loan and
Mortgagor for which there is a delinquency until such time as the related
Mortgagor is current with all payments due under the Mortgage Loan. The
Servicer shall be permitted to adjust its collection activities in areas
affected by hurricanes or other natural disasters.

          (d)
Establishment of and Deposits to Custodial Account. 

                    (i)
The Servicer shall segregate and hold all funds collected and received pursuant
to the Mortgage Loans separate and apart from any of its own funds and general
assets and shall initially establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, each of which
accounts shall be titled “Litton Loan Servicing L.P. in trust for Wells Fargo
Bank, N.A., as Indenture Trustee, for the Fieldstone Mortgage Investment Trust,
Series 2007-1 Mortgage-Backed Notes” and referred to herein as a “Custodial
Account.” Each Custodial Account shall be an Eligible Account. Any funds
deposited in the Custodial Account may be invested in Eligible Investments
subject to the provisions of Section 4.02(j) hereof. Funds deposited in the
Custodial Account may be drawn on by the Servicer in accordance with Section
4.02(e) hereof. The creation of any Custodial Account shall be evidenced by a
letter agreement in the form of Exhibit E hereto. A copy of such certification
or letter agreement shall be furnished to the Indenture Trustee and, upon
request, to any subsequent owner of the Mortgage Loans.

                    (ii)
The Servicer shall deposit in the Custodial Account on a daily basis, but not
more than two (2) Business Days after determining proper cash allocation and
shall retain therein, the following collections received by the Servicer and payments
made by the Servicer after the related Cut-off Date (other than scheduled
payments of principal and interest due on or before the related Cut-off Date),
as applicable:

	
 

	
 

	
 

	
 

	
          (A)
  all
  payments on account of principal on the Mortgage Loans, including all
  Principal Prepayments and any Prepayment Premiums;

	
 

	
 

	
 

	
          (B)
  all payments on account of interest on the Mortgage Loans adjusted to the
  Mortgage Loan Remittance Rate;

	
 

	
 

	
 

	
          (C)
  all Liquidation Proceeds (net of Liquidation Expenses);

	
 

	
 

	
 

	
          (D)
  all Insurance
  Proceeds including amounts required to be deposited pursuant to Section
  4.02(k) (other than proceeds to be held in the Escrow Account and applied to
  the restoration and repair of the Mortgaged Property or released to 

53

	
 

	
 

	
 

	
 

	
the
  Mortgagor in accordance with the related Mortgage Loan documents and
  Servicing Standards);

	
 

	
 

	
 

	
          (E)
  all Condemnation Proceeds that are not applied to the restoration or repair
  of the Mortgaged Property or released to the Mortgagor in accordance
  with the related Mortgage Loan documents and Servicing Standards;

	
 

	
 

	
 

	
          (F)
  with respect to each Principal Prepayment in full, the applicable
  Compensating Interest Payment;

	
 

	
 

	
 

	
          (G)
  all Advances
  made by the Servicer pursuant to Section 4.03(c);

	
 

	
 

	
 

	
 

	
          (H)
  any amounts received from the Seller, the Depositor or any other person
  giving representations and warranties with respect to the Mortgage Loans, in
  connection with the repurchase of any Mortgage Loan;

	
 

	
 

	
 

	
 

	
          (I)
  any amounts required to be deposited by the Servicer pursuant to Section 4.03(k)
  in connection with the deductible clause in any blanket hazard insurance
  policy;

	
 

	
 

	
 

	
 

	
          (J)
  any amounts
  received with respect to or related to any REO Property or REO Disposition
  Proceeds pursuant to Section 4.02(p); and

	
 

	
 

	
 

	
 

	
          (K)
  any other amounts required to be deposited in the Custodial Account pursuant
  to this Agreement.

          The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of the Servicing Administration Fee,
Prepayment Interest Excess Amounts and Ancillary Income need not be deposited
by the Servicer into the Custodial Account. Any interest paid on funds
deposited in the Custodial Account by the depository institution maintaining
such account shall accrue to the benefit of the Servicer and the Servicer shall
be entitled to retain and withdraw such interest from the Custodial Account
pursuant to Section 3.04. Additionally, any other benefit derived from the
Custodial Account associated with the receipt, disbursement and accumulation of
principal, interest, taxes, hazard insurance, mortgage insurance, etc. shall
accrue to the Servicer.

          (e)
Permitted Withdrawals from Custodial Account. 

          The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for the following purposes:

	
 

	
 

	
 

	
          (1)
  to make payments to the Trust Administrator in the amounts and in the manner
  provided for in Section 4.03(a);

	
 

	
 

	
 

	
          (2)
  in the event the Servicer has elected not to retain the Servicing
  Administration Fee out of any Mortgagor payments on account of interest or
  other recovery of interest with respect to a particular Mortgage Loan
  (including late 

54

	
 

	
 

	
 

	
collections
  of interest on such Mortgage Loan, or interest portions of Insurance
  Proceeds, Liquidation Proceeds or Condemnation Proceeds) prior to the deposit
  of such Mortgagor payment or recovery into the Custodial Account, to pay to
  itself the related Servicing Administration Fee from all such Mortgagor
  payments on account of interest or other such recovery for interest with
  respect to that Mortgage Loan;

	
 

	
 

	
 

	
          (3)
  to reimburse itself for (a) any unreimbursed Advances or Servicing Advances
  from amounts held for future payments and to the extent of Liquidation
  Proceeds (net of Liquidation Expenses), Condemnation Proceeds, Insurance
  Proceeds, REO Disposition Proceeds and other amounts received in respect of
  the related REO Property, and such other amounts as may be collected by the
  Servicer from the Mortgagor or otherwise relating to such Mortgage Loan, (b)
  any unreimbursed Advances or Servicing Advances previously made on Mortgage
  Loans modified pursuant to Section 4.02(a) where (x) such Advance or
  Servicing Advance is added to the unpaid principal balance of such Mortgage
  Loan or (y) a portion of the unpaid principal balance of such Mortgage Loan
  has been forgiven and (c) any unreimbursed Advances and Servicing Advances to
  the extent of funds held in the Custodial Account for future distribution
  that are not required to be included in amounts required to be paid to the
  Trust Administrator pursuant to clause (1) above;

	
 

	
 

	
 

	
          (4)
  to reimburse itself for any previously unreimbursed Advances or Servicing
  Advances that it determines are Nonrecoverable Advances, it being understood,
  in the case of each such reimbursement, that the Servicer’s right thereto
  shall be prior to the rights of the Noteholders;

	
 

	
 

	
 

	
          (5)
  to the extent not paid pursuant to clause (2) above, to reimburse itself for
  any unpaid Servicing Administration Fees with respect to any Second Lien
  Mortgage Loans that become Liquidated Mortgage Loans;

	
 

	
 

	
 

	
          (6)
  to pay itself investment earnings on funds deposited in the Custodial
  Account;

	
 

	
 

	
 

	
          (7)
  to transfer funds to another Eligible Account in accordance with Section
  4.02(j) hereof;

	
 

	
 

	
 

	
          (8)
  to invest funds in certain Eligible Investments in accordance with Section
  4.02(d)(i) and Section 4.02(i) hereof;

	
 

	
 

	
 

	
          (9)
  to withdraw funds deposited in error;

	
 

	
 

	
 

	
          (10)
  to pay itself amounts payable to the Servicer in accordance with Section
  4.06(b) hereof;

	
 

	
 

	
 

	
          (11)
  to clear and terminate the Custodial Account upon the termination of this
  Agreement; and

55

                              (12)
to pay itself any Prepayment Interest Excess Amount.

          (f)
Establishment of and Deposits to Escrow Account. The Servicer shall segregate and hold all
funds collected and received pursuant to a Mortgage Loan constituting Escrow
Payments separate and apart from any of its own funds and general assets and
shall establish and maintain one or more Escrow Accounts, in the form of time
deposit or demand accounts, titled “Litton Loan Servicing LP in trust for Wells
Fargo Bank, N.A., as Indenture Trustee, for the Fieldstone Mortgage Investment
Trust, Series 2007-1 and for various
mortgagors.”  The Escrow Accounts shall
be established with an Eligible Institution in a manner that shall
provide maximum available insurance thereunder.  Nothing herein shall require the Servicer to compel a Mortgagor
to establish an Escrow Account in violation of applicable law.  Funds deposited in the Escrow Account may be
drawn on by the Servicer in accordance with Section 4.02(g). The creation of any Escrow Account shall be
evidenced by a letter agreement in the form of Exhibit F hereto. 

          The
Servicer shall deposit in the Escrow Account or Accounts on a daily basis but
not more than two (2) Business Days after determining proper cash allocation,
and retain therein:

                    (i)
all Escrow Payments collected on account of the Mortgage Loans, for the purpose
of effecting timely payment of any such items as required under the terms of
this Agreement; and

                    (ii)
all amounts representing Insurance Proceeds or Condemnation Proceeds which are
to be applied to the restoration or repair of any Mortgaged Property related to
a First Lien Mortgage Loan.

          The
Servicer shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section
4.02(g).  The Servicer shall be entitled
to retain any interest earnings paid on funds deposited in the Escrow Account by
the depository institution, other than interest on escrowed funds required by
law to be paid to the Mortgagor.  To the
extent required by law, the Servicer shall pay interest on escrowed funds to
the Mortgagor notwithstanding that the Escrow Account may be non-interest
bearing or the interest earnings paid thereon are insufficient for such
purposes.

          
(g) Permitted Withdrawals from Escrow Account.  Withdrawals from the Escrow Account or Accounts may be made by
the Servicer only:

                    (i)
to effect timely payments of taxes, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage Loan;

                    (ii)
to reimburse the Servicer for any Servicing Advance of an Escrow Payment made
by the Servicer with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late collections of
Escrow Payments thereunder;

                    (iii)
to refund to any Mortgagor any funds found to be in excess of the amounts
required to be escrowed under the terms of the related Mortgage Loan;

56

                    (iv)
to the extent permitted by applicable law, for transfer to the Custodial
Account and application to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the related Mortgage and Mortgage Note;

                    (v)
for application to restoration or repair of the Mortgaged Property related to a
First Lien Mortgage Loan in accordance with Section 4.02(o);

                    (vi)
to pay to the Servicer, or any Mortgagor to the extent required by law, any
interest paid on the funds deposited in the Escrow Account; and

                    (vii)
to clear and terminate the Escrow Account on the termination of this Agreement.

          The
Servicer will be responsible for the administration of the Escrow Accounts and
will be obligated to make Servicing Advances to the Escrow Account in respect
of its obligations under this Agreement, reimbursable from the Escrow Accounts
or Custodial Account to the extent not collected from the related Mortgagor,
anything to the contrary notwithstanding, when and as necessary to avoid the
lapse of insurance coverage on the Mortgaged Property related to a First Lien
Mortgage Loan, or which the Servicer knows is necessary to avoid the loss of
the Mortgaged Property related to a First Lien Mortgage Loan 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
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property in order to prevent loss of title to the Mortgaged Property
related to a First Lien Mortgage Loan.

          (h)
Notification of Adjustments.
With respect to each Mortgage Loan, the Servicer shall adjust the
Mortgage Rate on the related interest rate adjustment date and shall adjust the
Scheduled Payment on the related mortgage payment adjustment date, if
applicable, in compliance with the requirements of applicable law and the
related Mortgage and Mortgage Note.  The
Servicer shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Rate and Scheduled Payment adjustments.  The Servicer shall promptly, upon written
request therefor, deliver to the Trust Administrator such notifications and any
additional applicable data regarding such adjustments and the methods used to
calculate and implement such adjustments.
Upon the discovery by the Servicer or the receipt of notice from the
Trust Administrator that the Servicer has failed to adjust a Mortgage Rate or
Scheduled Payment in accordance with the terms of the related Mortgage Note,
the Servicer shall immediately deposit in the Custodial Account from its own
funds the amount of any interest loss or deferral caused the Seller thereby; provided, however,
the Servicer shall be held harmless with respect to any Mortgage Interest Rate
adjustments made by any prior servicer.

          (i)
Payment of Taxes, Insurance and Other Charges.  

                    (i)
With respect to each Mortgage Loan which provides for Escrow Payments, the
Servicer shall maintain accurate records reflecting the status of taxes, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and shall obtain,
from time to time, all bills for the payment

57

of such
charges (including renewal premiums) (“Property Charges”) and shall
effect payment thereof prior to the applicable penalty or termination date,
employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage.  The Servicer shall effect timely payment of
all such charges irrespective of each Mortgagor’s faithful performance in the
payment of the same or the making of the Escrow Payments.

                    (ii)
To the extent that a Mortgage does not provide for Escrow Payments and the
Servicer receives proper notification, the Servicer shall make Servicing Advances
from its own funds to protect the lien status of the Mortgage, or at such other
time as the Servicer determines to be in the best interest of the Trust; provided, that in any event the Servicer shall pay
such charges on or before any date by which payment is necessary to preserve
the lien status of the Mortgage.  The
Servicer shall pay any late fee or penalty which is necessary to preserve the
lien status of a Mortgage Property.

          (j)
Protection of Accounts.  The
Servicer may transfer the Custodial Account or the Escrow Account to a
different Eligible Institution from time to time.  The Servicer shall give notice to the Trust Administrator, the
Indenture Trustee and the Swap Counterparty of any change in the location of
the Custodial Account.

          The
Servicer shall bear any expenses, losses or damages sustained by the Trust
Administrator or the Indenture Trustee if the Custodial Account and/or the
Escrow Account are not Eligible Accounts.

          Amounts
on deposit in the Custodial Account may be invested at the option of the
Servicer and the Seller, respectively, but only in Eligible Investments.  Any such Eligible Investment with respect to
the Custodial Account shall mature no later than one (1) Business Day prior to
the Servicer Remittance Date in each month; provided, however, that
if such Eligible Investment is an obligation of an Eligible Institution (other
than the Servicer) that maintains the Custodial Account, then such Eligible
Investment may mature on the related Servicer Remittance Date.  Any such Eligible Investment shall be made
in the name of the Servicer in trust for the benefit of the Indenture
Trustee.  All income on or gain realized
from any such Eligible Investment shall be for the benefit of the Servicer and
may be withdrawn at any time by the Servicer.
Any losses incurred in respect of any such investment shall be deposited
in the Custodial Account by the Servicer out of its own funds immediately as
realized.  If, at any time, the amount
on deposit in the Custodial Account exceeds the amount of the applicable FDIC
insurance, such excess above the amount of the applicable FDIC insurance shall
be invested in Eligible Investments.

          (k)
Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each First Lien Mortgage
Loan hazard insurance such that all buildings upon the Mortgaged Property are
insured by a generally acceptable insurer acceptable under the Servicing
Standard 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 which is at least equal to the lesser of (i) the amount necessary to
fully compensate for any damage or loss to the improvements which are a part of
such property on a replacement cost basis or (ii) the Principal Balance of the

58

Mortgage Loan,
in each case in an amount not less than such as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer.

          If
upon origination of the Mortgage Loan the related Mortgaged Property was
located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration shall be in effect
with a generally acceptable insurance carrier acceptable under Servicing
Standards in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended.  If at any time during the term of the Mortgage Loan, the Servicer
determines in accordance with applicable law and pursuant to Servicing
Standards that a Mortgaged Property is located in a special flood hazard area
and is not covered by flood insurance or is covered in an amount less than the
amount required by the Flood Disaster Protection Act of 1973, as amended, and
in accordance with the Servicing Standard, the Servicer shall notify the
related Mortgagor that the Mortgagor must obtain such flood insurance coverage,
and if said Mortgagor fails to obtain the required flood insurance coverage
after such notification, the Servicer shall cause to be maintained the required
flood insurance on the Mortgagor’s behalf.

          The
Servicer shall cause to be maintained on each Mortgaged Property such other or
additional insurance as may be required pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance, or pursuant to the requirements of any private mortgage
guaranty insurer, or as may be required to conform with Servicing Standards.

          All
policies required hereunder shall name the Servicer as loss payee and shall be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.

          The
Servicer shall not interfere with the Mortgagor’s freedom of choice in
selecting either his insurance carrier or agent; provided, however, that the Servicer shall not accept any such insurance
policies from insurance companies unless such companies are generally
acceptable under Servicing Standards.
The Servicer shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.

          Pursuant
to Section 4.02(d), any amounts collected by the Servicer under any such
policies (other than amounts to be deposited in the Escrow Account and applied
to the restoration or repair of the related Mortgaged Property, or property
acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Servicer’s normal servicing procedures) shall
be deposited in the Custodial Account subject to withdrawal pursuant to Section
4.02(e).

59

          Notwithstanding
anything set forth in the preceding paragraph, the Servicer agrees to indemnify
the Indenture Trustee, the Issuing Entity, the Noteholders and the Trust
Administrator for any claims, losses, damages, penalties, fines, forfeitures,
legal fees and related costs, judgments and any other costs, fees and expenses
that any such indemnified party may sustain in any way related to the failure
of the Mortgagor (or the Servicer) to maintain hazard or flood insurance with
respect to the related Mortgaged Property which complies with the requirements
of this section.

          (l)
Maintenance of Mortgage Impairment Insurance.  In the event that the Servicer shall obtain and maintain a
blanket policy insuring against losses arising from fire and hazards covered
under extended coverage on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the amount required pursuant to
Section 4.02(k) and otherwise complies with all other requirements of Section
4.02(k), it shall conclusively be deemed to have satisfied its obligations as
set forth in Section 4.02(k).  Any
amounts collected by the Servicer under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 4.02(e).  Such policy may
contain a deductible clause, in which case, in the event that there shall not
have been maintained on the related Mortgaged Property a policy complying with
Section 4.02(k), and there shall have been a loss which would have been covered
by such policy, the Servicer shall deposit in the Custodial Account at the time
of such loss the amount not otherwise payable under the blanket policy because
of such deductible clause, such amount to deposited from the Servicer’s funds,
without reimbursement therefor.  Upon
request of the Indenture Trustee, the Servicer shall cause to be delivered to
such person a certified true copy of such policy and a statement from the
insurer that the insurer shall endeavor to notify the Indenture Trustee within
30 days prior to such policy termination or material modification.

          (m)
Maintenance of Fidelity Bond and Errors and Omissions Insurance.  The Servicer shall maintain with responsible
companies, at its own expense, a blanket Fidelity Bond and an Errors and
Omissions Insurance Policy, with broad coverage on all officers, employees or
other persons acting in any capacity requiring such persons to handle funds,
money, documents or papers relating to the Mortgage Loans (“Servicer
Employees”).  Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker’s Blanket Bond and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Servicer Employees.
Such Fidelity Bond and Errors and Omissions Insurance Policy also shall
protect and insure the Servicer against losses in connection with the release
or satisfaction of a Mortgage Loan without having obtained payment in full of
the indebtedness secured thereby.  No
provision of this Section 4.02(m) requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement.  The minimum coverage under any such bond and
insurance policy shall be at least equal to the coverage amounts which are
acceptable for the Servicer as determined by Fannie Mae and Freddie Mac.  Upon the request of the Indenture Trustee,
the Servicer shall cause to be delivered to such party a certified true copy of
such fidelity bond and insurance policy and a statement from the surety and the
insurer that the surety and insurer shall endeavor to notify the Indenture
Trustee within 30 days prior to such fidelity bond’s and errors and omissions
insurance policy’s termination or material modification.

60

          (n)
Inspections.  The Servicer shall
inspect the Mortgaged Property as often as deemed necessary by the Servicer to
assure itself that the value of the Mortgaged Property is being preserved.  In addition, the Servicer shall inspect the
Mortgaged Property and/or take such other actions as may be necessary or
appropriate in accordance with the Servicing Standard or as may be required by
the primary mortgage guaranty insurer.  The Servicer shall keep a report of each such inspection.

          (o)
Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Indenture Trustee prior
to releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor
to be applied to the restoration or repair of the Mortgaged Property if such
release is in accordance with Servicing Standards.  At a minimum, the Servicer shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:

                    (i)
the Servicer shall receive satisfactory independent verification of completion
of repairs and issuance of any required approvals with respect thereto;

                    
(ii) the Servicer shall take all steps necessary to preserve the priority of
the lien of the Mortgage, including, but not limited to requiring waivers with
respect to mechanics’ and materialmen’s liens; and

                    
(iii) pending repairs or restoration, the Servicer shall place the Insurance
Proceeds or Condemnation Proceeds in the Escrow Account.

          (p)
Title, Management and Disposition of REO Property.  In the event that title to any Mortgaged
Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed
or certificate of sale shall be taken in the name of the Indenture Trustee or
its nominee (which nominee shall not be the Servicer) in trust for the benefit
of the Noteholders and the Swap Counterparty, or in the event the Indenture
Trustee is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the “doing business” or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Servicer (with a
copy delivered to the Indenture Trustee) from any attorney duly licensed to
practice law in the state where the REO Property is located.  The Person or Persons holding such title
other than the Indenture Trustee shall acknowledge in writing that such title
is being held as nominee for the Indenture Trustee.

          The
Servicer shall manage, conserve, protect and operate each REO Property for the
Indenture Trustee solely for the purpose of its prompt disposition and
sale.  The Servicer, either itself or
through an agent selected by the Servicer, shall manage, conserve, protect and
operate the REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed.  The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Issuing Entity, the
Indenture Trustee and the Noteholders.

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          If
the Servicer determines that it is in the best economic interest of the
Noteholders to take such actions as are necessary to bring any Mortgaged
Property into 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 Noteholders.  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 from the Custodial Account.

          The
Servicer shall also maintain on each REO Property fire and hazard insurance
with extended coverage in amount which is at least equal to the replacement
cost of the improvements which are a part of such property and, to the extent
required and available under the Flood Disaster Protection Act of 1973, as
amended, flood insurance in the amount required above.

          The
proceeds of sale of the REO Property shall be promptly deposited in the
Custodial Account.  As soon as practical
thereafter the expenses of such sale shall be paid and the Servicer shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Administration Fees and unreimbursed advances made pursuant to this
Section or Section 4.03.

          The
Servicer shall make Servicing Advances of all funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of maintaining any hazard insurance pursuant to Section 4.02(k), such advances
to be reimbursed from the disposition or liquidation proceeds of the REO
Property.  The Servicer shall make
monthly remittances on each Servicer Remittance Date to the Trust Administrator
of the net cash flow from the REO Property (which shall equal the revenues from
such REO Property net of the expenses described in this Section 4.02(p) and of
any reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).

          The
Servicer may write-off any Second Lien Mortgage Loan that has been Delinquent
for a period of 180 days or more if the Servicer determines that significant
net recoveries with respect to such Mortgage Loan are not probable.  Once a Mortgage Loan has been charged off,
the Servicer will discontinue making Advances, the Servicer will not be entitled
to any additional servicing compensation following the charge off date, and the
Charged Off Loan will give rise to a Realized Loss with respect to any Charged
Off Loan, the Servicer shall be entitled to be reimbursed for unreimbursed
Advances and Servicing Advances and to pay itself for accrued and unpaid
Servicing Fees pursuant to Section 4.02(e).

          Any
recoveries on such Charged Off Loans (net of unpaid Servicing Fees accrued
prior to the date thereof and out-of-pocket expenses incurred by the Servicer)
will be treated as Liquidation Proceeds distributable by the Trust
Administrator in accordance with the provisions of Section 6.02.

          (q)
Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 4.03(b), the
Servicer shall furnish to the Indenture Trustee on or before the 10th calendar
day in each month a statement with respect to any REO Property covering the
operation of such REO Property for
the previous month and the Servicer’s efforts in connection with the sale of

62

such REO
Property and any rental of such REO Property incidental to the sale thereof for
the previous month.  

          (r)
Liquidation Reports.  Together
with the statement furnished pursuant to Section 4.03(b), upon the foreclosure
sale of any Mortgaged Property or the acquisition thereof by the Indenture
Trustee pursuant to a deed in lieu of foreclosure, the Servicer shall submit to
the Indenture Trustee a monthly liquidation report with respect to such
Mortgaged Property.

          (s)
Reports of Foreclosures and Abandonments of Mortgaged Property.  The Servicer shall report such foreclosure
or abandonment as required pursuant to Section 6050J of the Code on or before
the last day of February of each year.

          (t)
Prepayment Premiums.  All
Prepayment Premiums collected shall be payable to the holder of the Ownership
Certificate pursuant to Section 6.02 of this Agreement.

          (u)
Compliance with Safeguarding Customer Information Requirements.  The Servicer has implemented and will
maintain security measures designed to meet the objectives of the Interagency
Guidelines Establishing Standards for Safeguarding Customer Information
published in final form on February 1, 2001, 66 Fed. Reg. 8616, and the rules
promulgated thereunder, as amended from time to time (the “Guidelines”).

          (v)
Presentment of Claims and Collection of Proceeds.  The Servicer shall prepare and present on
behalf of the Indenture Trustee and the Noteholders all claims under the
Insurance Policies with respect to the Mortgage Loans, 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
Servicer in respect of such policies or bonds shall be promptly deposited in
the Custodial 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 requisite 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
4.03. Payments To the Trust Administrator.

          (a)
Remittances.  No later than 3:00
P.M. (EST) on each Servicer Remittance Date, the Servicer shall remit on a
scheduled/scheduled basis by wire transfer of immediately available funds to
the Trust Administrator (a) all amounts deposited in the Custodial Account as
of the close of business on the last day of the related Due Period (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.02(e)),
plus (b) all Advances, if any, which the Servicer is obligated to make pursuant
to Section 4.03(c), minus (c) any amounts attributable to Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds or
REO Disposition Proceeds received after the applicable Prepayment Period, which
amounts shall be remitted on the following Servicer Remittance Date, together
with any additional interest required to be deposited in the Custodial Account
in connection with such Principal Prepayment in accordance with Section
4.02(d)(ii)(G) and Section 4.04(c), and minus (d) any amounts attributable to
Scheduled Payments collected but due on a Due Date or Due Dates subsequent to
the first day of the month in which such Servicer Remittance Date occurs, which
amounts shall

63

be remitted on
the Servicer Remittance Date next succeeding the Due Date related to such
Scheduled Payment.

          With
respect to any remittance received by the Trust Administrator after the
Servicer Remittance Date on which such remittance was due, the Servicer shall
pay to the Trust Administrator interest on any such late remittance at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law.  Such
interest shall be deposited in the Custodial Account by the Servicer on the
date such late remittance is made and shall cover the period commencing with
the day following such Servicer Remittance Date and ending with the Business
Day on which such remittance is made, both inclusive.  Such interest shall be remitted on the next succeeding Servicer
Remittance Date.  The payment by the
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.

          All
remittances required to be made to the Trust Administrator shall be made to the
following wire account or to such other account as may be specified by the
Trust Administrator from time to time:

                 Wells Fargo
Bank, N.A.

                 ABA#:  121-000-248

                 Account Name: Corporate Trust Clearing

                 Account Number:  3970771416

                 For further credit to:  53140600,
Fieldstone 2007-1

          (b)
Statements to the Trust Administrator.
No later than the 18th day of each calendar month (or, if
such 18th day is not a Business Day, then on the immediately
preceding Business Day or if such 18th day is a holiday, the
immediately succeeding Business Day), the Servicer shall furnish to the Trust
Administrator (i) a monthly remittance advice in the format set forth in
Exhibit G-1 hereto (or in such other format mutually agreed to between the
Servicer and the Trust Administrator) relating to the period ending on the last
day of the preceding calendar month and (ii) all such information required
pursuant to clause (i) above on a magnetic tape or other similar media
reasonably acceptable to the Trust Administrator.  

          In
addition, upon request from the Trust Adminstrator, the Servicer shall provide
(to the extent and as such information becomes reasonably available to the
Servicer) to the Trust Administrator such information concerning the Mortgage
Loans and annual remittances to the Trust Administrator therefrom as is
necessary for the Trust Administrator to prepare the reports required by
Section 5.09(c).  Such obligation of the
Servicer shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Servicer to the Trust
Administrator pursuant to any requirements of the Code as from time to time are
in force.  To the extent available to
the Servicer, the Servicer shall also provide to the Trust Administrator such
information as may be requested by it and required for the completion of any
tax reporting responsibility of the Trust Administrator within such reasonable
time frame as shall enable the Trust Administrator to timely file each Schedule
Q (or other applicable tax report or return) required to be filed by it.

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          (c)
Advances by Servicer.  On each
Servicer Remittance Date, subject to Section 6.05, the Servicer shall deposit
in the Custodial Account from its own funds or from amounts held for future
payment, or a combination of both, an amount equal to all Scheduled Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due on
the Mortgage Loans during the applicable Due Period and which were delinquent
at the close of business on the immediately preceding Determination Date.  Any amounts held for future payment and so
used shall be replaced by the Servicer by deposit in the Custodial Account on
or before any future Servicer Remittance Date if funds in the Custodial Account
on such Servicer Remittance Date shall be less than remittances to the Trust
Administrator required to be made on such Servicer Remittance Date.  

          The
Servicer’s obligation to make such Advances as to any Mortgage Loan will
continue through the last Scheduled Payment due prior to the payment in full of
the Mortgage Loan, or through the last Remittance Date prior to the Remittance
Date for the payment of all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds and Condemnation Proceeds) with
respect to the related Mortgage Loan.

          (d)
Due Dates Other Than the First of the Month.  Mortgage Loans having Due Dates other than the first day of a
month shall be accounted for as described in this Section 4.03(d).  Any Scheduled Payment due on a day other
than the first day of each month shall be considered due on the first day of
the month following the month in which that payment is due as if such payment
were due on the first day of that month.
For example, a Scheduled Payment due on November 15 shall be considered
to be due on December 1.  Any Scheduled
Payment due and collected on a Mortgage Loan after the Cut-off Date shall be
deposited in the Custodial Account.  For
Mortgage Loans with Due Dates on the first day of a month, deposits to the
Custodial Account begin with the Scheduled Payment due on the first of the
month following the Cut-off Date.

          (e)
Credit Reporting.  For each
Mortgage Loan, in accordance with its current servicing practices, the Servicer
will accurately and fully report its underlying borrower credit files to each
of the following credit repositories or their successors:  Equifax Credit Information Services, Inc.,
Trans Union, LLC and Experian Information Solution, Inc., on a monthly basis in
a timely manner.  

          Section
4.04. General Servicing Procedures.

          (a)
Transfers of Mortgaged Property.
The Servicer shall use its best efforts to enforce any “due-on-sale”
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note.  When the Mortgaged Property has been
conveyed by the Mortgagor, the Servicer shall, to the extent it has knowledge
of such conveyance, exercise its rights to accelerate the maturity of such
Mortgage Loan under the “due-on-sale” clause applicable thereto; provided, however, that the Servicer shall
not exercise such rights if
prohibited by law from doing so.

65

          If
the Servicer reasonably believes it is unable under applicable law to enforce
such “due-on-sale” clause, the Servicer shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed
pursuant to which such person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Servicer is
unable under applicable law to require that the original Mortgagor remain
liable under the Mortgage Note and the Servicer has the prior consent of the
primary mortgage guaranty insurer, a substitution of liability agreement with
the seller of the Mortgaged Property pursuant to which the original Mortgagor
is released from liability and the buyer of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note.  In connection with any such assumption,
neither the Mortgage Rate borne by the related Mortgage Note, the timing of
principal or interest payments on the Mortgage Loan, the term of the Mortgage
Loan nor the outstanding principal amount of the Mortgage Loan shall be
changed.

          To
the extent that any Mortgage Loan is assumable, the Servicer shall inquire
diligently into the creditworthiness of the proposed transferee, and shall use
the underwriting criteria for approving the credit of the proposed transferee
which are used by the Servicer, its affiliates or Fannie Mae with respect to
underwriting mortgage loans of the same type as the Mortgage Loans.  If the credit of the proposed transferee
does not meet such underwriting criteria, the Servicer diligently shall, to the
extent permitted by the Mortgage or the Mortgage Note and by applicable law,
accelerate the maturity of the Mortgage Loan.

          (b)
Satisfaction of Mortgages and Release of Mortgage Files.  Upon the payment in full of any Mortgage
Loan, or the receipt by the Servicer of a notification that payment in full
will be escrowed in a manner customary for such purposes, the Servicer shall
notify the Trust Administrator in the monthly remittance advice as provided in
Section 4.03(b), and may request the release of any Mortgage Loan Documents
from the Custodian in accordance with the Custodial Agreement.

          If
the Servicer satisfies or releases a Mortgage without first having obtained
payment in full of the indebtedness secured by the Mortgage or should the
Servicer otherwise prejudice any rights the Seller, the Indenture Trustee or the
Issuing Entity may have under the mortgage instruments, the Servicer shall
deposit into the Custodial Account the entire outstanding principal balance,
plus all accrued interest on such Mortgage Loan, on the day preceding the
Servicer Remittance Date in the month following the date of such release.  The Servicer shall maintain the Fidelity
Bond and Errors and Omissions Insurance Policy as provided for in Section
4.02(m) insuring the Servicer against any loss it may sustain with respect to
any Mortgage Loan not satisfied in accordance with the procedures set forth
herein.

          (c)
Servicing Compensation.  As
consideration for servicing the Mortgage Loans subject to this Agreement, the
Servicer shall be paid the Servicing Administration Fee for each Mortgage Loan
remaining subject to this Agreement during any month or part thereof.  Such Servicing Administration Fee shall be
payable monthly and retained by the Servicer.
Additional servicing compensation in the form of Ancillary Income
(notwithstanding any provision of Section 4.02(a) to the contrary) shall be
retained by the Servicer only and is not required to be deposited in the
Custodial Account.  The obligation of
the Issuing Entity to pay the Servicing Administration Fee is limited to, and
the Servicing Administration Fee is payable from, the 

66

interest portion
(including recoveries with respect to interest from
Liquidation Proceeds) of such Scheduled Payment collected by the Servicer, or
as otherwise provided in Section 4.02(e).

          The
Servicer shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.

          The
Servicing Administration Fee payable to or retained by the Servicer, with
respect to any Due Period shall be reduced by the Compensating Interest Payment
for the related Prepayment Period required to be deposited in the Custodial
Account and remitted to the Trust Administrator on the related Servicer
Remittance Date.  

          As
additional consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer shall be entitled to receive certain income and gains
realized from Eligible Investments in the Collection Account, subject to the
provisions of Section 5.07(e) of this Agreement.

          (d)
Annual Statement of Compliance.
The Servicer shall deliver, and shall cause any Servicing Function
Participant engaged by it to deliver, to the Depositor and the Trust Administrator
on or before March 15 of each year, commencing in March 2008, an Officer’s
Certificate stating, as to the signer thereof, that (A) a review of the
Servicer’s activities during the preceding calendar year or portion thereof and
of the Servicer’s performance under this Agreement has been made under such
officer’s supervision and (B) to the best of such officer’s knowledge, based on
such review, the Servicer has fulfilled all its obligations under this
Agreement in all material respects throughout such year or portion thereof, or,
if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status thereof.  

          In
the event the Servicer is terminated or resigns pursuant to the terms of this
Agreement the Servicer shall provide an Officer’s Certificate pursuant to this
Section 4.04 with respect to the period of time it was subject to this
Agreement, notwithstanding such termination or resignation.

          (e)
Annual Assessment and Attestation.
By March 15 of each year, commencing in March 2008, the Servicer, at its
own expense, shall furnish to the Trust Administrator and the Depositor, a
report on an assessment of compliance with the Relevant Servicing Criteria that
contains (A) a statement by such party of its responsibility for assessing
compliance with the Relevant Servicing Criteria, (B) a statement that such
party used the Relevant Servicing Criteria to assess compliance with the
Relevant Servicing Criteria, (C) such party’s assessment of compliance with the
Relevant Servicing Criteria as of and for the fiscal year covered by the Form
10-K required to be filed pursuant to Section 8.02, including, if there has
been any material instance of noncompliance with the Relevant Servicing
Criteria, a discussion of each such failure and the nature and status thereof,
and (D) a statement that a registered public accounting firm has issued an
attestation report on such party’s assessment of compliance with the Relevant
Servicing Criteria as of and for such period.

67

          By
March 15 of each year, commencing in March 2008, the Servicer, at its own
expense, shall cause, and shall cause any Servicing Function Participant
engaged by it to cause, each at its own expense, a registered public accounting
firm (which may also render other services to the Servicer, or such other
Servicing Function Participants, as the case may be) and that is a member of
the American Institute of Certified Public Accountants to furnish an
attestation report to the Trust Administrator and the Depositor, to the effect
that (i) it has obtained a representation regarding certain matters from the
management of such party, which includes an assertion that such party has
complied with the Relevant Servicing Criteria, and (ii) on the basis of an
examination conducted by such firm in accordance with standards for attestation
engagements issued or adopted by the PCAOB, it is expressing an opinion as to
whether such party’s compliance with the Relevant Servicing Criteria was fairly
stated in all material respects, or it cannot express an overall opinion
regarding such party’s assessment of compliance with the Relevant Servicing
Criteria.  In the event that an overall
opinion cannot be expressed, such registered public accounting firm shall state
in such report why it was unable to express such an opinion.  Such report must be available for general
use and not contain restricted use language.

          (f)
Inspection.  The Servicer shall
provide the Indenture Trustee and the Trust Administrator, upon reasonable
prior advance notice, during normal business hours, access to all records
maintained by the Servicer in respect of its rights and obligations pertaining
to the Mortgage Loans hereunder and access to officers of the Servicer
responsible for such obligations.  Upon
request, the Servicer agrees to discuss with the Indenture Trustee and the
Trust Administrator its affairs, finances and accounts relating to the Mortgage
Loans covered under this Agreement.

          Section
4.05. Representations, Warranties and Agreements.  

          (a)
Representations, Warranties and Agreements of the Servicer.  

                    (i)
Due Organization.  The Servicer is a
limited partnership formed under the laws of Delaware, is validly existing and
in good standing under the laws of the state of its organization and has the
organizational power and authority to own its assets and to transact the
business in which it is currently engaged. It is duly qualified to do business
as a foreign organization and is in good standing in each jurisdiction in which
the character of the business transacted by it or any properties owned or
leased by it requires such qualification and in which the failure so to qualify
would have a material adverse effect on its business, properties, assets, or
condition (financial or other);

                    (ii)
Authority.  The Servicer has the
organizational power and authority to make, execute, deliver, and perform this
Agreement and all of the transactions contemplated under this Agreement, and
has taken all necessary organizational action to authorize the execution,
delivery, and performance of this Agreement. When executed and delivered, this
Agreement will constitute its legal, valid and binding obligation enforceable
in accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally and by the availability of equitable remedies;

68

                   
(iii) Ordinary Course of Business.  The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Servicer;

                    (iv)
No Conflicts.  Neither the execution and
delivery of this Agreement, the acquisition of the servicing responsibilities
by the Servicer or the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, will (a)
conflict with or result in a breach of any of the terms, conditions or
provisions of the Servicer’s partnership agreement or any legal restriction or
any agreement or instrument to which the Servicer is now a party or by which it
is bound, (b) constitute a default under any of the foregoing, (c) result in an
acceleration under any of the foregoing, (d) result in the violation of any
law, rule, regulation, order, judgment or decree to which the Servicer or its
property is subject or (e) impair the ability of the Servicer to act as Servicer
hereunder with respect to the Mortgage Loans, or impair the value of the
Mortgage Loans;

                    (v)
Ability to Perform.  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)
No Litigation Pending.  There is no
action, suit, proceeding or investigation pending or, to the Servicer’s
knowledge, threatened against the Servicer which, either in any one instance or
in the aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer, or in
any material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or in any material liability on the
part of the Servicer, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer to perform under the terms of
this Agreement;

                    (vii)
No Consent Required.  No consent,
approval, authorization or order of any court or governmental agency or body is
required for the execution, delivery and performance by the Servicer of or
compliance by the Servicer with this Agreement, or if required, such approval
has been obtained prior to the Closing Date;

                    (viii)
No Default.  The Servicer is not in
default, and no event or condition exists that after the giving of notice or
lapse of time or both, would constitute an event of default under any material
mortgage, indenture, contract, agreement, judgment, or other undertaking, to
which the Servicer is a party or which purports to be binding upon it or upon
any of its assets, which default could impair materially the ability of the
Servicer to perform under the terms of this Agreement;

                    (ix)
Ability to Service. The Servicer is an approved seller/servicer of conventional
residential mortgage loans for Fannie Mae and Freddie Mac, with the facilities,
procedures and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans.  The Servicer is in good standing to service
mortgage loans for either Fannie Mae or Freddie Mac, and no event has occurred,
including but not limited to a change in insurance coverage, which would make
the Servicer unable to comply with either

69

Fannie Mae or
Freddie Mac eligibility requirements or which would require notification to
either of Fannie Mae or Freddie Mac; and

                     (x)
No Untrue Information.  Neither this
Agreement nor any statement, report or other document furnished or to be
furnished by the Servicer pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained therein not misleading.

          (b)
[Reserved.] 

          (c)
Remedies for Breach of Representations and Warranties of the Servicer.  It is understood and agreed that the
representations and warranties set forth in Sections 4.05(a)shall survive the engagement of the
Servicer to perform the servicing responsibilities as of the Closing Date
hereunder and the delivery of the Servicing Files to the Servicer, and shall
inure to the benefit of the Indenture Trustee.
Upon discovery by either the Servicer or the Indenture Trustee of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the ability of the Servicer to perform its duties and
obligations under this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property or the interests of the Indenture
Trustee, the party discovering such breach shall give prompt written notice to
the other parties.

          Within
60 days of the earlier of either discovery by or notice to the Servicer of any
breach of a representation or warranty set forth in Section 4.05(a) which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Loans, the Mortgaged Property or
the priority of the security interest on such Mortgaged Property, the Servicer
shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Servicer shall, at the
Indenture Trustee’s option, assign its rights and obligations under this
Agreement (or respecting the affected Mortgage Loans) to a successor
servicer.  Such assignment shall be made
in accordance with Sections 4.06(e) and 4.06(f).

          In
addition, the Servicer shall indemnify all other parties to this Agreement and
hold each of them harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Servicer’s representations and warranties contained in Section 4.05.

          Any
cause of action against the Servicer relating to or arising out of the breach
of any representations and warranties made in Section 4.05(a) shall accrue upon
(i) discovery of such breach by the Servicer or notice thereof by the Depositor
or the Indenture Trustee to the Servicer, (ii) failure by the Servicer to cure
such breach within the applicable cure period, and (iii) demand upon the
Servicer by the Indenture Trustee for compliance with this Agreement.

          (d)
Additional Indemnification by the Servicer.  The Servicer shall indemnify the Depositor, the Indenture
Trustee, the Owner Trustee and the Trust Administrator and hold each

70

of them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses (collectively, the “Liabilities”) that
the indemnified party may sustain in any way related to (i) the Servicer’s
willful misfeasance, bad faith or gross negligence in the performance of its duties
under this Agreement, or (ii) the failure of the Servicer to perform its duties
and service the Mortgage Loans in accordance with the terms of this
Agreement.  The Servicer shall
immediately notify the Depositor, the Indenture Trustee, the Owner Trustee and
the Trust Administrator if a claim is made by a third party with respect to
this Agreement or the Mortgage Loans that may result in such Liabilities, and
the Servicer shall assume (with the prior written consent of the indemnified
party) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or any indemnified party in
respect of such claim and follow any written instructions received from such
indemnified party in connection with such claim.  The Servicer shall be reimbursed promptly from the Trust Fund for
all amounts advanced by it pursuant to the preceding sentence except when the
claim is in any way related to the Servicer’s indemnification pursuant to this
Section 4.05(d), or the failure of the Servicer to service and administer the
Mortgage Loans in accordance with the terms of this Agreement.

          Section
4.06. The Servicer.  

          (a)
Merger or Consolidation of the Servicer.  The Servicer shall keep in full effect its existence, rights and
franchises as a limited partnership, and shall obtain and preserve its
qualification to do business as a foreign limited partnership in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Agreement or any of the Mortgage Loans
and to perform its duties under this Agreement.

          Any
Person into which the Servicer may be merged or consolidated, or any entity
resulting from any merger (including a sale of all or substantially all
assets), conversion or consolidation to which the Servicer shall be a party, or
any Person succeeding to the business of the Servicer, shall be the successor
of the Servicer 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 or surviving Person shall be an
institution (i) having a net worth of not less than $15,000,000, (ii) which is
a Fannie Mae- and Freddie Mac-approved servicer in good standing, and (iii)
which is a member in good standing of MERS.

          (b)
Limitation on Liability of the Servicer and Others.  Neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer shall be under any
liability to the Depositor, the Issuing Entity, the Indenture Trustee or the
Trust Administrator for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided,
however, that this
provision shall not protect the Servicer or any such person against any breach
of warranties or representations made herein, or failure to perform its
obligations in compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement.  The Servicer and any director, officer, employee or agent of 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 shall not be

71

under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability; provided,
however, that
the Servicer 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.  In such event, the Servicer
shall be entitled to reimbursement from the Trust Fund for the reasonable legal
expenses and costs of such action.

          (c)
Limitation on Resignation and Assignment by the Servicer.  This Agreement has been entered into with
the Servicer in reliance upon the independent status of the Servicer, and the
representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and financial
standing, and the continuance thereof.
Therefore, except as expressly provided in this Section 4.06(c), the
eighth paragraph of Section 4.08(a) and Section 4.02(a), the Servicer shall
neither assign its rights under this Agreement or the servicing hereunder (not
including the use of Sub-Servicers or Subcontractors), in each case, the prior
written consent of the Seller, the Indenture Trustee and the Trust
Administrator, which consent, in the case of an assignment of rights or
delegation of duties, shall be granted or withheld in the discretion of the
Seller, the Indenture Trustee and the Trust Administrator; provided, that in each case, there must be
delivered to the Seller, the Indenture Trustee and the Trust Administrator a
letter from each Rating Agency to the effect that such transfer of servicing or
sale or disposition of assets will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Notes.

          The
Servicer shall not resign from the obligations and duties hereby imposed on it
except by mutual consent of the Servicer and the Indenture Trustee, or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer.  Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Seller, the Indenture Trustee and the Indenture Trustee
which Opinion of Counsel shall be in form and substance reasonably acceptable
to each of them.  No such resignation
shall become effective until a successor shall have assumed the Servicer’s
responsibilities and obligations hereunder in the manner provided in Section
4.08.

          Notwithstanding
anything to the contrary which may be set forth above, the parties to this
Agreement hereby specifically (i) consent to the pledge and assignment by
the Servicer of all the Servicer’s right, title and interest in, to and under
this Agreement to the Servicing Rights Pledgee, for the benefit of certain
lenders, and (ii) provided that no Servicer Event of Default exists, agree
that upon delivery to the Trust Administrator by the Servicing Rights Pledgee
of a letter signed by the Servicer whereunder the Servicer shall resign as
Servicer under this Agreement, the Trust Administrator shall appoint the
Servicing Rights Pledgee or its designee as successor servicer, provided that
at the time of such appointment, the Servicing Rights Pledgee or such designee
has the characteristics set forth in clauses (i), (ii) and (iii) of the second
paragraph of Section 4.06(a) and agrees to be subject to the terms of this
Agreement.  The Servicing Rights Pledgee
is hereby agreed and acknowledged to be approved by the Seller, the Indenture
Trustee and the Trust Administrator as a successor servicer without the need
for further approval or the ability of any such party to refuse to grant such
approval; provided that the appointment of the Servicing Rights Pledgee
as successor Servicer may be conditioned on the receipt of a letter from each
Rating Agency to the effect that a transfer of servicing to the

72

Servicing
Rights Pledgee will not result in a qualification, withdrawal or downgrade of
the then-current rating of any of the Notes.
If, pursuant to any provision hereof, the duties of the Servicer are
transferred to a successor servicer, the entire amount of the Servicing Fee and
other compensation payable to the Servicer pursuant hereto shall thereafter be
payable to such successor servicer.

          Without
in any way limiting the generality of this Section 4.06, in the event that the
Servicer either shall assign this Agreement or the servicing responsibilities
hereunder, except to the extent permitted by and in accordance with this
Section 4.06 and Section 4.02(a), without the prior written consent of the
Seller, the Indenture Trustee and the Trust Administrator, then such parties
shall have the right to terminate this Agreement upon notice given as set forth
in Section 11.07 of the Agreement, without any payment of any penalty or
damages and without any liability whatsoever to the Servicer or any third
party.

          (d)
Successor Servicer.  The
provisions of Sections 4.06(a), (b) and (c) shall apply to any successor to
Litton as Servicer hereunder.

          Section
4.07. Termination for Cause.  

          Any
of the following occurrences shall constitute an event of default (a “Servicer
Event of Default”) on the part of the Servicer:

	
 

	
 

	
 

	
          (1)
  any failure by the Servicer to remit to the Trust Administrator any payment
  required to be made under the terms of 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, and the Swap Counterparty, by the Trust Administrator;
  or

	
 

	
 

	
 

	
          (2)
  failure by the Servicer, duly to observe or perform in any material respect
  any other of the covenants or agreements on the part of the Servicer, set
  forth in this Agreement which continues unremedied for a period of 30 days
  after the date on which written notice of such failure, requiring the same to
  be remedied, shall have been given to the Servicer and the Swap Counterparty
  by the Trust Administrator; or

	
 

	
 

	
 

	
          (3)
  failure by the Servicer to maintain its license to do business or service
  residential mortgage loans in any jurisdiction where the Mortgaged Properties
  are located except where the failure to so maintain such license does not
  have a material adverse effect on the Servicer’s ability to service the
  Mortgage Loans; or

	
 

	
 

	
 

	
          (4)
  a decree or order of a court or agency or supervisory authority having
  jurisdiction for the appointment of a conservator or receiver or liquidator
  in any insolvency, readjustment of debt, including bankruptcy, marshalling of
  assets and liabilities or similar proceedings, or for the winding-up or
  liquidation of its affairs, shall have been entered against the Servicer and
  such decree or order shall have remained in force undischarged or unstayed
  for a period of 60 days; or

73

	
 

	
 

	
 

	
          (5)
  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 the Servicer or of or
  relating to all or substantially all of its property; or

	
 

	
 

	
 

	
          (6)
  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, bankruptcy or reorganization statute, make an assignment for the
  benefit of its creditors, voluntarily suspend payment of its obligations; 

	
 

	
 

	
 

	
          (7)
  the Servicer ceases to meet the qualifications of a Fannie Mae or Freddie Mac
  lender/servicer; 

	
 

	
 

	
 

	
          (8)
  the Servicer attempts to assign the servicing of the Mortgage Loans or its
  right to servicing compensation hereunder or the Servicer attempts to assign
  this Agreement or the servicing responsibilities hereunder or to delegate its
  duties hereunder ar any portion thereof in a manner not permitted under this
  Agreement; 

	
 

	
 

	
 

	
          (9)
  if any of the rating Agencies reduces or withdraws the rating of any of the
  Notes due to a reason attributable to the Servicer; or

	
 

	
 

	
 

	
          (10)
  the net worth of the Servicer shall be less than $15,000,000.

          In
each and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatsoever rights the Indenture Trustee may have at
law or equity to damages, including injunctive relief and specific performance,
the Indenture Trustee, by notice in writing to the Servicer, and the Servicing
Rights Pledgee and the Swap Counterparty,
may terminate all the rights and obligations of the Servicer under this
Agreement and in and to the servicing contract established hereby and the
proceeds thereof.

          Upon
receipt by the Servicer, of such written termination notice, all authority and
power of the Servicer, under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in a successor
servicer appointed by the Indenture Trustee, in accordance with and subject to
Section 4.08(a).  The parties
acknowledge that notwithstanding the preceding sentence, there may be a
transition period, not to exceed 90 days, in order to effect the transfer of
servicing to a successor servicer.  The
Indenture Trustee shall be entitled to be reimbursed by the Servicer, as
applicable (or by the Trust Estate, if the Servicer is unable to fulfill its
obligations hereunder) for all reasonable costs associated with the transfer of
servicing, including, without limitation, any such 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 Indenture
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Indenture Trustee to service the Mortgage Loans
properly and effectively.  Upon written
request from the Indenture Trustee, the Servicer shall prepare, execute and
deliver to the successor servicer any and all documents and other instruments,
place in such successor’s possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of such notice of termination, including but not limited to the transfer and
endorsement or assignment of the Mortgage Loans and related

74

documents, at
the Servicer’s sole expense.  The
Servicer shall cooperate with the Indenture Trustee and such successor in
effecting the termination of the Servicer’s responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.

          By
a written notice, the Indenture Trustee with the consent of the other parties,
may waive any default by the Servicer in the performance of its obligations
hereunder and its consequences.  Upon
any waiver of a past default, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been 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.

          Section
4.08. Successor to Servicer, Miscellaneous Provisions.  

          (a)
Successor to the Servicer.
Simultaneously with the termination of the Servicer’s responsibilities
and duties under this Agreement pursuant to Sections 4.05, 4.06, or 4.07, the
Indenture Trustee shall subject to this Section 4.08(a) (i) within 90 days of
the Servicer’s notice of such termination, succeed to and assume all of the
Servicer’s responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
clauses (i), (ii) and (iii) of Section 4.06(a) and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement simultaneously with the termination of the
Servicer’s responsibilities, duties and liabilities under this Agreement.  Any successor to the Servicer (other than
the Servicing Rights Pledgee) shall be subject to the approval of the Indenture
Trustee and the Trust Administrator.
Any approval of a successor servicer by the Indenture Trustee and the
Trust Administrator, shall, if the successor servicer is not at that time a
servicer of other Mortgage Loans for the Trust, be conditioned upon the receipt
by the Seller, the Indenture Trustee and the Trust Administrator of a letter
from each Rating Agency to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the then-current rating
of any of the Notes.  In connection with
such appointment and assumption, the Indenture 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 under this
Agreement.  In the event that the
Servicer’s duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Servicer shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with
the same degree of diligence and prudence which it is obligated to exercise
under this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor.  The resignation or removal of the Servicer pursuant
to the aforementioned sections shall not become effective until a successor
shall be appointed pursuant to this Section 4.08(a) and shall in no event
relieve the Servicer of the representations and warranties made pursuant to
Sections 4.05 and the remedies available to the Trust Administrator, the
Indenture Trustee and the Seller under Sections 4.08(c), 4.05(d) and 4.05(e),
it being understood and agreed that the provisions of such Sections 4.08(c),
4.05(d) and 4.05(e) shall be applicable to the Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.  Neither the Indenture
Trustee, in its capacity as successor servicer, nor any other successor
servicer shall be

75

responsible
for the lack of information and/or documents that it cannot otherwise obtain
through reasonable efforts.

          If
the Indenture Trustee acts as a successor Servicer, it shall not assume
liability for the representations and warranties of the Servicer that it
replaces.  The Indenture Trustee shall
use reasonable efforts to have the successor Servicer assume liability for the
representations and warranties made by the terminated Servicer and in the event
of any such assumption by the successor Servicer, the Indenture Trustee may, in
the exercise of its business judgment, release the terminated Servicer from
liability for such representations and warranties.

          If
the Indenture Trustee acts as a successor Servicer, it will have no obligation
to make an Advance if it determines in its reasonable judgment that such
Advance would constitute a Nonrecoverable Advance.

          Within
a reasonable period of time, but in no event longer than 30 days of the
appointment of a successor entity, the Servicer shall prepare, execute and
deliver to the successor entity any and all documents and other instruments,
place in such successor’s possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of such notice of termination, including but not limited to the transfer of any
Mortgage Notes and the related documents.
The Servicer shall cooperate with the Indenture Trustee or the Trust
Administrator, as applicable, and such successor in effecting the termination
of the Servicer’s responsibilities and rights hereunder and the transfer of
servicing responsibilities to the successor Servicer, including without
limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.

          Any
successor appointed as provided herein shall execute, acknowledge and deliver
to the Indenture Trustee, the Servicer and the Trust Administrator an
instrument (i) accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 4.05(a) and provide for the
same remedies set forth in such Section herein and (ii) an assumption of the
due and punctual performance and observance of each covenant and condition to
be performed and observed by the Servicer under this Agreement, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like effect
as if originally named as a party to this Agreement.  Any termination or resignation of the Servicer or termination of
this Agreement pursuant to Sections 4.05, 4.06 and 4.07 shall not affect any
claims that the Seller, the Indenture Trustee or the Trust Administrator may
have against the Servicer arising out of the Servicer’s actions or failure to
act prior to any such termination or resignation.

          The
Servicer shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account and all Mortgage Loan documents and
related documents and statements held by it hereunder and the Servicer shall
account for all funds and shall execute and deliver such instruments and do
such other things as may reasonably be required to more fully and definitively
vest in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer.

76

          Upon
a successor’s acceptance of appointment as such, it shall notify the Indenture
Trustee, the Trust Administrator and the Depositor of such appointment.

          In
the event of a Servicer Event of Default, notwithstanding anything to the
contrary above, the parties hereto agree that upon delivery to the Trust
Administrator by the Servicing Rights Pledgee of a letter signed by the
Servicer within ten (10) Business Days of when notification of such Servicer
Event of Default shall have been provided by the Trust Administrator to the
Servicing Rights Pledgee, whereunder the Servicer shall resign as Servicer
under this Agreement, the Servicing Rights Pledgee or its designee shall be
appointed as successor Servicer (provided that at the time of such appointment
the Servicing Rights Pledgee or such designee (i) has the characteristics set
forth in clauses (i), (ii) and (iii) of Section 4.06(a), and (ii) agrees to be
subject to the terms of this Agreement).
The Servicing Rights Pledgee is hereby agreed and acknowledged to be approved
by the Seller, the Indenture Trustee and the Trust Administrator as a successor
servicer without the need for further approval or the ability of any such party
to refuse to grant such approval; provided that the appointment of the
Servicing Rights Pledgee as successor Servicer shall be conditioned on the
receipt of a letter from each Rating Agency to the effect that a transfer of
servicing to the Servicing Rights Pledgee will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Notes.

          (b)
Costs.  The Seller shall pay the
legal fees and expenses of its attorneys.
Costs and expenses incurred in connection with the transfer of the
servicing responsibilities, including fees for delivering Servicing Files,
shall be paid by (i) the terminated or resigning Servicer if such termination
or resignation is a result of an occurrence of a termination event under
Sections 4.05(c) or 4.07, and (ii) in all other cases by the Trust.

          Section
4.09. Miscellaneous Servicing Provisions.

          (a)
Protection of Confidential Information.
The Servicer shall keep confidential and shall not divulge to any party,
other than an affiliate of the Servicer, without the Seller’s prior written
consent, any nonpublic information pertaining to the Mortgage Loans or any
borrower thereunder, except to the extent that it is appropriate for the
Servicer to do so in working with legal counsel, subservicers, special
servicers, auditors, taxing authorities or other governmental agencies.

          (b)
For so long as the Servicer services the Mortgage Loans, it shall not take any
action or permit or cause any action to be taken by any of its agents and
Affiliates, or by any independent contractors or independent mortgage brokerage
companies on the Servicer’s behalf, to personally, by telephone or mail,
solicit the Mortgagor under any Mortgage Loan for the purpose of refinancing
such Mortgage Loan; provided, that the Servicer may solicit any Mortgagor for
whom the Servicer has received a request for verification of mortgage, a
request for demand for payoff, a mortgagor initiated written or verbal
communication indicating a desire to prepay the related Mortgage Loan, another
mortgage company has pulled a credit report on the mortgagor or the mortgagor
initiates a title search; provided further, it is understood and agreed that
promotions undertaken by the Servicer or any of its Affiliates which (i)
concern optional insurance products or other additional products or (ii) are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio,
telephone and television advertisements shall not constitute solicitation under

77

this Section,
nor is the Servicer prohibited from responding to unsolicited requests or
inquiries made by a Mortgagor or an agent of a Mortgagor. Furthermore, the
Servicer shall be permitted to include in its monthly statements to borrowers
or otherwise, statements regarding the availability of the Servicer’s
counseling services with respect to refinancing mortgage loans.

          (c)
Intention of the Parties.  It is
the intention of the Seller and Servicer that the Seller is conveying, and the
Servicer is receiving the servicing rights relating to the Mortgage Loans.  The parties hereby acknowledge that the
Trust remains the sole and absolute owner of the Mortgage Loans (other than the
servicing rights) and all rights related thereto, subject to the lien of the
Indenture.

          Section
4.10. Servicer Advance Facility.
The Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an “Advance Facility”), the
documentation for which complies with Sections 4.10(b) and (c) below, under
which (1) the Servicer assigns or pledges its rights under this Agreement to be
reimbursed for any or all Advances and/or Servicing Advances to (i) a Person,
which may be a special-purpose bankruptcy-remote entity (an “SPV”), (ii)
a Person, which may simultaneously assign or pledge such rights to an SPV or
(iii) a lender (a “Lender”), which, in the case of any Person or SPV of
the type described in either of the preceding clauses (i) or (ii), may directly
or through other assignees and/or pledgees, assign or pledge such rights to a
Person, which may include a trustee acting on behalf of holders of debt
instruments (any such Person or any such Lender, an “Advance Financing
Person”), and/or (2) an Advance Financing Person agrees to fund all the
Advances and/or Servicing Advances required to be made by the Servicer pursuant
to this Agreement.  No consent of the
Indenture Trustee, the Trust Administrator, the Depositor, the Noteholders or
any other party shall be required before the Servicer may enter into an Advance
Facility nor shall the Trust Administrator, the Depositor or the Noteholders be
a third party beneficiary of any obligation of an Advance Financing Person to
the Servicer. Notwithstanding the existence of any Advance Facility under which
an Advance Financing Person agrees to fund Advances and/or Servicing Advances,
(A) the Servicer (i) shall remain obligated pursuant to this Agreement to make
Advances and/or Servicing Advances pursuant to and as required by this
Agreement and (ii) shall not be relieved of such obligations by virtue of such
Advance Facility and (B) neither the Advance Financing Person nor any Servicer’s
Assignee (as hereinafter defined) shall have any right to proceed against or
otherwise contact any Mortgagor for the purpose of collecting any payment that
may be due with respect to any related Mortgage Loan or enforcing any covenant
of such Mortgagor under the related Mortgage Loan documents.

          (a)
If the Servicer enters into an Advance Facility, the Servicer and the related
Advance Financing Person shall deliver to the Trust Administrator at the
address set forth in Section 10.07 hereof a written notice (an “Advance
Facility Notice”), (i) stating (a) the identity of the Advance Financing
Person and (b) the identity of the officer of the Advance Financing Person (the
“Servicer’s Assignee”) that will, subject to this Section 4.10, have the
right to make withdrawals from the Custodial Account pursuant to Section 4.02
hereof to reimburse itself for any previously unreimbursed Advances and/or
Servicing Advances (“Advance Reimbursement Amounts”) and (ii) containing
the acknowledgment and agreement by such Advance Financing Person that such
Advance Financing Person shall indemnify the Trust Administrator, the Indenture
Trustee, the Trust Administrator, the Depositor and each Noteholder for any
claim, loss, liability or damage actually incurred by any such Person resulting
from the withdrawal by

78

such Advance
Financing Person of amounts from the Custodial Account in excess of the amounts
permitted to be withdrawn therefrom pursuant to Section 4.02 hereof, and that
the rights, privileges, protections and immunities contained in this Agreement
in favor of the Trust Administrator, the Indenture Trustee, the Trust
Administrator, the Depositor or any Noteholder shall be incorporated and form a
part of such Advance Facility Notice.
Advance Reimbursement Amounts (i) shall consist solely of amounts in
respect of Advances and/or Servicing Advances for which the Servicer would be
permitted to reimburse itself in accordance with Section 4.02 hereof and only
at the time, in the manner and to the extent such reimbursement would be
permitted under Section 4.02, and (ii) shall not consist of amounts payable to
a successor Servicer in accordance with Section 4.02 hereof to the extent
permitted under Section 4.10(e) below.

          (b)
Notwithstanding the existence of an Advance Facility, the Servicer, on behalf
of the Advance Financing Person and the Servicer’s Assignee, shall be entitled
to withdraw Advance Reimbursement Amounts from the Custodial Account in
reimbursement of Advances and/or Servicing Advances in accordance with Section
4.02(e) hereof, which entitlement may be terminated by the Advance Financing
Person pursuant to a written notice to the Trust Administrator delivered in the
manner set forth in Section 10.07 hereof.
Upon receipt of such written notice, the Servicer shall no longer be
entitled to withdraw Advance Reimbursement Amounts from the Custodial Account
and the Servicer’s Assignee shall thereafter have the right to withdraw from
the Custodial Account all Advance Reimbursement Amounts when and to the extent
such amounts are payable to the Servicer pursuant to the terms of Section
4.02(e) hereof.  Notwithstanding the
foregoing, and for the avoidance of doubt, (i) the Servicer and/or the Servicer’s
Assignee shall only be entitled to reimbursement of Advance Reimbursement
Amounts hereunder from withdrawals from the Custodial Account pursuant to
Section 4.02(e) of this Agreement and shall not otherwise be entitled to make
withdrawals of, or receive, Advance Reimbursement Amounts that shall be
deposited in the Collection Account pursuant to Section 5.07 hereof, and (ii)
none of the Trust Administrator or the Noteholders shall have any right to, or
otherwise be entitled to, receive any Advance Reimbursement Amounts to which
the Servicer or Servicer’s Assignee, as applicable, shall be entitled pursuant
to Section 4.02(e) hereof or pursuant to this Section 4.10.  Without limiting the foregoing, none of the
Trust Administrator or the Noteholders shall have any right to set off against
Advance Reimbursement Amounts hereunder.
An Advance Facility may be terminated by the joint written direction of
the Servicer and the related Advance Financing Person.  Written notice of such termination shall be
delivered to the Trust Administrator in the manner set forth in Section 10.07
hereof.  None of the Depositor or the
Trust Administrator shall, as a result of the existence of any Advance
Facility, have any additional duty or liability with respect to the calculation
or payment of any Advance Reimbursement Amount, nor, as a result of the
existence of any Advance Facility, shall the Depositor or the Trust
Administrator have any additional responsibility to track or monitor the
administration of the Advance Facility or the payment of Advance Reimbursement
Amounts to the Servicer’s Assignee.  The
Servicer shall indemnify the Depositor, the Trust Administrator, the Indenture
Trustee, the Trust Administrator, any successor Servicer and the Trust Fund for
any claim, loss, liability or damage resulting from any claim by the related
Advance Financing Person, except to the extent that such claim, loss, liability
or damage resulted from or arose out of negligence, recklessness or willful
misconduct on the part of the Depositor, the Indenture Trustee, the Trust
Administrator, the Trust Administrator or any successor Servicer, as the case
may be, or failure by the successor Servicer or the Trust Administrator, as the
case may be, to

79

remit funds as
required by this Agreement.  The Trust
Administrator shall have no duty or liability with respect to the calculation
of any Advance Reimbursement Amount and shall be entitled to rely without
independent investigation on the Advance Facility Notice and on such Servicer’s
report of the amount of Advance Reimbursement Amounts and Servicing Advance
Reimbursement Amounts that were included in the remittance from such Servicer
to the Trust Administrator pursuant to Section 4.03.  The Servicer shall maintain and provide to any successor Servicer
and, upon request, the Trust Administrator a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any Advance Financing 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.

          (c)
An Advance Financing Person who receives an assignment or pledge of rights to
receive Advance Reimbursement Amounts and/or whose obligations are limited to
the funding of Advances and/or Servicing Advances pursuant to an Advance
Facility shall not be required to meet the criteria for qualification as a
Sub-Servicer.

          (d)
As between a predecessor Servicer and its Advance Financing Person, on the one
hand, and a successor Servicer and its Advance Financing Person, if any, on the
other hand, Advance Reimbursement Amounts on a loan-by-loan basis with respect
to each Mortgage Loan as to which an Advance and/or Servicing Advance shall
have been made and be outstanding shall be allocated on a “first-in, first out”
basis. In the event the Servicer’s Assignee shall have received some or all of
an Advance Reimbursement Amount related to Advances and/or Servicing Advances
that were made by a Person other than such predecessor Servicer or its related
Advance Financing Person in error, then such Servicer’s Assignee shall be
required to remit any portion of such Advance Reimbursement Amount to each
Person entitled to such portion of such Advance Reimbursement Amount.  Without limiting the generality of the
foregoing, the Servicer shall remain entitled to be reimbursed by the Advance
Financing Person for all Advances or Servicing Advances funded by the Servicer
to the extent the related Advance Reimbursement Amounts have not been assigned
or pledged to such Advance Financing Person or Servicer’s Assignee.

          (e)
For purposes of any Officer’s Certificate of the Servicer delivered in
connection with a Nonrecoverable Advance, any Nonrecoverable Advance referred
to therein may have been made by such Servicer or any predecessor Servicer. In
making its determination that any Advance or Servicing Advance theretofore made
has become a Nonrecoverable Advance, the Servicer shall apply the same criteria
in making such determination regardless of whether such Advance or Servicing
Advance shall have been made by the Servicer or any predecessor Servicer.

          (f)
Any amendment to this Section 4.10 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 4.10, including amendments to add
provisions relating to a successor Servicer, may be entered into by the parties
hereto without the consent of any Noteholder, provided such amendment complies
with Section 10.03 hereof.  All
reasonable costs and expenses (including attorneys’ fees) of each party hereto
of any such amendment shall be borne solely by the Servicer.  The parties hereto hereby acknowledge and
agree that:  (a) the Advances

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and/or
Servicing Advances financed by and/or pledged to an Advance Financing Person
under any Advance Facility are obligations owed to the Servicer 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 Trust Administrator, the Indenture Trustee, the Trust
Administrator, the Depositor and the Trust are not, as a result of the
existence of any Advance Facility, obligated or liable to repay any Advances
and/or Servicing Advances financed by the Advance Financing Person; (b) the
Servicer will be responsible for remitting to the Advance Financing Person the
applicable amounts collected by it as reimbursement for Advances and/or
Servicing Advances funded by the Advance Financing Person, subject to the
provisions of this Agreement; and (c) the Trust Administrator shall not have
any responsibility to track or monitor the administration of the financing
arrangement between the Servicer and any Advance Financing Person.

          (g)
Upon any breach by the Advance Financing Person under any Advance Facility
Notice delivered pursuant to this Section 4.10 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
Advance Financing Person by the Depositor or the Trust Administrator (in which
case notice shall be provided by telecopy), or to the Advance Financing Person,
the Depositor and the Trust Administrator by the Holders of Certificates
entitled to at least 25% of the Voting Rights, the Advance Financing Person may
be terminated in the same manner as the Servicer as set forth in Section 4.07
hereof.

          Section
4.11. Sub-Servicing Agreements Between the Servicer and Sub-Servicers.

          (a)
The Servicer may enter into Sub-Servicing Agreements (provided that such
agreements would not result in a withdrawal or a downgrading by the Rating
Agencies of the rating on any Class of Notes) with Sub-Servicers, for the
servicing and administration of the Mortgage Loans; provided, however,
such sub-servicing arrangement and the terms of the related Sub-Servicing
Agreement must provide for the servicing of Mortgage Loans in a manner
consistent with the servicing arrangement contemplated hereunder; provided,
further, notwithstanding any Sub-Servicing Agreement, the Servicer
shall remain obligated and liable to the Trust for the servicing of the
Mortgage Loans pursuant to the terms of this Agreement without diminution of
such obligation or liability because of any Sub-Servicing Agreement.

          (b)
Each Sub-Servicer shall be (i) authorized to transact business in the state or
states in which 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 confirming to the provisions set forth in
Sections 4.04, 4.07, 8.01, 8.02, 8.03 and 8.07 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.  The Servicer and the Sub-Servicers may enter
into and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing Agreements; provided,
however, that any such amendments
or different forms shall be consistent with and not violate the provisions of
this Agreement, and that no such amendment or different form shall be made or

81

entered into
which could be reasonably expected to be materially adverse to the interests of
the Noteholders, without the consent of the Holders of Notes entitled to at
least 66% of the Voting Interests.  Any
variation without the consent of the Holders of Notes entitled to at least 66%
of the Voting Interests from the provisions set forth in Section 4.13 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 Indenture
Trustee and the Trust Administrator copies of all Sub-Servicing Agreements, and
any amendments or modifications thereof, promptly upon the Servicer’s execution
and delivery of such instruments.

          (c)
As part of its servicing activities hereunder, the Servicer (except as
otherwise provided in the last sentence of this paragraph), for the benefit of
the Indenture Trustee and the Noteholders, shall enforce the obligations of
each Sub-Servicer under the related Sub-Servicing Agreement, including, without
limitation, any obligation to make advances 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
4.12. Successor Sub-Servicers.

          The
Servicer 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 4.11

          Any
Sub-Servicing Agreement shall include the provision that such agreement may be
immediately terminated by the Servicer without fee, in accordance with the
terms of this Agreement, in the event that the Servicer shall, for any reason,
no longer be the Servicer (including termination due to a Servicer Event of
Default).

          Section
4.13. 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 Sub-Servicing Account, in no event

82

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.  The Sub-Servicer shall thereafter 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.

ARTICLE V

ADMINISTRATION
OF THE AGREEMENTS BY THE INDENTURE TRUSTEE AND TRUST ADMINISTRATOR

          Section
5.01. Duties of the Indenture Trustee; Representations and Warranties.  

          (a)
For and on behalf of the Issuing Entity, the Swap Counterparty, the Indenture
Trustee and the Noteholders, the Indenture Trustee shall perform its
obligations from and after the Closing Date in accordance with the provisions
of this Article V.  The Indenture
Trustee hereby represents and warrants to the Depositor, the Issuing Entity,
the Swap Counterparty, the Trust Administrator and the Servicer, as of the
Closing Date, that:

                    
(i) it is validly existing and in good standing as a federally chartered
national banking association and as Indenture Trustee has full power and
authority to transact any and all business contemplated by this Agreement and
to execute, deliver and comply with its obligations under the terms of this
Agreement, the execution, delivery and performance of which have been duly authorized
by all necessary corporate action on the part of the Indenture Trustee;

                    (ii)
the execution and delivery of this Agreement by the Indenture Trustee and its
performance and compliance with the terms of this Agreement will not (A)
violate the Indenture Trustee’s charter or bylaws, (B) violate any law or
regulation or any administrative decree or order to which it is subject or (C)
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
contract, agreement or other instrument to which the Indenture Trustee is a
party or by which it is bound or to which any of its assets are subject, which
violation, default or breach would materially and adversely affect the
Indenture Trustee’s ability to perform its obligations under this Agreement;

                    (iii)
this Agreement constitutes, assuming due authorization, execution and delivery
hereof by the other respective parties hereto, a legal, valid and binding
obligation of the Indenture Trustee, enforceable against it in accordance with
the terms hereof, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors’ rights in general, and by general equity principles (regardless
of whether such enforcement is considered in a proceeding in equity or at law);

                    (iv)
the Indenture Trustee is not in default with respect to any order or decree of
any court or any order or regulation of any federal, state, municipal or
governmental agency to the extent that any such default would materially and
adversely affect its performance hereunder;

83

                    (v)
the Indenture Trustee is not a party to or bound by any agreement or instrument
or subject to any charter provision, bylaw or any other corporate restriction
or any judgment, order, writ, injunction, decree, law or regulation that may
materially and adversely affect its ability as Indenture Trustee to perform its
obligations under this Agreement or that requires the consent of any third
person to the execution of this Agreement or the performance by the Indenture
Trustee of its obligations under this Agreement;

                    (vi)
no litigation is pending or, to the best of the Indenture Trustee’s knowledge,
threatened against the Indenture Trustee which would prohibit its entering into
this Agreement or performing its obligations under this Agreement;

                    (vii)
the Indenture Trustee, or an affiliate thereof the primary business of which is
the servicing of conventional residential mortgage loans, is a Fannie Mae- or
FHLMC-approved seller/servicer;

                    (viii)
no consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the
Indenture Trustee of or compliance by the Indenture Trustee with this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations and orders (if any) as have been
obtained;

                    (ix)
the consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Indenture Trustee;

                    (x)
[reserved].

                    (xi)
the information about the Indenture Trustee under the heading “The Trust
Administrator, Indenture Trustee and Custodian” in the Offering Documents
relating to the Indenture Trustee does not include an untrue statement of a
material fact and does not omit to state a material fact, with respect to the
statements made, necessary in order to make the statements in light of the
circumstances under which they were made not misleading.

          (b)
It is understood and agreed that the representations and warranties set forth
in this Section 5.01 shall survive the execution and delivery of this
Agreement.  The Indenture Trustee shall
indemnify the Depositor, the Issuing Entity, the Owner Trustee, and the
Servicer and hold them harmless against any loss, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Indenture Trustee’s
representations and warranties contained in this Section 5.01.  It
is understood and agreed that the enforcement of the obligation of the
Indenture Trustee set forth in this Section to indemnify the foregoing parties
as provided in this Section constitutes the sole remedy of such parties
respecting a breach of the foregoing representations and warranties.  Such indemnification shall survive any
termination of the Indenture Trustee as Indenture Trustee hereunder, and any
termination of this Agreement.

          Any
cause of action against the Indenture Trustee relating to or arising out of the
breach of any representations and warranties made in this Section shall accrue
upon discovery of such breach by the Depositor, the Issuing Entity, the
Indenture Trustee, or the Servicer or notice

84

thereof by any
one of such parties to the other parties.
Notwithstanding anything in this Agreement to the contrary, the
Indenture Trustee shall not be liable for special, indirect or consequential
losses or damages of any kind whatsoever (including, but not limited to, lost
profits).

          Section
5.02. [Reserved.]  

          Section
5.03. [Reserved.]

          Section
5.04. [Reserved.] 

          Section
5.05. [Reserved.]

          Section
5.06. [Reserved.] 

          Section
5.07. Collection Account.  

          (a)
On the Closing Date, the Trust Administrator shall open and shall thereafter
maintain a segregated account held in trust in the name of the Securities Intermediary
(the “Collection Account”), entitled “Collection Account, Wells Fargo Bank,
N.A., as Indenture Trustee, in trust for Holders of the Fieldstone Mortgage
Investment Trust, Series 2007-1, Mortgage-Backed Notes.”  The Collection Account shall relate solely
to the Notes issued by the Issuing Entity, and funds deposited in the
Collection Account shall not be commingled with any other monies.

          (b)
The Collection Account shall be an Eligible Account.  If an existing Collection Account ceases to be an Eligible
Account, the Trust Administrator shall establish a new Collection Account that
is an Eligible Account within 10 days and transfer all funds and investment
property on deposit in such existing Collection Account into such new
Collection Account.

          (c)
The Trust Administrator shall give to the Indenture Trustee prior written
notice of the name and address of the depository institution at which the
Collection Account is maintained and the account number of such Collection
Account.  The Trust Administrator shall
take such actions as are necessary to cause the depository institution holding
the Collection Account to hold such account in the name of the Indenture
Trustee.  On each Payment Date, the
entire amount on deposit in the Collection Account relating to the Mortgage
Loans (subject to permitted withdrawals set forth in Section 5.08), other than
amounts not included in Interest Funds or Principal Funds to be paid to
Noteholders for such Payment Date, shall be applied to make the requested payment
of principal and/or interest on each Class of Notes.

          (d)
The Trust Administrator shall deposit or cause to be deposited into the
Collection Account, no later than the Business Day following the Closing Date,
any amounts received with respect to the Mortgage Loans representing Scheduled
Payments on the Mortgage Loans due after the Cut-off Date and unscheduled
payments received on or after the Cut-off Date and on or before the Closing
Date.  Thereafter, the Trust
Administrator shall deposit or cause to be deposited in the Collection Account
on the earlier of the applicable Payment Date and one Business Day following
receipt thereof, the following amounts received or payments made by

85

the Trust
Administrator (other than in respect of principal of and interest on the
Mortgage Loans due on or before the Cut-off Date):

                    (i)
all remittances from the Custodial Account to the Trust Administrator pursuant
to Section 4.03;

                    (ii)
all Advances made by the Servicer pursuant to Section 6.05 hereof;

                    (iii)
the Purchase Price of any Mortgage Loan repurchased by the Depositor or the
Seller during the related Prepayment Period or any other Person and any
Substitution Amount related to any Qualifying Substitute Mortgage Loan; and

                    (iv)
any Net Swap Receipts or any swap breakage costs (as reported to the Trust
Administrator by the Swap Counterparty) received by the Trust Administrator.

          (e)
Funds in the Collection Account may be invested by the Trust Administrator for
the benefit of and at the written direction of the Servicer (except during the
Trust Administrator Float Period) in Eligible Investments.  In the absence of such written direction by
the Servicer, the Trust Administrator shall invest in the Wells Fargo Advantage
Prime Investment Money Market Fund.
During the Trust Administrator Float Period, funds in the Collection
Account may be invested in Eligible Investments selected by and at the written
direction of the Trust Administrator, which shall mature not later than one
Business Day prior to the next Payment Date (or on the Payment Date with
respect to any Eligible Investment of the Trust Administrator or any other fund
managed or advised by it or any Affiliate) and any such Eligible Investment
shall not be sold or disposed of prior to its maturity.  All such Eligible Investments shall be made
in the name of the Trust Administrator in trust for the benefit of the
Indenture Trustee and the Noteholders and the Swap Counterparty.  All income and gain realized from any
Eligible Investment shall be for the benefit of the Trust Administrator during
the Trust Administrator Float Period, and for the benefit of the Servicer at
all other times, and shall be subject to withdrawal or order from time to time,
subject to Section 5.08 and Section 4.02(e), as applicable, and shall not be
part of the Trust Estate.  The amount of
any losses incurred in respect of any such investments (other than losses
occurring during the Trust Administrator Float Period) shall be deposited in
such Collection Account by the Servicer and any losses incurred in respect of
any such investments during the Trust Administrator Float Period shall be
deposited in such Collection Account by the Trust Administrator out of its own
funds, in each case without any right of reimbursement therefor and immediately
as realized.  The foregoing requirements
for deposit in the Collection Account are exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments of interest
on funds in the Collection Account and payments in the nature of late payment
charges, assumption fees and other incidental fees and charges relating to the
Mortgage Loans need not be deposited by the Trust Administrator or the Servicer
in the Collection Account and may be retained by the Trust Administrator or the
Servicer, as applicable, as additional servicing compensation.  If the Trust Administrator deposits in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from such Collection Account.

86

          Section
5.08. Application of Funds in the Collection Account.  The Trust Administrator may, from time to
time, make, or cause to be made, withdrawals from the Collection Account for
the following purposes:

                    (i)
to reimburse the Servicer for any previously unreimbursed Advances and
Servicing Advances made by the Servicer, such right to reimbursement pursuant
to this subclause (i) being limited to amounts received on or in respect of a
particular Mortgage Loan (including, for this purpose, Liquidation Proceeds and
amounts representing Insurance Proceeds with respect to the property subject to
the related Mortgage);

                    (ii)
[Reserved];

                    (iii)
to reimburse the Servicer from Liquidation Proceeds for Liquidation Expenses
and for amounts expended by it pursuant to Section 4.02(o) in good faith in
connection with the restoration of damaged property and, to the extent that
Liquidation Proceeds after such reimbursement exceed the unpaid principal
balance of the related Mortgage Loan, together with accrued and unpaid interest
thereon at the applicable Mortgage Rate less the applicable Servicing
Administration Fee Rate and Trust Administration Fee Rate for such Mortgage
Loan to the Due Date next succeeding the date of its receipt of such
Liquidation Proceeds, to pay to the Trust Administrator or the Servicer out of
such excess the amount of any unpaid assumption fees, late payment charges or
other Mortgagor charges on the related Mortgage Loan and to retain any excess
remaining thereafter as additional servicing compensation, it being understood,
in the case of any such reimbursement or payment, that such Trust Administrator’s
or Servicer’s right thereto shall be prior to the rights of the Noteholders;

                    (iv)
to pay to the Depositor or the Seller or any other Person, as applicable, with
respect to each Mortgage Loan or REO Property acquired in respect thereof that
has been purchased pursuant to this Agreement, all amounts received thereon and
not paid on the date on which the related repurchase was effected and to pay to
the applicable party any Servicing Advances to the extent specified in the
definition of Purchase Price;

                    (v)
to the extent not paid by the Servicer, to pay any Insurance Premium with
respect to a Mortgage Loan;

                    (vi)
to pay to the Trust Administrator income earned on the investment of funds on
deposit in the Collection Account;

                    (vii)
on each Payment Date, to make payment to the Noteholders in the amounts and in
the manner provided for in Section 6.02 for the related Payment Date (to the
extent such funds have been remitted by the Servicer);

                    (viii)
on each Payment Date,  to the extent not
previously collected and retained by the Servicer, to make payment to the
Ownership Certificate Holder, all Prepayment Premiums received during the
immediately preceding Prepayment Period;

                    (ix)
to make payment to itself, the Servicer, the Indenture Trustee, the Custodian,
the Owner Trustee and others pursuant to any provision of this Agreement, the
Trust Agreement, the Indenture or the Custodial Agreement;

87

                    (x)
to withdraw funds deposited in error in the Collection Account;

                    (xi)
to clear and terminate the Collection Account pursuant to Article IX;

                    (xii)
to reimburse a successor Trust Administrator (solely in its capacity as
successor Trust Administrator), for any fee or advance occasioned by a
termination of the Trust Administrator, and the assumption of such duties by a
successor Trust Administrator, in each case to the extent not reimbursed by the
terminated Trust Administrator, it being understood, in the case of any such
reimbursement or payment, that the right of the Trust Administrator thereto
shall be prior to the rights of the Noteholders;

                    (xiii)
to pay the Swap Counterparty any Net Swap Payments and any swap termination
payments (as reported to the Trust Administrator by the Swap Counterparty) two
Business Days prior to each applicable Payment Date; 

                    (xiv)
to make payment to the Owner Trustee, the Owner Trustee Fee for such Payment
Date, if any; and

                    (xv)
to make payment to the holder of the Ownership Certificate, of all Prepayment
Premiums received during the immediately preceding Prepayment Period.

          In
connection with withdrawals pursuant to subclauses (i), (ii), (iii) and (iv)
above, the Trust Administrator’s or the Servicer’s or such other Person’s
entitlement thereto is limited to collections or other recoveries on the
related Mortgage Loan.  The Trust
Administrator shall therefore keep and maintain a separate accounting for each
Mortgage Loan for the purpose of justifying any withdrawal from the Collection
Account it maintains pursuant to such subclauses.

          Section
5.09. Reports to Indenture Trustee and Noteholders.  

          (a)
On each Payment Date, the Trust Administrator shall make available to the
Indenture Trustee and each Noteholder and the Swap Counterparty, a report
setting forth the following information (on the basis of Mortgage Loan level
information obtained from the Servicer and information provided by the Swap
Counterparty):

                    (i)
the aggregate amount of the payment to be made on such Payment Date to the
Holders of each Class of Notes, to the extent applicable, allocable to
principal on the Mortgage Loans, including Liquidation Proceeds and Insurance
Proceeds;

                    (ii)
the aggregate amount of the payment to be made on such Payment Date to the
Holders of each Class of Notes allocable to interest and the calculation
thereof;

                    (iii)
the amount, if any, of any payment to the Holder of the Ownership Certificate;

                    (iv)
if provided by the Servicer, (A) the aggregrate amount of any Advances required
to be made by or on behalf of the Servicer with respect to such Payment Date,
(B) the aggregate amount of such Advances actually made, and (C) the amount, if
any, by which (A) above exceeds (B) above;

88

                    (v)
the total number of Mortgage Loans, the aggregate Stated Principal Balance of all
the Mortgage Loans as of the close of business on the last day of the related
Due Period, after giving effect to payments allocated to principal reported
under clause (i) above;

                    (vi)
the Class Principal Amount of each Class of Notes, to the extent applicable, as
of such Payment Date after giving effect to payments allocated to principal
reported under clause (i) above;

                    (vii)
the amount of all Prepayment Premiums paid to the Ownership Certificate;

                    (viii)
the amount of any Realized Losses incurred with respect to the Mortgage Loans
(x) in the applicable Prepayment Period and (y) in the aggregate since the
Cut-off Date;

                    (ix)
the amount of the Owner Trustee Fee, Trust Administration Fee and Servicing
Administration Fee paid during the Due Period to which such payment relates;

                    (x)
the number and aggregate Stated Principal Balance of Mortgage Loans (excluding
any Liquidated Mortgage Loans), as reported to the Trust Administrator by the
Servicer, (a) remaining outstanding, (b) delinquent 30 to 59 days on a contractual basis, (c)
delinquent 60 to 89 days on a contractual basis, (d) delinquent 90 or more days
on a contractual basis, (e) as to which foreclosure proceedings have been
commenced as of the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Payment Date occurs, (f) in
bankruptcy and (g) that are REO Properties.
All delinquency reporting shall be calculated using the OTS convention;

                    (xi)
the number and aggregate Stated Principal Balance as of the related
Determination Date of any Mortgage Loans with respect to which the related
Mortgaged Property became an REO Property as of the close of business on the
last Business Day of the calendar month immediately preceding the month in
which such Payment Date occurs;

                    (xii)
with respect to substitution of Mortgage Loans in the preceding calendar month,
the Stated Principal Balance of each Deleted Mortgage Loan and of each
Qualifying Substitute Mortgage Loan;

                    (xiii)
whether a Trigger Event has occurred;

                    (xiv)
the Interest Rate applicable to such Payment Date with respect to each Class of
Notes;

                    (xv)
the Interest Funds and the Principal Funds applicable to such Payment Date;

                    (xvi)
if applicable, the amount of any shortfall (i.e., the difference between the
aggregate amounts of principal and interest which Noteholders would have
received if there were sufficient available amounts in the Collection Account
and the amounts actually paid);

                    (xvii)
the amount of any Overcollateralization Deficiency after giving effect to the
payments made on such Payment Date;

89

                    (xviii)
LIBOR with respect to such Payment Date;

                    (xix)
the Available Funds Shortfall of each Class of Notes, if any; 

                    (xx)
to the extent such information is provided to the Trust Administrator by the
Servicer, the number of Mortgage Loans with respect to which (a) a reduction in
the Mortgage Rate has occurred or (b) the related Mortgagor’s obligation to
repay interest on a monthly basis has been suspended or reduced pursuant to the
Civil Relief Act or the California Military and Veterans Code, as amended, the
amount of interest not required to be paid with respect to any such Mortgage
Loans during the related Due Period as a result of such reductions; and

                    (xxi)
the amount of any Net Swap Payments, Net Swap Receipts or swap termination
amounts received or paid in respect of the Swap Agreement.

          In
the case of information furnished pursuant to subclauses (i), (ii) and (vi)
above, the amounts shall (except in the case of the report delivered to the
holder of the Ownership Certificate) be expressed as a dollar amount per $1,000
of original principal amount of Notes.

          The
Trust Administrator will make such report and additional loan level information
(and, at its option, any additional files containing the same information in an
alternative format) available each month to the Rating Agencies and to
Noteholders that provide appropriate certification in the form furnished by the
Trust Administrator (which may be submitted electronically via the Trust
Administrator’s internet website).  The
Trust Administrator’s website can be accessed at www.ctslink.com.  Assistance in using the website
can be obtained by calling the Trust Administrator’s customer service desk at
(301) 815-6600.  Such parties that are
unable to use the website are entitled to have a paper copy mailed to them via
first class mail by calling the Trust Administrator’s customer service desk and
indicating such.  The Trust
Administrator shall have the right to change the way such statements are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Trust Administrator shall provide
timely and adequate notification to all above parties regarding any such
changes.

          All
information, reports and statements, including the foregoing information and
reports shall be prepared and determined by the Trust Administrator based
solely on Mortgage Loan data provided to the Trust Administrator by the
Servicer pursuant to Section 4.03(b).
In preparing or furnishing the foregoing information, the Trust
Administrator shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Property
that has been provided to the Trust Administrator by the Servicer, and the Trust
Administrator shall not be obligated to verify, recompute, reconcile or
recalculate any such information or data.
The Trust Administrator shall be entitled to conclusively rely on the
Mortgage Loan data provided to the Trust Administrator and shall have no
liability for any errors in such Mortgage Loan data.

          (b)
Upon the reasonable advance written request of any Noteholder that is a savings
and loan, bank or insurance company, which request, if received by the
Indenture Trustee in a form sufficient to cause the Indenture Trustee to
identify it as a request made pursuant to this

90

Section
5.09(b) shall be forwarded promptly to the Trust Administrator, the Trust
Administrator shall provide, or cause to be provided (or, to the extent that
such information or documentation is not required to be provided by the
Servicer, shall use reasonable efforts to obtain such information and
documentation from the Servicer, and provide), to such Noteholder such reports
and access to information and documentation regarding the Mortgage Loans as
such Noteholder may reasonably deem necessary to comply with applicable
regulations of the Office of Thrift Supervision or its successor or other
regulatory authorities with respect to an investment in the Notes; provided,
however, that the Trust Administrator shall be entitled to be
reimbursed by such Noteholder for actual expenses incurred in providing such
reports and access.

          (c)
Within 90 days, or such shorter period as may be required by statute or
regulation, after the end of each calendar year, the Trust Administrator shall
have prepared and shall make available to each Person who at any time during
the calendar year was a Noteholder of record, and make available to Security
Owners (identified as such by the Clearing Agency) in accordance with
applicable regulations, a report summarizing the items provided to the
Noteholders pursuant to Section 5.09(a)on an annual basis as may be required to enable such Holders to prepare
their federal income tax returns; provided, however, that this Section
5.09(c) shall not be applicable where relevant reports or summaries are
required elsewhere in this Agreement.
Such information shall include the amount of original issue discount
accrued on each Class of Notes and information regarding the expenses of the
Issuing Entity.  The Trust Administrator
shall be deemed to have satisfied such requirement if it forwards such
information in any other format permitted by the Code.  The Servicer shall provide the Trust
Administrator with such information requested by the Trust Administrator and
available to the Servicer (in a format mutually agreed upon by the Servicer and
Trust Administrator) as is necessary for the Trust Administrator to prepare
such reports.  

          (d)
The Trust Administrator shall furnish any other information that is required by
the Code and regulations thereunder to be made available to Noteholders to the
extent such information is provided to the Trust Administrator.  The Servicer shall provide the Trust
Administrator with such information requested by the Trust Administrator and
available to the Servicer (in a format mutually agreed upon by the Servicer and
Trust Administrator) as is necessary for the Trust Administrator to prepare
such reports (and the Trust Administrator may rely solely upon such
information).

          Section
5.10. [Reserved.]  

          Section
5.11. Indenture Trustee Liable for Enforcement.  The Indenture Trustee shall use commercially
reasonable efforts to ensure that the Mortgage Loans are serviced in accordance
with the provisions of this Agreement and shall use commercially reasonable
efforts to enforce the provisions of Article IV for the benefit of the
Noteholders and the Swap Counterparty.
The Indenture Trustee shall be entitled to enter into any agreement with
any Servicer for indemnification of the Indenture Trustee and nothing contained
in this Agreement shall be deemed to limit or modify such indemnification.  Except as expressly set forth herein, the
Indenture Trustee shall have no liability for the acts or omissions of the
Servicer in the performance by the Servicer of its obligations under Article
IV.

          Section
5.12. [Reserved.]

91

          Section
5.13. [Reserved.]  

          Section
5.14. Release of Mortgage Files.

          (a)
Upon (i) becoming aware of the payment in full of any Mortgage Loan or (ii) the
receipt by the Servicer of a notification that payment in full has been or will
be escrowed in a manner customary for such purposes, the Servicer will promptly
notify the Indenture Trustee (or the Custodian) by a certification (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Collection Account maintained by the Trust Administrator pursuant to Section
5.07 have been or will be so deposited) of a Servicing Officer and shall
request (on the form substantially in the form attached to the Custodial
Agreement) the Indenture Trustee or the Custodian, to deliver to the Servicer
the related Mortgage File.  Upon receipt
of such certification and request, the Indenture Trustee or the Custodian (with
the consent, and at the direction of the Indenture Trustee), shall promptly
release the related Mortgage File to the Servicer and the Indenture Trustee
shall have no further responsibility with regard to such Mortgage File.  Upon any such payment in full, the Servicer
is authorized, to give, as agent for the Indenture 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 Collection Account.

          (b)
From time to time and as appropriate for the servicing or foreclosure of any
Mortgage Loan, the Indenture Trustee shall execute such documents as shall be
prepared and furnished to the Indenture Trustee by the Servicer (in form
reasonably acceptable to the Indenture Trustee) and as are necessary to the
prosecution of any such proceedings.
The Indenture Trustee or the Custodian, shall, upon request of the
Servicer and delivery to the Indenture Trustee or the Custodian, of a trust
receipt signed by a Servicing Officer substantially in the form attached to the
Custodial Agreement, release the related Mortgage File held in its possession
or control to the Servicer.  Such trust
receipt shall obligate the Servicer to return the Mortgage File to the
Indenture Trustee or the Custodian, as applicable, when the need therefor by
the 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 trust receipt shall be released by the
Indenture Trustee or the Custodian, as applicable, to the Servicer.

          Section
5.15. Documents, Records and Funds in Possession of Trust Administrator To
Be Held for Indenture Trustee.  

          (a)
The Servicer shall transmit to the Indenture Trustee such documents and
instruments coming into the possession of the Servicer from time to time as are
required by the terms hereof to be delivered to the Indenture Trustee or the
Custodian.  Any funds received by the
Servicer in respect of any Mortgage Loan or which otherwise are collected by
the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Indenture Trustee and the
Noteholders and the Swap Counterparty subject to the right of the Servicer to
retain its Servicing Administration Fee and to reimburse itself for

92

amounts as
provided herein.  The Servicer shall
provide access to information and documentation regarding the Mortgage Loans to
the Indenture Trustee, its agents and accountants at any time upon reasonable
request and during normal business hours, and to Noteholders 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 Servicer designated by it.  In fulfilling such a request the 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
Trust Administrator or the 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 Trust Administrator or by
the Servicer for and on behalf of the Indenture Trustee as the Indenture
Trustee’s agent and bailee for purposes of perfecting the Indenture Trustee’s
security interest therein as provided by relevant Uniform Commercial Code or
laws; provided,
however, that the Trust Administrator and the Servicer shall be
entitled to setoff against, and deduct from, any such funds any amounts that
are properly due and payable to the Trust Administrator or the Servicer under
this Agreement and shall be authorized to remit such funds to the Trust
Administrator or the Indenture Trustee in accordance with this Agreement.

          (c)
The Servicer and Trust Administrator hereby acknowledges that concurrently with
the execution of this Agreement, the Indenture Trustee shall own or, to the
extent that a court of competent jurisdiction shall deem the conveyance of the
Mortgage Loans from the Seller to the Depositor not to constitute a sale, the
Indenture Trustee shall have a security interest in the Mortgage Loans and in
all Mortgage Files representing such Mortgage Loans and in all funds and
investment property now or hereafter held by, or under the control of, the
Servicer or the Trust Administrator that are collected by the Servicer or the
Trust Administrator in connection with the Mortgage Loans, whether as scheduled
installments of principal and interest or as full or partial prepayments of
principal or interest or as Liquidation Proceeds or Insurance Proceeds or
otherwise, and in all proceeds of the foregoing and proceeds of proceeds (but
excluding any fee or other amounts to which the Servicer or the Trust
Administrator is entitled to hereunder); and the Trust Administrator agrees
that so long as the Mortgage Loans are assigned to and held by the Indenture
Trustee or the Custodian, all documents or instruments constituting part of the
Mortgage Files, and such funds relating to the Mortgage Loans which come into
the possession or custody of, or which are subject to the control of, the Trust
Administrator or the Servicer shall be held by the Trust Administrator or the
Servicer for and on behalf of the Indenture Trustee as the Indenture Trustee’s
agent and bailee for purposes of perfecting the Indenture Trustee’s security
interest therein as provided by the applicable Uniform Commercial Code or other
applicable laws.

          (d)
The Trust Administrator agrees that it shall not, and shall not authorize the
Servicer to, create, incur or subject any Mortgage Loans, or any funds that are
deposited in any Custodial Account, Escrow Account or the Collection Account, or
any funds that otherwise are

93

or may become
due or payable to the Indenture Trustee, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, nor assert by legal
action or otherwise any claim or right of setoff against any Mortgage Loan or
any funds collected on, or in connection with, a Mortgage Loan.

          Section
5.16. Opinion.  On or before the
Closing Date, the Trust Administrator shall cause to be delivered to the
Depositor, the Seller, the Initial Purchaser, and the Servicer one or more
Opinions of Counsel, dated the Closing Date, in form and substance reasonably
satisfactory to the Depositor and a representative of the Initial Purchaser, as
to the due authorization, execution and delivery of this Agreement by the Trust
Administrator and the enforceability thereof.

          Section
5.17. [Reserved].  

          Section
5.18. [Reserved].  

          Section
5.19. [Reserved].  

          Section
5.20. Indenture Trustee To Retain Possession of Certain Insurance Policies
and Documents.  The Indenture
Trustee (or the Custodian on behalf of the Indenture Trustee) shall retain
possession and custody of the originals of the primary mortgage insurance
policies or certificate of insurance if applicable and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement.  Until all amounts
payable in respect of the Notes have been paid in full and the Servicer and
Trust Administrator otherwise have fulfilled its obligations under this
Agreement, the Indenture Trustee (or the Custodian) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement.
The Servicer shall promptly deliver to the Indenture Trustee (or the
Custodian), upon the execution or receipt thereof the originals of the primary
mortgage insurance policies and any certificates of renewal thereof, and such
other documents or instruments that constitute portions of the Mortgage File
that come into the possession of the Servicer from time to time.

          Section
5.21. Compensation to the Trust Administrator.  As compensation for its services hereunder, the Trust
Administrator shall be entitled to retain all income and gain realized from any
investment of funds in the Collection Account during the Trust Administrator
Float Period pursuant to Section 5.07(e) and the Trust Administration Fee
(together, the “Trust Administration Compensation”).  The Trust Administrator 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
5.22. [Reserved].  

          Section
5.23. Reports to the Indenture Trustee.

          (a)
Not later than 30 days after each Payment Date, the Trust Administrator shall,
upon request, forward to the Indenture Trustee a statement, deemed to have been
certified by a officer of the Trust Administrator, setting forth the status of
the Collection Account maintained by the Trust Administrator as of the close of
business on the related Payment Date, indicating

94

that all
payments required by this Agreement to be made by the Trust Administrator have
been made (or if any required payment has not been made by the Trust
Administrator, specifying the nature and status thereof) and showing, for the
period covered by such statement, the aggregate of deposits into and
withdrawals from the Collection Account maintained by the Trust
Administrator.  Copies of such statement
shall be provided by the Trust Administrator, upon request, to the Depositor
and any Noteholders (or by the Indenture Trustee at the Trust Administrator’s
expense if the Trust Administrator shall fail to provide such copies to the
Noteholders, unless (i) the Trust Administrator shall have failed to provide the
Indenture Trustee with such statement or (ii) the Indenture Trustee shall be
unaware of the Trust Administrator’s failure to provide such statement).

          (b)
Not later than two Business Days following each Payment Date, the Trust
Administrator shall deliver or otherwise make available to one Person
designated by the Depositor, in a format consistent with other electronic loan
level reporting supplied by the Trust Administrator in connection with similar
transactions, “loan level” information with respect to the Mortgage Loans as of
the related Determination Date, to the extent that such information has been
provided to the Trust Administrator by the Servicer or by the Depositor.

          Section
5.24. [Reserved].  

          Section
5.25. [Reserved].  

          Section
5.26. Merger or Consolidation.
Any Person into which the Indenture Trustee may be merged or
consolidated, or any Person resulting from any merger, conversion, other change
in form or consolidation to which the Indenture Trustee shall be a party, or
any Person succeeding to the business of the Indenture Trustee, shall be the
successor to the Indenture Trustee 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 or resulting Person to the Indenture Trustee shall be a Person that
shall be qualified and approved (or that have an Affiliate that is qualified
and approved) to service mortgage loans for Fannie Mae or FHLMC and shall have
a net worth of not less than $15,000,000.

          Section
5.27. Resignation of Indenture Trustee.
Except as otherwise provided in Sections 5.26 and this Section 5.27
hereof, the Indenture Trustee shall not resign from the obligations and duties
hereby imposed on it unless it determines that its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason
of applicable law with any other activities carried on by it and cannot be
cured.  Any such determination
permitting the resignation of the Indenture Trustee shall be evidenced by an
Opinion of Counsel that shall be Independent to such effect delivered to the
Indenture Trustee.  No such resignation
shall become effective until the Indenture Trustee shall have assumed, or a
successor Indenture Trustee shall have been appointed by the Indenture Trustee
and until such successor shall have assumed, the Indenture Trustee’s
responsibilities and obligations under this Agreement.  Notice of such resignation shall be given
promptly by the Indenture Trustee and the Depositor to the Indenture Trustee. 

95

          Section
5.28. Assignment or Delegation of Duties by the Trust Administrator.  Except as expressly provided herein, the
Trust Administrator 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 Trust Administrator hereunder,
unless the Depositor shall have consented to such action; provided, however, that the Trust Administrator shall have the
right without the prior written consent of the Depositor to delegate or assign
to or subcontract with or authorize or appoint an Affiliate of the Trust
Administrator to perform and carry out any duties, covenants or obligations to
be performed and carried out by the Trust Administrator hereunder.  In no case, however, shall any such
delegation, subcontracting or assignment to an Affiliate of the Trust
Administrator relieve the Trust Administrator of any liability hereunder.  Notice of such permitted assignment shall be
given promptly by the Trust Administrator to the Depositor.  If, pursuant to any provision hereof, the
duties of the Trust Administrator are transferred to a successor Trust
Administrator, the entire amount of compensation payable to the Trust
Administrator pursuant hereto, including amounts payable to or permitted to be
retained or withdrawn by the Trust Administrator pursuant to Section 5.21
hereof, shall thereafter be payable to such successor Trust Administrator.

          Section
5.29. Limitation on Liability of the Trust Administrator and Others.  

          (a)
The Trust Administrator undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement.

          (b)
No provision of this Agreement shall be construed to relieve the Trust
Administrator from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that the duties and obligations of the Trust
Administrator shall be determined solely by the express provisions of this
Agreement, the Trust Administrator shall not 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 Trust Administrator and, in absence of bad faith on the
part of the Trust Administrator, the Trust Administrator 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 Trust Administrator
and conforming to the requirements of this Agreement.

          (c)
Neither the Trust Administrator nor any of the directors, officers, employees
or agents of the Trust Administrator shall be under any liability to the
Indenture Trustee or the Noteholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that
this provision shall not protect the Trust Administrator or any such person
against any liability that would otherwise be imposed by reason of willful
misfeasance, fraud, bad faith or negligence in its performance of its duties or
by reason of reckless disregard for its obligations and duties under this
Agreement.  The Trust Administrator and
any director, officer, employee or agent of the Trust Administrator shall be
entitled to indemnification by the Trust Estate and will be held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement or the Notes other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence
in the performance of his or its duties 

96

hereunder or by reason of reckless
disregard of his or its obligations and duties hereunder.  The Trust Administrator and any director,
officer, employee or agent of the Trust Administrator 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 Trust Administrator shall be under no obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties
pursuant to this Agreement and that in its opinion may involve it in any
expenses or liability; provided, however,
that the Trust Administrator may in its sole discretion undertake any such
action that it may deem necessary or desirable in respect to this Agreement and
the rights and duties of the parties hereto and the interests of the
Noteholders 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 Issuing Entity and
the Trust Administrator shall be entitled to be reimbursed therefor out of the
Collection Account it maintains as provided by Section 5.08.

          Section
5.30. Indemnification; Third-Party Claims.  The Trust Administrator agrees to indemnify the Depositor, the
Issuing Entity and the Indenture Trustee, the Owner Trustee, the Swap
Counterparty, and the Servicer and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the
Depositor, the Issuing Entity, the Indenture Trustee, the Owner Trustee, the
Swap Counterparty, or the Servicer may sustain as a result of (i) the Trust
Administrator’s willful misfeasance, bad faith or negligence in the performance
of its duties under this Agreement, or (ii) the failure of the Trust
Administrator to perform its duties in compliance with the terms of this
Agreement.  The Depositor, the Issuing Entity,
the Indenture Trustee, the Owner Trustee and the Servicer shall promptly notify
the Trust Administrator if a claim is made by a third party with respect to
this Agreement, the Mortgage Loans entitling the Depositor, the Issuing Entity,
the Indenture Trustee, the Owner Trustee or the Servicer to indemnification
under this Section 5.30, whereupon the Trust Administrator shall assume the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or them in respect of such claim.

          Section
5.31. [Reserved.]

          Section
5.32. Transfer of Servicing.
Except in the case of a transfer or assignment of servicing to the
Servicing Rights Pledgee as contemplated pursuant to, and on the terms and
conditions set forth in, Section 4.06(c) or the eighth paragraph of Section
4.08(a), the Servicer agrees that it shall provide written notice to the Trust
Administrator and the Indenture Trustee and the Swap Counterparty thirty days
prior to any proposed transfer or assignment by the Servicer of the servicing
of the Mortgage Loans.  In addition, the
ability of the Servicer to transfer or assign the servicing hereunder to a
successor servicer shall be subject to the following conditions (provided, that only clause (vi) below
shall apply to a transfer or assignment of servicing to the Servicing Rights
Pledgee as contemplated pursuant to, and on the terms and conditions set forth
in, Section 4.06(c) or the eighth paragraph of Section 4.08(a)):

                    (i)
Receipt of written consent of the Trust Administrator and Indenture Trustee to
such transfer, which consent shall not be unreasonably withheld;

97

                    (ii)
Such successor servicer must be qualified to service loans for FNMA or FHLMC,
and must be a member in good standing of MERS;

                    (iii)
Such successor servicer must satisfy the servicer eligibility standards set
forth in Section 4.06(d);

                    (iv)
Such successor servicer must execute and deliver to the Indenture Trustee an
agreement, in form and substance reasonably satisfactory to the Indenture
Trustee, that contains an assumption by such successor servicer of the due and
punctual performance and observance of each covenant and condition to be
performed and observed by the Servicer;

                    (v)
If the successor servicer is not a Servicer of Mortgage Loans at the time of
the transfer, there must be delivered to the Indenture Trustee a letter from
each Rating Agency to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the then-current rating
of any of the Notes; and

                    (vi)
The Servicer shall take such steps, as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the Mortgage Loans to
such successor servicer, including, but not limited to, the following:  (A) to the extent required by the terms of
the Mortgage Loans and by applicable federal and state laws and regulations,
the Servicer shall timely mail to each obligor under a Mortgage Loan any
required notices or disclosures describing the transfer of servicing of the
Mortgage Loans to the successor servicer; (B) prior to the effective date of such
transfer of servicing, the Servicer shall transmit to any related insurer
notification of such transfer of servicing; (C) on or prior to the effective
date of such transfer of servicing, the Servicer shall deliver to the successor
servicer all Mortgage Loan Documents and any related records or materials; (D)
on or prior to the effective date of such transfer of servicing, the Servicer
shall transfer to the successor servicer, or, if such transfer occurs after a
Servicer Remittance Date but before the next succeeding Payment Date, to the
Indenture Trustee, all funds held by the Servicer in respect of the Mortgage
Loans; (E) on or prior to the effective date of such transfer of servicing, the
Servicer shall, after the effective date of the transfer of servicing to the
successor servicer, continue to forward to such successor servicer, within one
Business Day of receipt, the amount of any payments or other recoveries
received by the prior Servicer, and to notify the successor servicer of the
source and proper application of each such payment or recovery; and (F) the
Servicer shall, after the effective date of transfer of servicing to the
successor servicer, continue to cooperate with the successor servicer to
facilitate such transfer in such manner and to such extent as the successor
servicer may reasonably request.  

ARTICLE
VI 

DEPOSITS
AND PAYMENTS TO HOLDERS

          Section
6.01. The Collection Account.  

          (a)
The Trust Administrator shall establish and maintain in the name of the
Securities Intermediary the Collection Account as provided in Section 5.07,
which account shall be pledged to the Indenture Trustee for the benefit of the
Noteholders and the Swap Counterparty.

98

          (b)
The Trust Administrator shall make withdrawals from the Collection Account only
for the purposes set forth in Section 5.08.

          Section
6.02. Payments from the Collection Account.  

          (a)
On each Payment Date, the Paying Agent shall withdraw from the Collection
Account the Total Remittance Amount (to the extent such amount is on deposit in
the Collection Account) and shall pay such amount as specified in this
Section.  

          (b)
On each Payment Date, the Paying Agent shall pay the Interest Funds for Group 1
for such date in the following order of priority in accordance with the report
of the Trust Administrator:

                    (i)
to the Swap Counterparty, to the extent not previously paid from the Collection
Account, the Group 1 Percentage of any Net Swap Payment for such Payment Date
and swap termination amounts payable to the Swap Counterparty in the event that
the Issuing Entity is a defaulting party or an affected party under the terms
of the Swap Agreement;

                    (ii)
to the Swap Counterparty, to the extent not previously paid from the Collection
Account, the unpaid Group 2 Percentage of any Net Swap Payment for such Payment
Date and swap termination amounts payable to the Swap Counterparty in the event
that the Issuing Entity is the defaulting party or an affected party under the
terms of the Swap Agreement (after giving effect to payments of Interest Funds
pursuant to Section 6.02(c));

                    (iii)
to the Class 1-A Notes, Current Interest thereon for such Payment Date;

                    (iv)
pro rata, to the Class 2-A1 Notes,
the Class 2-A2 Notes and the Class 2-A3 Notes, Current Interest thereon (after
giving effect to payments of the Interest Funds pursuant to Section 6.02(c))
for such Payment Date; and

                    (v)
for application  pursuant to clause (d)
below, any Interest Funds remaining undistributed for such Payment Date.

          (c)
On each Payment Date, the Paying Agent shall pay the Interest Funds for Group 2
for such date in the following order of priority in accordance with the report of
the Trust Administrator:

                    (i)
to the Swap Counterparty, to the extent not previously paid from the Collection
Account, the Group 2 Percentage of any Net Swap Payment for such Payment Date
and swap termination amounts payable to the Swap Counterparty in the event that
the Issuing Entity is a defaulting party or an affected party under the terms
of the Swap Agreement;

                    (ii)
to the Swap Counterparty, to the extent not previously paid from the Collection
Account, the unpaid Group 1 Percentage of any Net Swap Payment for such Payment
Date and swap termination amounts payable to the Swap Counterparty in the event
that the Issuing Entity is the defaulting party or an affected party under the
terms of the Swap Agreement (after giving effect to payments of Interest Funds
pursuant to Section 6.02(b));

99

                    (iii)
pro rata, to the Class 2-A1 Notes, the Class 2-A2 Notes and the Class 2-A3
Notes, Current Interest thereon for such Payment Date;

                    (iv)
to the Class 1-A Notes, Current Interest thereon (after giving effect to
payments of the Interest Funds pursuant to Section 6.02(b)) for such Payment
Date; and

                    (v)
for application  pursuant to clause (d)
below, any Interest Funds remaining undistributed for such Payment Date. 

          (d)
On each Payment Date, the Paying Agent shall pay the aggregate of any remaining
Interest Funds from Group 1 and Group 2 from Section 6.02(b)(iii) and Section
6.02(c)(iv), respectively, for such Payment Date in the following order of
priority in accordance with the report of the Trust Administrator:

                    (i)
to the Class M1 Notes, Current Interest for such Class for such Payment Date;

                    (ii)
to the Class M2 Notes, Current Interest for such Class for such Payment Date;

                    (iii)
to the Class M3 Notes, Current Interest for such Class for such Payment Date;

                    (iv)
to the Class M4 Notes, Current Interest for such Class for such Payment Date;

                    (v)
to the Class M5 Notes, Current Interest for such Class for such Payment Date;

                    (vi)
to the Class M6 Notes, Current Interest for such Class for such Payment Date;

                    (vii)
to the Class M7 Notes, Current Interest for such Class for such Payment Date;

                    (viii)
to the Class M8 Notes, Current Interest for such Class for such Payment Date;

                    (ix)
to the Class M9 Notes, Current Interest for such Class for such Payment Date;

                    (x)
to the Class M10 Notes, Current Interest for such Class for such Payment Date;

                    (xi)
to the Indenture Trustee, the Owner Trustee, the Trust Administrator, and the
Servicer, previously unreimbursed extraordinary costs, liabilities and expenses
to the extent provided in this Agreement; and

100

                    (xii)
for application as part of Monthly Excess Cashflow for such Payment Date, as
provided in subsection (f) of this Section any Interest Funds remaining
undistributed for such Payment Date.

          (e)
On each Payment Date, the Paying Agent shall pay the Principal Funds for such
date in accordance with the report of the Trust Administrator as follows:

                    (i)
On each Payment Date (a) prior to the Stepdown Date or (b) with respect to
which a Trigger Event is in effect, the Paying Agent shall make the following
payments to the extent of funds then in the Collection Account available
therefor, concurrently:

	
 

	
 

	
 

	
 

	
          (1)
  For Group 1: The Principal Payment Amount for Group 1 will be paid in
  the following order of priority:

	
 

	
 

	
 

	
 

	
          (A)
  to the Swap Counterparty, to the extent not previously paid from the
  Collection Account, the unpaid Group 1 Percentage of any Net Swap Payment for
  such Payment Date and swap termination amounts payable to the Swap
  Counterparty in the event that the Trust is a defaulting party or an affected
  party under the terms of the Swap Agreement (after giving effect to payments
  pursuant to Section 6.02(b)-(d) above);

	
 

	
 

	
 

	
 

	
 

	
          
  (B) to the Swap Counterparty, to the extent not previously paid from the
  Collection Account, the unpaid Group 2 Percentage of any Net Swap Payment for
  such Payment Date and  swap
  termination amounts payable to the Swap Counterparty pursuant to the Swap
  Agreement in the event that the Trust is the defaulting party or an affected
  party under the Swap Agreement (after giving effect to payments pursuant to
  Section 6.02(b)-(d) above and Section 6.02(e)(i)(2)(A));

	
 

	
 

	
 

	
 

	
 

	
          (C)
  to the Class 1-A Notes, until the Class Principal Amount of such class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (D)
  sequentially, to the Class 2-A1 Notes, the Class 2-A2 Notes and the Class
  2-A3 Notes, in that order, after giving effect to payments pursuant to
  Section 6.02(e)(i)(2)(C), until the Class Principal Amount of each such class
  has been reduced to zero; provided that if on any Payment Date the
  Total Principal Deficiency Amount exceeds the aggregate Class Principal
  Amounts of the Class M Notes, all payments pursuant to this clause will be
  made concurrently, on a pro rata basis, to the Class 2-A1 Notes, the
  Class 2-A2 Notes and the Class 2-A3 Notes;

	
 

	
 

	
 

	
 

	
 

	
          (E)
  to the Class M1 Notes, until the Class Principal Amount of such Class has been
  reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (F)
  to the Class M2 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

101

	
 

	
 

	
 

	
 

	
 

	
          (G)
  to the Class M3 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (H)
  to the Class M4 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (I)
  to the Class M5 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (J)
  to the Class M6 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (K)
  to the Class M7 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (L)
  to the Class M8 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (M)
  to the Class M9 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (N)
  to the Class M10 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (O)
  to the Swap Counterparty, to the extent not previously paid, the Group 1
  Percentage of swap termination amounts payable to the Swap Counterparty in
  the event that the Swap Counterparty is a defaulting party or the sole
  affected party under the Swap Agreement; 

	
 

	
 

	
 

	
 

	
 

	
          (P)
  to the Swap Counterparty, to the extent not previously paid, the unpaid Group
  2 Percentage of any swap termination payment payable to the Swap Counterparty
  in the event that the Swap Counterparty is a defaulting party or the sole
  affected party under the Swap Agreement (after giving effect to payments
  pursuant to Section 6.02(e)(i)(2)(O) below); and

	
 

	
 

	
 

	
 

	
 

	
          (Q)
  for application as part of Monthly Excess Cashflow for such Payment Date, as
  provided for in subsection (f) of this Section, any such Principal Payment
  Amount for Group 1 remaining after application pursuant to clauses (A)
  through (P) above.

	
 

	
 

	
 

	
 

	
          (2)
  For Group 2:  The Principal Payment
  Amount for Group 2 will be paid in the following order of priority:

	
 

	
 

	
 

	
 

	
          (A)
  to the Swap Counterparty, to the extent not previously paid from the
  Collection Account, the unpaid Group 2 Percentage of any Net Swap Payment for
  such Payment Date and swap termination amounts payable to the Swap
  Counterparty in the event that the Trust is a 

102

	
 

	
 

	
 

	
 

	
 

	
defaulting party or an affected party under the terms of
  the Swap Agreement (after giving effect to payments pursuant to Section
  6.02(b)-(d) above);

	
 

	
 

	
 

	
 

	
 

	
          (B)
  to the Swap Counterparty, to the extent not previously paid from the
  Collection Account, the unpaid Group 1 Percentage of any Net Swap Payment for
  such Payment Date and  swap
  termination amounts payable to the Swap Counterparty pursuant to the Swap
  Agreement in the event that the Trust is the defaulting party or an affected
  party under the Swap Agreement (after giving effect to payments pursuant to
  Section 6.02(b)-(d) above and Section 6.02(e)(i)(1)(A));

	
 

	
 

	
 

	
 

	
 

	
          (C)
  sequentially, to the Class 2-A1 Notes, the Class 2-A2 Notes and the Class
  2-A3 Notes, in that order, until the Class Principal Amount of such class has
  been reduced to zero; provided that if on any Payment Date the Total
  Principal Deficiency Amount exceeds the aggregate Class Principal Amounts of
  the Class M Notes, all payments pursuant to this clause will be made
  concurrently, on a pro rata basis, to the Class 2-A1 Notes, the Class
  2-A2 Notes and the Class 2-A3 Notes;

	
 

	
 

	
 

	
 

	
 

	
          (D)
  to the Class 1-A Notes, after giving effect to payments pursuant to Section
  6.02(e)(i)(1)(C), until the Class Principal Amount of each such class has
  been reduced to zero; 

	
 

	
 

	
 

	
 

	
 

	
          (E)
  to the Class M1 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (F)
  to the Class M2 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (G)
  to the Class M3 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (H)
  to the Class M4 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (I)
  to the Class M5 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (J)
  to the Class M6 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (K)
  to the Class M7 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (L)
  to the Class M8 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

103

	
 

	
 

	
 

	
 

	
 

	
          (M)
  to the Class M9 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (N)
  to the Class M10 Notes, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          (O)
  to the Swap Counterparty, to the extent not previously paid, the Group 2
  Percentage of swap termination amounts payable to the Swap Counterparty in
  the event that the Swap Counterparty is a defaulting party or the sole
  affected party under the Swap Agreement; 

	
 

	
 

	
 

	
 

	
 

	
          (P)
  to the Swap Counterparty, to the extent not previously paid, the unpaid Group
  1 Percentage of any swap termination payment payable to the Swap Counterparty
  in the event that the Swap Counterparty is a defaulting party or the sole
  affected party under the Swap Agreement (after giving effect to payments
  pursuant to Section 6.02(e)(i)(1)(O)); and

	
 

	
 

	
 

	
 

	
 

	
          (Q)
  for application as part of Monthly Excess Cashflow for such Payment Date, as
  provided for in subsection (f) of this Section, any such Principal Payment
  Amount for Group 2 remaining after application pursuant to clauses (A)
  through (P) above.

                    (ii)
On each Payment Date (a) on or after the Stepdown Date and (b) with respect to
which a Trigger Event is not in effect, the Paying Agent shall pay the
Principal Payment Amount for such date in the following order of priority:

	
 

	
 

	
 

	
          (1)
  to the Swap Counterparty, to the extent not previously paid from the
  Collection Account with respect to the Group 1 Mortgage Loans, the Group 1
  Percentage of any unpaid Net Swap Payment for such Payment Date and unpaid
  swap termination amounts and with respect to the Group 2 Mortgage Loans, the
  Group 2 Percentage of any unpaid Net Swap Payment for such Payment Date and
  unpaid swap termination amounts, payable to the Swap Counterparty in the
  event that the Issuing Entity is a defaulting party or an affected party
  under the terms of the Swap Agreement (after giving effect to payments
  pursuant to Section 6.02(b)-(d) above);

	
 

	
 

	
 

	
          (2)
  to the Class 1-A Notes (from amounts in Group 1 except as provided below) and
  to the Class 2-A1 Notes, Class 2-A2 Notes and Class 2-A3 Notes (from amounts
  in Group 2 except as provided below), sequentially, in that order, in each
  case, an amount equal to the lesser of (x) the Principal Payment Amount for
  the related Mortgage Group for such Payment Date and (y) the Related Senior
  Principal Payment Amount for such Mortgage Group for such Payment Date, in
  each case until the Class Principal Amount of each such class or classes has
  been reduced to zero; provided, however, to the extent that the
  Principal Payment Amount for a Mortgage Group exceeds the Related Senior
  Principal Payment Amount for such Mortgage Group, such excess shall be
  applied to the class or classes of Class A Notes of the other Mortgage Group
  (in 

104

	
 

	
 

	
 

	
the case of the Class 2-A1, Class 2-A2 and Class 2-A3,
  sequentially, in that order), but in an amount not to exceed the Senior
  Principal Payment Amount for such Payment Date (as limited by  subclauses (x) and (y) of this clause
  (iii) on such Payment Date); provided that if on any Payment Date the
  Total Principal Deficiency Amount exceeds the aggregate Class Principal
  Amounts of the Class M Notes, to the Class 1-A Notes (from the amounts in
  Group 1) and to the Class 2-A1, Class 2-A2 and Class 2-A3 (from amounts in
  Group 2), pro rata, the Principal
  Payment Amount for the related Mortgage Group for such Payment Date;

	
 

	
 

	
 

	
          (3)
  to the Class M1 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes on such Payment
  Date pursuant to clause (2) above, and (y) the M1 Principal Payment Amount
  for such Payment Date, until the Class Principal Amount of such Class has
  been reduced to zero;

	
 

	
 

	
 

	
          (4)
  to the Class M2 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1 Notes on such Payment Date pursuant to clauses (2) and (3) above,
  respectively, and (y) the M2 Principal Payment Amount for such Payment Date,
  until the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
          (5)
  to the Class M3 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1 and Class M2 Notes on such Payment Date pursuant to clauses (2), (3) and
  (4) above, respectively, and (y) the M3 Principal Payment Amount for such
  Payment Date, until the Class Principal Amount of such Class has been reduced
  to zero;

	
 

	
 

	
 

	
          (6)
  to the Class M4 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1, Class M2 and Class M3 Notes on such Payment Date pursuant to clauses (2),
  (3), (4) and (5)above,
  respectively, and (y) the M4 Principal Payment Amount for such Payment Date,
  until the Class Principal Amount of each such Class has been reduced to zero;

	
 

	
 

	
 

	
          (7)
  to the Class M5 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1, Class M2, Class M3 and Class M4 Notes on such Payment Date pursuant to
  clauses (2), (3), (4), (5) and (6)
  above, respectively, and (y) the M5 Principal Payment Amount for such Payment
  Date, until the Class Principal Amount of each such Class has been reduced to
  zero;

105

	
 

	
 

	
 

	
          (8)
  to the Class M6 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1, Class M2, Class M3, Class M4 and Class M5 Notes on such Payment Date
  pursuant to clauses (2), (3), (4),
  (5), (6) and (7) above, respectively, and (y) the M6 Principal Payment
  Amount for such Payment Date, until the Class Principal Amount of each such
  Class has been reduced to zero;

	
 

	
 

	
 

	
          (9)
  to the Class M7 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1, Class M2, Class M3, Class M4, Class M5 and Class M6 Notes on such Payment
  Date pursuant to clauses (2), (3), (4), (5), (6),(7) and
  (8) above, respectively, and (y) the M7 Principal Payment Amount for such
  Payment Date, until the Class Principal Amount of each such Class has been
  reduced to zero; and

	
 

	
 

	
 

	
          (10)
  to the Class M8 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1, Class M2, Class M3, Class M4, Class M5, Class M6 and Class M7 Notes on such
  Payment Date pursuant to clauses (2), (3), (4), (5), (6), (7), (8) and (9)
  above, respectively, and (y) the M8 Principal Payment Amount for such Payment
  Date, until the Class Principal Amount of each such Class has been reduced to
  zero; and

	
 

	
 

	
 

	
          (11)
  to the Class M9 Notes, an amount equal to the lesser of (x) the excess of (a)
  the aggregate Principal Payment Amounts for each of Group 1 and Group 2 for
  such Payment Date over (b) the amount paid to the Senior Notes and the Class
  M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class M7 and Class M8
  Notes on such Payment Date pursuant to clauses (2), (3), (4), (5), (6), (7),
  (8), (9) and (10) above, respectively, and (y) the M9 Principal Payment
  Amount for such Payment Date, until the Class Principal Amount of each such
  Class has been reduced to zero; and

	
 

	
 

	
 

	
          (12)
  to the Class M10 Notes, an amount equal to the lesser of (x) the excess of
  (a) the aggregate Principal Payment Amounts for each of Group 1 and Group 2
  for such Payment Date over (b) the amount paid to the Senior Notes and the
  Class M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class
  M8 and Class M9 Notes on such Payment Date pursuant to clauses (2), (3), (4),
  (5), (6), (7), (8), (9), (10) and (11) above, respectively, and (y) the M10
  Principal Payment Amount for such Payment Date, until the Class Principal
  Amount of each such Class has been reduced to zero; 

	
 

	
 

	
 

	
          (13)
  to the Swap Counterparty, to the extent not previously paid, swap termination
  amounts payable to the Swap Counterparty in the event that the Swap
  Counterparty is a defaulting party or the sole affected party under the terms
  of the Swap Agreement; and

106

	
 

	
 

	
 

	
          (14)
  for application as part of Monthly Excess Cashflow for such Payment Date, as
  provided in subsection (f) of this Section, any Principal Payment Amount
  remaining after application pursuant to clauses (1) through (13) above.

          (f)
On each Payment Date, the Paying Agent shall pay the Monthly Excess Cashflow for
such date in accordance with the report of the Trust Administrator as follows:

                    (i)
for each Payment Date occurring (a) before the Stepdown Date or (b) on or after
the Stepdown Date but for which a Trigger Event is in effect:

	
 

	
 

	
 

	
 

	
          (a)
  up to the Overcollateralization Deficiency Amount for such Payment Date, in
  the following order of priority:

	
 

	
 

	
 

	
 

	
          i.
  concurrently, in proportion to the aggregate Class Principal Amounts of each
  Class of Senior  Notes, after giving
  effect to previous principal payments on such Payment Date pursuant to
  Subsections 6.02(e)(i)(1) and 6.02(e)(i)(2), to the Class 1-A, Class 2-A1,
  Class 2-A2 and Class 2-A3 Notes, in accordance with the Senior Priorities,
  until the Class Principal Amount of each such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          ii.
  to the Class M1 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          iii.
  to the Class M2 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          iv.
  to the Class M3 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          v.
  to the Class M4 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          vi.
  to the Class M5 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          vii.
  to the Class M6 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero; and

	
 

	
 

	
 

	
 

	
 

	
          viii.
  to the Class M7 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

107

	
 

	
 

	
 

	
 

	
 

	
          ix.
  to the Class M8 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          x.
  to the Class M9 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
 

	
          xi.
  to the Class M10 Notes, in reduction of their Class Principal Amount, until
  the Class Principal Amount of such Class has been reduced to zero;

	
 

	
 

	
 

	
 

	
          (b)
  to the extent of any Available Funds Shortfall, to the payment of such
  amounts to the Notes, in the order of priority of the Classes of Notes as set
  forth immediately above in proportion
  and with respect to the Senior Notes to their amount of unpaid
  Available Funds Shortfalls, until each such Class has received in full all
  amounts of any Available Funds Shortfall.

	
 

	
 

	
 

	
          (c)
  to the Swap Counterparty, to the extent not previously paid, swap termination
  amounts payable to the Swap Counterparty in the event that the Swap
  Counterparty is a defaulting party or the sole affected party under the terms
  of the Swap Agreement;

	
 

	
 

	
 

	
          (d)
  sequentially, to the Class M1 Notes, Class M2 Notes, Class M3 Notes, Class M4
  Notes, Class M5 Notes, Class M6 Notes, Class M7 Notes, Class  M8 Notes,
  Class M9 Notes and  Class M10
  Notes in that order, Deferred Interest, if any, for such Class, until each
  such Class has received in full its Deferred Interest; and

	
 

	
 

	
 

	
          (e)
  to the Ownership Certificate, any amount remaining on such date after
  application pursuant to clauses (a) through (d) above; or

                    (ii)
for each Payment Date occurring on or after the Stepdown Date and for which a
Trigger Event is not in effect, the Paying Agent shall pay, in accordance with
the report of the Trust Administrator, in the following order of priority:

	
 

	
 

	
 

	
          (a)
  concurrently, in proportion to the aggregate Class Principal Amounts of each
  Class of Senior Notes, after giving effect to previous principal payments on
  such Payment Date pursuant to subsections 6.02(e)(i)(1) and 6.02(e)(i)(2), to
  the Class 1-A, Class 2-A1, Class 2-A2 and Class 2-A3 Notes (with respect to
  the Class 2-A1, Class 2-A2 and Class 2-A3 Notes, to be paid sequentially, in
  that order; provided that if on any Payment Date the Total Principal
  Deficiency Amount exceeds the aggregate Class Principal Amount of the Class M
  Notes, all payments pursuant to this clause will be made concurrently, on a
  pro rata basis, to the Class 2-A1 Notes, Class 2-A2 Notes and Class 2-A3
  Notes), until the aggregate Class Principal Amount of each such Class, after
  giving effect to payments on such Payment Date, equals the Senior Target
  Amount;

108

	
 

	
 

	
 

	
          (b)
  to the Class M1 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the  Class M1 Notes, after giving effect to
  payments on such Payment Date, equals the M1 Target Amount;

	
 

	
 

	
 

	
          (c)
  to the Class M2 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the Class M1 and
  Class M2 Notes, after giving effect to payments on such Payment Date, equals
  the M2 Target Amount;

	
 

	
 

	
 

	
          (d)
  to the Class M3 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the Class M1,
  Class M2 and Class M3 Notes, after giving effect to payments on such Payment
  Date, equals the M3 Target Amount;

	
 

	
 

	
 

	
          (e)
  to the Class M4 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the Class M1,
  Class M2, Class M3 and Class M4 Notes, after giving effect to payments on
  such Payment Date, equals the M4 Target Amount;

	
 

	
 

	
 

	
          (f)
  to the Class M5 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the Class M1,
  Class M2, Class M3, Class M4 and Class M5 Notes, after giving effect to
  payments on such Payment Date, equals the M5 Target Amount;

	
 

	
 

	
 

	
          (g)
  to the Class M6 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the  Class M1, Class M2, Class M3, Class M4,
  Class M5 and Class M6 Notes, after giving effect to payments on such Payment
  Date, equals the M6 Target Amount;

	
 

	
 

	
 

	
          (h)
  to the Class M7 Notes, in reduction of their Class Principal Amount, until the
  aggregate Class Principal Amount of the Senior Notes and the Class M1, Class
  M2, Class M3, Class M4, Class M5, Class M6 and Class M7 Notes, after giving
  effect to payments on such Payment Date, equals the M7 Target Amount;

	
 

	
 

	
 

	
          (i)
  to the Class M8 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the Class M1,
  Class M2, Class M3, Class M4, Class M5, Class M6, Class M7 and Class M8
  Notes, after giving effect to payments on such Payment Date, equals the M8
  Target Amount;

	
 

	
 

	
 

	
          (j)
  to the Class M9 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the Class M1,
  Class M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8 and Class
  M9 Notes, after giving effect to payments on such Payment Date, equals the M9
  Target Amount;

109

	
 

	
 

	
 

	
          (k)
  to the Class M10 Notes, in reduction of their Class Principal Amount, until
  the aggregate Class Principal Amount of the Senior Notes and the Class M1, Class
  M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8, Class M9 and
  Class M10 Notes, after giving effect to payments on such Payment Date, equals
  the M10 Target Amount;

	
 

	
 

	
 

	
          (l)
  to the extent of any Available Funds Shortfall, to the payment of such
  amounts to the Notes, in the order of priority of the Classes of Notes as set
  forth immediately above, and with respect to the Senior Notes, in proportion
  to their amount of unpaid Available Funds Shortfalls, until each such Class
  has received in full all amounts of any Available Funds Shortfall;

	
 

	
 

	
 

	
          (m)
  to the Swap Counterparty, to the extent not previously paid, swap termination
  amounts payable to the Swap Counterparty in the event that the Swap
  Counterparty is a defaulting party or the sole affected party under the terms
  of the Swap Agreement;

	
 

	
 

	
 

	
          (n)
  sequentially, to the Class M1 Notes, Class M2 Notes, Class M3 Notes, Class M4
  Notes, Class M5 Notes, Class M6 Notes, Class M7 Notes, Class M8 Notes, Class
  M9 Notes and Class M10 Notes, in that order, Deferred Interest, if any, for
  such Class, until each such Class has received in full its Deferred Interest;
  and

	
 

	
 

	
 

	
          (o)
  to the Ownership Certificate, any amount remaining on such date after
  application pursuant to clauses (a) through (n) above.

          In
addition, all Prepayment Premiums collected by the Servicer shall be payable to
the holder of the Ownership Certificate.
On the Redemption Date, the Paying Agent shall distribute to each Class
of Notes the related Redemption Price therefor, as set forth in the
Indenture.  

          Section
6.03. Net Swap Payments and Net Swap Receipts.  Any Net Swap Receipts shall be deposited by the Swap Counterparty
into the Basis Risk Reserve Account in accordance with the terms of the Swap
Agreement.  On any Payment Date for
which there are funds on deposit in the Basis Risk Reserve Account, the Paying
Agent shall withdraw such amounts from the Basis Risk Reserve Account and
deposit such amounts in the Collection Account, and from the Collection Account
shall apply the Net Swap Receipt as Interest Funds and shall make payments
specified in the order and priority described in Section 6.02 above.  

          Section
6.04. Control of the Trust Account and Deferred Interest.  

          (a)
The Depositor, the Issuing Entity and the Indenture Trustee hereby appoint  the Trust Administrator as Securities
Intermediary with respect to the Trust Account, and the Issuing Entity has,
pursuant to the Indenture, granted to the Indenture Trustee, for the benefit of
the Noteholders and the Swap Counterparty, a security interest to secure all
amounts due Noteholders and the Swap Counterparty hereunder in and to the Trust
Account and the Security Entitlements to all Financial Assets credited to the
Trust Account, including without limitation all amounts, securities,
investments, Financial Assets, investment property and other property from time
to time deposited in or credited to the Trust Account and all proceeds
thereof.  

110

Amounts held from time to time in
the Trust Account will continue to be held by the Securities Intermediary for
the benefit of the Indenture Trustee, as collateral agent, for the benefit of
the Noteholders and the Swap Counterparty.
Upon the termination of the Issuing Entity or the discharge of the
Indenture, the Indenture Trustee shall inform the Securities Intermediary and
the Swap Counterparty of such termination.
By acceptance of their Notes or interests therein, the Noteholders shall
be deemed to have appointed the Trust Administrator as Securities Intermediary.  The Trust Administrator hereby accepts such
appointment as Securities Intermediary.

          (b)
With respect to the Trust Account Property credited to the Trust Account, the
Securities Intermediary agrees that:

                    (i)
with respect to any Trust Account Property that is held in deposit accounts,
each such deposit account shall be subject to the exclusive custody and control
of the Securities Intermediary, and the Securities Intermediary shall have sole
signature authority with respect thereto;

                    (ii)
the sole assets permitted in the Trust Account shall be those as the Securities
Intermediary agrees to treat as Financial Assets; and

                    (iii)
any such Trust Account Property that is, or is treated as, a Financial Asset
shall be physically delivered (accompanied by any required endorsements) to, or
credited to an account in the name of, the Securities Intermediary or other
eligible institution maintaining the Trust Account in accordance with the
Securities Intermediary’s customary procedures such that the Securities
Intermediary or such other institution establishes a Security Entitlement in
favor of the Indenture Trustee with respect thereto over which the Securities
Intermediary or such other institution has Control;

          (c)
The Securities Intermediary hereby confirms that (A) the Trust Account is an
account to which Financial Assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the Indenture
Trustee, as collateral agent, as entitled to exercise the rights that comprise
any Financial Asset credited to the Trust Account, (B) all Trust Account
Property in respect of the Trust Account will be promptly credited by the
Securities Intermediary to such account, and (C) all securities or other
property underlying any Financial Assets credited to the Trust Account shall be
registered in the name of the Securities Intermediary, endorsed to the
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case will any
Financial Asset credited to the Trust Account be registered in the name of the
Depositor or the Issuing Entity, payable to the order of the Depositor or the
Issuing Entity or specially endorsed to the Depositor or the Issuing Entity,
except to the extent the foregoing have been specially endorsed to the
Securities Intermediary or in blank;

          (d)
The Securities Intermediary hereby agrees that each item of property (whether
investment property, Financial Asset, security, instrument or cash) credited to
the Trust Account shall be treated as a Financial Asset;

111

          (e)
If at any time the Securities Intermediary shall receive an Entitlement Order
from the Indenture Trustee directing transfer or redemption of any Financial
Asset relating to the Trust Account, the Securities Intermediary shall comply
with such Entitlement Order without further consent by the Depositor, the
Issuing Entity or any other Person.  If
at any time the Indenture Trustee or the Trust Administrator notifies the
Securities Intermediary in writing that the Issuing Entity has been terminated
or the Indenture discharged in accordance herewith and with the Trust Agreement
or the Indenture, as applicable, and the security interest granted pursuant to
the Indenture has been released, then thereafter if the Securities Intermediary
shall receive any order from the Depositor or the Issuing Entity directing
transfer or redemption of any Financial Asset relating to the Trust Account,
the Securities Intermediary shall comply with such Entitlement Order without
further consent by the Indenture Trustee or any other Person;

          (f)
In the event that the Securities Intermediary has or subsequently obtains by
agreement, operation of law or otherwise a security interest in the Trust
Account or any Financial Asset credited thereto, the Securities Intermediary
hereby agrees that such security interest shall be subordinate to the security
interest of the Indenture Trustee.  The
Financial Assets credited to the Trust Account will not be subject to
deduction, set-off, banker’s lien, or any other right in favor of any Person
other than the Indenture Trustee (except that the Securities Intermediary may
set-off (i) all amounts due to it in respect of its customary fees and expenses
for the routine maintenance and operation of the Trust Account and (ii) the
face amount of any checks which have been credited to the Trust Account but are
subsequently returned unpaid because of uncollected or insufficient funds);

          (g)
There are no other agreements entered into between the Securities Intermediary
in such capacity and the Depositor or the Issuing Entity with respect to the
Trust Account.  In the event of any
conflict between this Agreement (or any provision of this Agreement) and any
other agreement now existing or hereafter entered into, the terms of this
Agreement shall prevail;

          (h)
The rights and powers granted under the Indenture and herein to the Indenture
Trustee have been granted in order to perfect its security interest in the
Trust Account and the Security Entitlements to the Financial Assets credited
thereto, and are powers coupled with an interest and will neither be affected
by the bankruptcy of the Depositor or the Issuing Entity nor by the lapse of
time.  The obligations of the Securities
Intermediary hereunder shall continue in effect until the security interest of
the Indenture Trustee in the Trust Account, and in such Security Entitlements,
has been terminated pursuant to the terms of this Agreement and the Indenture
Trustee or the Issuing Entity, as applicable, has notified the Securities
Intermediary of such termination in writing; and

          (i)
Notwithstanding anything else contained herein, the Depositor and the Issuing
Entity agree that the Trust Account will be established only with the
Securities Intermediary or another institution meeting the requirements of this
Section, which by acceptance of its appointment as Securities Intermediary
agrees substantially as follows:  (1) it
will comply with Entitlement Orders related to the Trust Account issued by the
Indenture Trustee, as collateral agent, without further consent by the
Depositor or the Issuing Entity, without further consent by the Depositor; (2)
until termination of the Issuing Entity or discharge of the Indenture, it will
not enter into any other agreement related to such accounts pursuant to which
it agrees to comply with Entitlement Orders of any Person other than the
Indenture Trustee, as collateral agent; and 

112

(3) all assets delivered or
credited to it in connection with such account and all investments thereof will
be promptly credited to the applicable account.

          (j)
Notwithstanding the foregoing, the Issuing Entity shall have the power,
revocable by the Indenture Trustee or by the Owner Trustee with the consent of
the Indenture Trustee, to instruct the Trust Administrator and the Trust
Administrator to make withdrawals and payments from the Trust Account for the
purpose of permitting the Trust Administrator or the Owner Trustee to carry out
its respective duties hereunder or permitting the Indenture Trustee to carry
out its duties under the Indenture.

          (k)
Each of the Depositor and the Issuing Entity agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments
(including, without limitation, any financing statements under the Relevant UCC
or this Agreement) as may be necessary to perfect the interests created by this
Section in favor of the Issuing Entity and the Indenture Trustee and otherwise
fully to effectuate the purposes, terms and conditions of this Section.  The Depositor shall:

                    (i)
promptly execute, deliver and file any financing statements, amendments,
continuation statements, assignments, certificates and other documents with
respect to such interests and perform all such other acts as may be necessary
in order to perfect or to maintain the perfection of the Issuing Entity’s and
the Indenture Trustee’s security interest in the Trust Account Property; and

                    (ii)
make the necessary filings of financing statements or amendments thereto within
five days after the occurrence of any of the following:  (1) any change in its corporate name or any
trade name or its jurisdiction of organization; (2) any change in the location
of its chief executive office or principal place of business; and (3) any
merger or consolidation or other change in its identity or corporate structure
and promptly notify the Issuing Entity and the Indenture Trustee of any such
filings.

                    (iii)
Neither the Depositor nor the Issuing Entity shall organize under the law of
any jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice
of such action to its immediate and mediate transferee, including the Indenture
Trustee.  Before effecting such change,
each of the Depositor or the Issuing Entity proposing to change its
jurisdiction of organization shall prepare and file in the appropriate filing
office any financing statements or other statements necessary to continue the
perfection of the interests of its immediate and mediate transferees, including
the Trust Administrator, in the Trust Account Property.  In connection with the transactions
contemplated by the Operative Agreements relating to the Trust Account
Property, each of the Depositor and the Issuing Entity authorizes its immediate
or mediate transferee, including the Indenture Trustee, to file in any filing
office any initial financing statements, any amendments to financing
statements, any continuation statements, or any other statements or filings
described in this Section 6.04.

          None
of the Securities Intermediary or any director, officer, employee or agent of
the Securities Intermediary shall be under any liability to the Indenture
Trustee or the Noteholders 

113

for any action
taken; or not taken, in good faith pursuant to this Agreement, or for errors in
judgment; provided,
however, that this provision shall not protect the Securities
Intermediary against any liability to the Indenture Trustee or the Noteholders which
would otherwise be imposed by reason of the Securities Intermediary’s willful
misconduct, fraud, bad faith or negligence in the performance of its
obligations or duties hereunder. The Securities Intermediary and any director,
officer, employee or agent of the Securities Intermediary may rely in good
faith on any document of any kind which, prima facie, is properly executed and
submitted by any Person respecting any matters arising hereunder. The
Securities Intermediary shall be under no duty to inquire into or investigate
the validity, accuracy or content of such document. The Issuing Entity shall
indemnify the Securities Intermediary for and hold it harmless against any
loss, liability or expense arising out of or in connection with this Agreement
and carrying out its duties hereunder, including the costs and expenses of
defending itself against any claim of liability, except in those cases where
the Securities Intermediary has been guilty of fraud, bad faith, negligence or
willful misconduct. The foregoing indemnification shall survive any termination
of this Agreement or the resignation or removal of the Securities Intermediary.

          Section
6.05. Advances by the Servicer. Advances shall be made in respect of
each Servicer Remittance Date as provided herein. If, on any Determination
Date, the Servicer determines that any Scheduled Payments due during the
related Due Period have not been received, such Servicer shall advance such
amount to the extent provided in Section 4.03(c) and this Section 6.05. The
Servicer shall be entitled to be reimbursed from the Collection Account, and
from the Custodial Account, for all Advances made by it as provided in Section
4.02(e). Notwithstanding anything to the contrary herein, in the event the
Servicer determines in its reasonable judgment that an Advance or Servicing
Advance is a Nonrecoverable Advance, the Servicer shall be under no obligation
to make such Advance. The Servicer shall not be required to make any Advances
with respect to the principal portion of (i) the final payment of any Balloon
Loan (in such case, the Servicer shall advance the assumed monthly payment that
would have been due on the related Due Date based on the original principal
amortization schedule for such Balloon Loan) or (ii) the Monthly Payments that
would have been due on the related Due Date with respect to Second Lien
Mortgage Loans or any REO Property. The Servicer will not make Advances on any
Mortgage Loans due to bankruptcy proceedings, the application of the Civil
Relief Act or to cover any Prepayment Interest Shortfalls that exceed
Compensating Interest. Servicing Advances, if any, to be made by the Servicer
in respect of the Mortgage Loans and REO Properties for the related Payment
Date may be made either from its own funds or from amounts held for future
payment or both aggregating the total amount of Servicing Advances to be made
by the Servicer. Any amounts held for future payment and so used shall be
replaced by the Servicer in the Custodial Account on or before any future Servicer
Remittance Date if funds in the Custodial Account on such Servicer Remittance
Date shall be less than remittances to the Trust Administrator required to be
made on such Servicer Remittance Date.

          Section
6.06. [Reserved]. 

          Section
6.07.Establishment of Basis Risk Reserve Account.

          (a)
The Trust Administrator shall establish and maintain an Eligible Account in its
name in trust for the benefit of the Noteholders, the Basis Risk Reserve
Account.

114

          (b)
The Swap Counterparty shall deposit any Net Swap Receipts into the Basis Risk
Reserve Account as provided in the Swap Agreement. Amounts on deposit in the
Basis Risk Reserve Account shall remain uninvested.

ARTICLE VII

ADMINISTRATION OF THE AGREEMENTS

          Section
7.01. Duties of the Trust Administrator. 

          (a)
The Trust Administrator agrees to perform all of the duties of the Issuing
Entity under the Depository Agreement. In addition to its duties performed
under the Depository Agreement, the Trust Administrator shall take all
appropriate action that is the duty of the Issuing Entity to take with respect
to the following matters under the Trust Agreement, this Agreement and the
Indenture:

                    (i)
the duty to cause the Note Register to be kept if the Issuing Entity assumes
the duties of Note Registrar, and to give the Indenture Trustee notice of any
appointment of a new Note Registrar and the location, or change in location, of
the Note Register (Section 2.04 of the Indenture);

                    (ii)
the duty to cause the Certificate Register to be kept if the Issuing Entity
assumes the duties of Certificate Registrar, and to give the Owner Trustee
notice of any appointment of a new Certificate Registrar and the location, or
change in location, of the Certificate Register (Section 3.03 of the Trust
Agreement);

                    (iii)
causing the preparation of the Notes for execution by the Owner Trustee upon
the registration of any transfer or exchange of the Notes (Sections 2.04 and 2.05
of the Indenture);

                    (iv)
causing the preparation of Definitive Notes in accordance with the instructions
of any Clearing Agency, the duty to attempt to locate a qualified successor to
the Clearing Agency, if necessary, and the preparation of written notice to the
Indenture Trustee of termination of the book-entry system through the Clearing
Agency (Section 2.12 of the Indenture);

                    (v)
the maintenance of an office for registration of transfer or exchange of Notes
(Section 3.02 of the Indenture);

                    (vi)
the maintenance of an office for registration of transfer or exchange of the
Ownership Certificate (Section 3.03 of the Trust Agreement);

                    (vii)
the calculation of accrual of original issue discount and the amortization of
premium on the Notes (Section 3.03(v) of the Indenture);

115

                    (viii)
upon written notice or actual knowledge thereof, the notification to the
Indenture Trustee and each Rating Agency of a Servicer Event of Default under
this Agreement (Section 3.07(d) of the Indenture);

                    (ix)
upon written notice or actual knowledge thereof, the delivery of notice to the
Indenture Trustee and each Rating Agency of each Indenture Event of Default under
the Indenture (Section 3.19 of the Indenture);

                    (x)
the furnishing of the Indenture Trustee with the names and addresses of Holders
of Notes during any period when the Indenture Trustee is not the Note Registrar
(Section 7.01 of the Indenture);

                    (xi)
[reserved];

                    (xii)
the preparation (but not the execution) of the annual Officer’s Certificate
regarding the Issuing Entity’s compliance with the terms of the Indenture
(Section 3.09 of the Indenture);

                    (xiii)
the delivery of notice to the Indenture Trustee and each Rating Agency of each
Indenture Event of Default under the Indenture (Section 3.19);

                    (xiv)
causing the preparation of an Officer’s Certificate and the obtaining of the
Opinion of Counsel (which shall not be at the expense of the Trust
Administrator) with respect to any request by the Issuing Entity to the
Indenture Trustee to take any action under the Indenture (Sections 4.01 and
11.01 of the Indenture);

                    (xv)
the compliance with any directive of the Indenture Trustee with respect to the
sale of the Collateral in a commercially reasonable manner if an Indenture
Event of Default shall have occurred and be continuing under the Indenture
(Section 5.04 of the Indenture);

                    (xvi)
causing the preparation of an Issuing Entity Request and Officer’s Certificate
(and executing the same on behalf of the Issuing Entity) and the obtaining of
an Opinion of Counsel (which shall not be at the expense of the Trust
Administrator), if necessary, for the release of the Collateral, as defined in
the Indenture (Section 8.03 of the Indenture);

                    (xvii)
the mailing to the Noteholders of notices with respect to their consent to any
supplemental indentures (Sections 9.01, 9.02, 9.03 and 9.06 of the Indenture);
and

                    (xviii)
any other duties expressly required to be performed by the Trust Administrator
under the Indenture or the Trust Agreement.

          Notwithstanding
the foregoing, the Seller shall undertake the duties of the Issuing Entity
under the Indenture to cause the preparation of Issuing Entity Orders (and
execute the same on behalf of the Issuing Entity), and to obtain Opinions of
Counsel with respect to the execution of supplemental indentures and, if
necessary, to mail to the Noteholders notices with respect to their consent to
such supplemental indentures (Sections 9.01, 9.02, 9.03 and 9.06 of the
Indenture).

116

          (b)
The Issuing Entity will indemnify the Owner Trustee and the Trust
Administrator, and their respective agents for, and hold them harmless against,
any losses, liability or expense incurred without gross negligence or bad faith
on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust Agreement, this
Agreement or the Swap Agreement, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the exercise
or performance of any of their powers or duties under the Trust Agreement, the
Indenture or this Agreement.

          (c)
Subject to the penultimate paragraph of this Section 7.01, and in accordance
with the directions of the Owner Trustee, the Trust Administrator shall perform
or supervise the performance of such other activities in connection with the
Collateral (including the Operative Agreements) as are not covered by any of
the foregoing provisions and as are expressly requested in writing by the Owner
Trustee and are reasonably within the capability of the Trust Administrator.

          (d)
In carrying out the foregoing duties or any of its other obligations under this
Agreement, the Trust Administrator may enter into transactions with or otherwise
deal with any of its Affiliates; provided, however, that the terms of any
such transactions or dealings shall be in accordance with any directions
received from the Issuing Entity and shall be, in the Trust Administrator’s
opinion, no less favorable to the Issuing Entity than would be available from
unaffiliated parties.

          In
carrying out the foregoing duties or any of its other obligations under this
Agreement, the Trust Administrator shall be subject to the same standard of
care and have the same rights, indemnifications and immunities as the Indenture
Trustee under the Indenture, including, without limitation, the right to
reimbursement and indemnification on behalf of the Issuing Entity from funds in
the Collection Account for all losses, costs and expenses of any kind or nature
(including without limitation attorneys’ fees and disbursements) incurred by
the Trust Administrator (including without limitation in its various capacities
as Paying Agent, Certificate Paying Agent, Certificate Registrar and Note
Registrar) in connection with the performance of its duties hereunder or under
any other Operative Agreement.

          The
Trust Administrator in its capacity as the Certificate Registrar, and upon a
request received from the Owner Trustee, shall promptly notify the
Certificateholders of (i) any change in the Corporate Trust Office of the Owner
Trustee, (ii) any amendment to the Trust Agreement requiring notice be given to
the Certificateholders and (iii) any other notice required to be given to the
Certificateholders by the Owner Trustee under the Trust Agreement.

          Section
7.02. Duties of the Trust Administrator With Respect to the Indenture, the
Trust Agreement and this Agreement. 

          (a)
The Trust Administrator shall take all appropriate action that is the duty of
the Indenture Trustee to take with respect to the following matters under the
Indenture, the Trust Agreement and this Agreement:

                    (i)
the duties of an authenticating agent for authentication of the Notes (Sections
2.01, 2.02 and 2.11 of the Indenture);

117

                    (ii)
the duties of Note Registrar to be kept (Sections 2.03, 2.04, 2.05 and 2.07 of
the Indenture);

                    (iii)
to provide notices and instructions to the Clearing Agency (Section 2.10 of the
Indenture);

                    (iv)
the duties of Paying Agent (Sections 3.03, 4.01, 4.02 and 5.02 of the
Indenture); and

                    (v)
the duties of agent or attorney-in-fact for the purposes of filing financing
and continuation statements for the Issuing Entity (Section 3.05of the Indenture).

          (b)
The Issuing Entity will indemnify the Owner Trustee and the Trust
Administrator, and their respective agents for, and hold them harmless against,
any losses, liability or expense incurred without gross negligence or bad faith
on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust Agreement or this
Agreement, including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance
of any of their powers or duties under the Trust Agreement, the Indenture or
this Agreement.

          Section
7.03. Records. The Trust Administrator shall maintain appropriate books
of account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuing Entity
and the Depositor at any time during normal business hours.

          Section
7.04. [Reserved.]

          Section
7.05. Additional Information to be Furnished to the Issuing Entity. The
Depositor shall furnish to the Issuing Entity from time to time such additional
information regarding the Collateral as the Issuing Entity shall reasonably
request.

          Section
7.06. Independence of the Trust Administrator. For all purposes of this
Agreement, the Trust Administrator shall be an independent contractor and shall
not be subject to the supervision of the Issuing Entity or the Owner Trustee
with respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuing Entity, the
Trust Administrator shall have no authority to act for or represent the Issuing
Entity or the Owner Trustee in any way and shall not otherwise be deemed an
agent of the Issuing Entity or the Owner Trustee.

          Section
7.07. No Joint Venture. Nothing contained in this Agreement (i) shall
constitute the Trust Administrator or the Depositor, respectively, and either
of the Issuing Entity or the Owner Trustee, as members of any partnership,
joint venture, association, syndicate, unincorporated business or other
separate entity, (ii) shall be construed to impose any liability as such on any
of them or (iii) shall be deemed to confer on any of them any express, implied
or apparent authority to incur any obligation or liability on behalf of the
others.

          Section
7.08. Other Activities of Trust Administrator and the Depositor. Nothing
herein shall prevent the Trust Administrator, the Depositor or their respective
Affiliates from engaging

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in other
businesses or, in its sole discretion, from acting in a similar capacity as an
Trust Administrator for any other person or entity even though such person or
entity may engage in business activities similar to those of the Issuing Entity
or the Owner Trustee.

          Section
7.09. Resignation and Removal of Trust Administrator. 

          (a)
Subject to Section 7.09(d) hereof, the Trust Administrator may resign its
duties hereunder by providing the Issuing Entity with at least 60 days’ prior
written notice.

          (b)
Subject to Section 7.09(d) hereof, the Issuing Entity may remove the Trust
Administrator without cause by providing the Trust Administrator with at least
60 days’ prior written notice.

          (c)
Subject to Section 7.09(d) hereof, the Issuing Entity may remove the Trust
Administrator immediately upon written notice of termination from the Issuing
Entity to the Trust Administrator if any of the following events shall occur:

                    (i)
the Trust Administrator shall default in the performance of any of its duties
under this Agreement and, after notice of such default, shall not cure such
default within ten days (or, if such default cannot be cured in such time,
shall not give within ten days such assurance of cure as shall be reasonably
satisfactory to the Issuing Entity); or

                    (ii)
a court having jurisdiction in the premises shall (x) enter a decree or order
for relief, which decree or order shall not have been vacated within 60 days,
in respect of the Trust Administrator in any involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
or (y) appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Trust Administrator or any substantial
part of its property, or (z) order the winding-up or liquidation of the Trust
Administrator’s affairs; or

                    (iii)
the Trust Administrator shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator or similar official for the Trust
Administrator or any substantial part of its property, shall consent to the
taking of possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of creditors or
shall fail generally to pay its debts as they become due.

          The
Trust Administrator agrees that if any of the events specified in clauses (ii)
or (iii) of this Section 7.09(c) shall occur, it shall give written notice
thereof to the Issuing Entity and the Indenture Trustee within seven days after
the occurrence of such event.

          (d)
No resignation or removal of the Trust Administrator pursuant to this Section
shall be effective until (i) a successor Trust Administrator shall have been
appointed by the Issuing Entity in accordance with the Trust Agreement and (ii)
such successor Trust Administrator shall have agreed in writing to be bound by
the terms of this Agreement in the same manner as the Trust Administrator is
bound hereunder. If a successor Trust Administrator does not take office within
60 days after the retiring Trust Administrator resigns or is removed,

119

the resigning
or removed Trust Administrator or the Issuing Entity may petition any court of
competent jurisdiction for the appointment of a successor Trust Administrator.

          (e)
The appointment of any successor Trust Administrator shall be effective only
after receipt of a letter from each Rating Agency to the effect that such
proposed appointment will not cause a reduction or withdrawal of the then
current ratings of the Notes.

          (f)
Subject to Sections 7.09(d) and 7.09(e) above, the Trust Administrator
acknowledges that upon the appointment of a successor Indenture Trustee, the
Trust Administrator shall immediately resign and such successor Indenture
Trustee shall automatically become the Trust Administrator under this
Agreement. Any such successor Indenture Trustee shall be required to agree to
assume the duties of the Trust Administrator under the terms and conditions of
this Agreement and the other Operative Agreements in its acceptance of
appointment as successor Indenture Trustee.

          Section
7.10. Action upon Termination, Resignation or Removal of the Trust
Administrator. Promptly upon the effective date of termination of this
Agreement or the resignation or removal of the Trust Administrator pursuant to
Section 7.09 hereof, the Trust Administrator shall be entitled to be paid all
reimbursable expenses, including any reasonable out-of-pocket attorneys’ fees,
accruing to it to the date of such termination, resignation or removal. The
Trust Administrator shall forthwith upon such termination pursuant to Section
7.09 deliver to the successor Trust Administrator all property and documents of
or relating to the Collateral then in the custody of the Trust Administrator,
or if this Agreement has been terminated, to the Depositor. In the event of the
resignation or removal of the Trust Administrator pursuant to Section 7.09, the
Trust Administrator shall cooperate with the Issuing Entity and take all
reasonable steps requested to assist the Issuing Entity in making an orderly
transfer of the duties of the Trust Administrator.

ARTICLE VIII

COMMISSION REPORTING

          Section
8.01. Form 10-D.

          (a)
Within 15 days after each Payment Date (subject to permitted extensions under
the Exchange Act), the Trust Administrator shall prepare and file on behalf of
the Trust any Form 10-D required by the Exchange Act, in form and substance as
required by the Exchange Act. The Trust Administrator shall file each Form 10-D
with a copy of the related Monthly Statement attached thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
(“Additional Form 10-D Disclosure”) shall be reported by the parties set
forth on Exhibit M to the Depositor and the Trust Administrator and directed
and approved by the Depositor pursuant to the following paragraph, and the
Trust Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-D Disclosure, except as set forth
in the next paragraph. 

          (b)
As set forth on Exhibit M hereto, within 5 calendar days after the related
Payment Date, (i) the parties to this transaction shall be required to provide
to the Trust Administrator and

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to the
Depositor, to the extent known by a responsible officer thereof, in
EDGAR-compatible form, or in such other form as otherwise agreed upon by the
Trust Administrator and such party, the form and substance of any Additional
Form 10-D Disclosure, if applicable, together with an Additional Disclosure
Notification in the form of Exhibit P hereto (an “Additional Disclosure
Notification”) and (ii) the Depositor will approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Additional
Form 10-D Disclosure on Form 10-D. The Depositor will be responsible for any
reasonable fees and expenses assessed or incurred by the Trust Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph. 

          (c)
After preparing the Form 10-D, the Trust Administrator shall, upon request,
forward electronically a copy of the Form 10-D to the Depositor (provided that
such Form 10-D includes any Additional Form 10-D Disclosure). Within two
Business Days after receipt of such copy, but no later than the 12th
calendar day after the Payment Date, the Depositor shall notify the Trust
Administrator in writing of any changes to or approval of such Form 10-D. In
the absence of receipt of any written changes or approval, or if the Depositor
does not request a copy of a Form 10-D, the Trust Administrator shall be
entitled to assume that such Form 10-D is in final form and the Trust
Administrator may proceed with the execution and filing of the Form 10-D. A
duly authorized officer of the Depositor shall sign each Form 10-D. If a Form
10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Trust Administrator will follow the procedures set forth in
Section 8.04(b). Promptly (but no later than one Business Day) after filing
with the Commission, the Trust Administrator will make available on its
internet website a final executed copy of each Form 10-D filed by the Trust
Administrator. Each party to this Agreement acknowledges that the performance
by the Trust Administrator of its duties under this Section 8.01 related to the
timely preparation, execution and filing of Form 10-D is contingent, in part,
upon such parties strictly observing all applicable deadlines in the
performance of their duties under this Section 8.01. The Trust Administrator shall
not have any liability for any loss, expense, damage, claim arising out of or
with respect to any failure to properly prepare, execute and/or timely file
such Form 10-D, where such failure results from the Trust Administrator’s
inability or failure to obtain or receive, on a timely basis, any information
from any other party hereto needed to prepare, arrange for execution or file
such Form 10-D, not resulting from its own negligence, bad faith or willful
misconduct.

          (d)
Form 10-D requires the registrant to indicate (by checking “yes” or “no”) that
it “(1) has filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act 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.” The Depositor hereby
represents to the Trust Administrator that the Depositor has filed all such
required reports during the preceding 12 months and that it has been subject to
such filing requirement for the past 90 days. The Depositor shall notify the
Trust Administrator in writing, no later than the fifth calendar day after the
related Payment Date with respect to the filing of a report on Form 10-D if the
answer to the questions should be “no.” The Trust Administrator shall be
entitled to rely on such representations in preparing, executing and/or filing
any such report.

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          Section
8.02. Form 10-K.

          (a)
On or prior to the 90th day after the end of each fiscal year of the
Trust or such earlier date as may be required by the Exchange Act (the “10-K
Filing Deadline”) (it being understood that the fiscal year for the Trust
ends on December 31st of each year), commencing in March 2008, the
Trust Administrator shall prepare and file on behalf of the Trust a Form 10-K,
in form and substance as required by the Exchange Act. Each such Form 10-K
shall include the following items, in each case to the extent they have been
delivered to the Trust Administrator within the applicable time frames set
forth in this Agreement, (i) an annual compliance statement for the Servicer
and the Trust Administrator, (ii)(A) the annual reports on assessment of
compliance with servicing criteria for the Servicer, the Trust Administrator
and any Servicing Function Participant engaged by such parties (each, a “Reporting
Servicer”), and (B) if each Reporting Servicer’s report on assessment of
compliance with servicing criteria identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
each Reporting Servicer’s report on assessment of compliance with servicing
criteria is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm attestation report for each
Reporting Servicer, and (B) if any registered public accounting firm
attestation report identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such
registered public accounting firm attestation report is not included as an
exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, and (iv) a Sarbanes-Oxley
Certification as described in Section 8.08; provided
however, that the Trust Administrator, at its discretion, may omit
from the Form 10-K any annual compliance statement, assessment of compliance or
attestation report that is not required to be filed with such Form 10-K
pursuant to Regulation AB. Any disclosure or information in addition to (i)
through (iv) above that is required to be included on Form 10-K (“Additional
Form 10-K Disclosure”) shall be reported by the parties set forth on
Exhibit N to the Depositor and the Trust Administrator and directed and
approved by the Depositor pursuant to the following paragraph, and the Trust
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure, except as set forth
in the next paragraph. 

          (b)
As set forth on Exhibit N hereto, no later than March 15 of each year that the
Trust is subject to the Exchange Act reporting requirements, commencing in
2008, (i) the parties to this transaction shall be required to provide to the
Trust Administrator and to the Depositor, to the extent known by a responsible
officer thereof, in EDGAR-compatible form, or in such other form as otherwise
agreed upon by the Trust Administrator and such party, the form and substance
of any Additional Form 10-K Disclosure, if applicable, together with an
Additional Disclosure Notification and (ii) the Depositor will approve, as to
form and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-K Disclosure on Form 10-K. The Depositor will be responsible
for any reasonable fees and expenses assessed or incurred by the Trust
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this paragraph.

          (c)
After preparing the Form 10-K, the Trust Administrator shall, upon request,
forward electronically a copy of the Form 10-K to the Depositor. Within three
Business Days after receipt of such copy, but no later than March 25th, the
Depositor shall notify the Trust

122

Administrator
in writing of any changes to or approval of such Form 10-K. In the absence of
receipt of any written changes or approval, or if the Depositor does not
request a copy of a Form 10-K, the Trust Administrator shall be entitled to
assume that such Form 10-K is in final form and the Trust Administrator may
proceed with the execution and filing of the Form 10-K. A senior officer of the
Depositor shall sign each Form 10-K. If a Form 10-K cannot be filed on time or
if a previously filed Form 10-K needs to be amended, the Trust Administrator
will follow the procedures set forth in Section 8.04(b). Promptly (but no later
than one Business Day) after filing with the Commission, the Trust Administrator
will make available on its internet website a final executed copy of each Form
10-K filed by the Trust Administrator. The parties to this Agreement
acknowledge that the performance by the Trust Administrator of its duties under
this Section 8.02 related to the timely preparation, execution and filing of
Form 10-K is contingent, in part, upon such parties (and any Additional
Servicer or Servicing Function Participant) strictly observing all applicable
deadlines in the performance of their duties under this Section 8.02, Section
4.04(c) and (d), Section 8.05, Section 8.06 and Section 8.07. The Trust
Administrator shall not have any liability for any loss, expense, damage or
claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-K, where such failure results from the
Trust Administrator’s inability or failure to obtain or receive, on a timely
basis, any information from any other party hereto needed to prepare, arrange
for execution or file such Form 10-K, not resulting from its own negligence,
bad faith or willful misconduct.

          (d)
Form 10-K requires the registrant to indicate (by checking “yes” or “no”) that
it “(1) has filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act 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.” The Depositor hereby
represents to the Trust Administrator that the Depositor has filed all such
required reports during the preceding 12 months and that it has been subject to
such filing requirement for the past 90 days. The Depositor shall notify the
Trust Administrator in writing, no later than March 15th with
respect to the filing of a report on Form 10-K, if the answer to the questions
should be “no.” The Trust Administrator shall be entitled to rely on such
representations in preparing, executing and/or filing any such report.

          Section
8.03. Form 8-K. 

          (a)
Within four (4) Business Days after the occurrence of an event requiring
disclosure on Form 8-K (each such event, a “Reportable Event”), and if
requested by the Depositor, the Trust Administrator shall prepare and file on
behalf of the Trust any Form 8-K, as required by the Exchange Act, provided
that the Depositor shall file the initial Form 8-K in connection with the
issuance of the Notes. Any disclosure or information related to a Reportable
Event or that is otherwise required to be included on Form 8-K other than the
initial Form 8-K (“Form 8-K Disclosure Information”) shall be reported
by the parties set forth on Exhibit O to the Depositor and the Trust
Administrator and directed and approved by the Depositor pursuant to the
following paragraph, and the Trust Administrator will have no duty or liability
for any failure hereunder to determine or prepare any Form 8-K Disclosure
Information or any Form 8-K, except as set forth in the next paragraph. 

          (b)
As set forth on Exhibit O hereto, for so long as the Trust is subject to the
Exchange Act reporting requirements, no later than the close of business (New
York City time)

123

on the 2nd
Business Day after the occurrence of a Reportable Event (i) the parties to this
transaction shall be required to provide to the Trust Administrator and to the
Depositor, to the extent known by a responsible officer thereof, in
EDGAR-compatible form, or in such other form as otherwise agreed upon by the
Trust Administrator and such party, the form and substance of any Form 8-K
Disclosure Information, if applicable, together with an Additional Disclosure
Notification and (ii) the Depositor will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information. The Depositor will be responsible for any reasonable fees and
expenses assessed or incurred by the Trust Administrator in connection with any
Form 8-K Disclosure Information on Form 8-K pursuant to this paragraph. 

          (c)
After preparing the Form 8-K, the Trust Administrator shall, upon request,
forward electronically a copy of the Form 8-K to the Depositor. No later than
the close of business on the third Business Day after the Reportable Event, the
Depositor shall notify the Trust Administrator in writing of any changes to or
approval of such Form 8-K. In the absence of receipt of any written changes or
approval, or if the Depositor does not request a copy of a Form 8-K, the Trust
Administrator shall be entitled to assume that such Form 8-K is in final form
and the Trust Administrator may proceed with the execution and filing of the
Form 8-K. A duly authorized officer of the Depositor shall sign each Form 8-K
prepared by the Trust Administrator. If a Form 8-K cannot be filed on time or
if a previously filed Form 8-K needs to be amended, the Trust Administrator
will follow the procedures set forth in Section 8.04(b). Promptly (but no later
than one Business Day) after filing with the Commission, the Trust
Administrator will make available on its internet website a final executed copy
of each Form 8-K filed by the Trust Administrator. The parties to this
Agreement acknowledge that the performance by the Trust Administrator of its
duties under this Section 8.03 related to the timely preparation, execution and
filing of Form 8-K is contingent, in part, upon such parties strictly observing
all applicable deadlines in the performance of their duties under this Section
8.03. The Trust Administrator shall not have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file such Form 8-K, where such failure results
from the Trust Administrator’s inability or failure to obtain or receive, on a
timely basis, any information from any other party hereto needed to prepare,
arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.

          (d)
Within five Business Days prior to each Payment Date of each year that the
Trust is subject to the Exchange Act reporting requirements, the Depositor
shall calculate and make available to the Trust Administrator the Significance
Percentage. If the Significance Percentage meets either of the threshold levels
detailed in Item 1115(b)(1) or 1115(b)(2) of Regulation AB, the Trust
Administrator shall deliver written notification to the Depositor and the Swap
Counterparty to that effect, which notification shall include a request that
the Swap Counterparty provide Regulation AB information to the Depositor in
accordance with the terms of the Swap Agreement. The Depositor shall be
obligated to obtain from the Swap Counterparty any information required under
Regulation AB to the extent required under the Swap Agreement and to provide to
the Trust Administrator any information that may be required to be included in
any Form 10-D, Form 8-K or Form 10-K relating to the Swap Agreement or written
notification instructing the Trust Administrator that such Additional
Disclosure regarding the Swap Counterparty is not necessary for such Payment
Date. The Depositor shall be responsible for any

124

reasonable
fees and expenses assessed or incurred by the Trust Administrator in connection
with including any Additional Disclosure information pursuant to this section.

          Section
8.04. DeListing, Amendments and Late Filing.

          (a)
On or before January 30 of the first year in which the Trust Administrator is
able to do so under applicable law, the Trust Administrator shall prepare, execute
and file a Form 15 Suspension Notification relating to the automatic suspension
of reporting in respect of the Trust under the Exchange Act. 

          (b)
In the event that the Trust Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to be filed by this Agreement because required disclosure information was
either not delivered to it or delivered to it after the delivery deadlines set
forth in this Agreement or for any other reason, the Trust Administrator will
promptly notify the Depositor. In the case of Form 10-D and 10-K, the parties
to this Agreement will cooperate to prepare and file a Form 12b-25 and a 10-D/A
and 10-K/A as applicable, pursuant to Rule 12b-25 of the Exchange Act. In the
case of Form 8-K, the Trust Administrator will, upon receipt of all required
Form 8-K Disclosure Information and upon the approval and direction of the
Depositor, include such disclosure information on the next Form 10-D. In the
event that any previously filed Form 8-K, 10-D or 10-K needs to be amended in
connection with any Additional Form 10-D Disclosure (other than for the purpose
of restating any monthly report prepared pursuant to Section 5.09), Additional
Form 10-K Disclosure or Form 8-K Disclosure Information, the Trust
Administrator will electronically notify the Depositor and such other parties
to the transaction as are affected by such amendment, and such parties will
cooperate to prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form
12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by a duly
authorized officer of the Depositor. The parties to this Agreement acknowledge
that the performance by the Trust Administrator of its duties under this
Section 8.04 related to the timely preparation, execution and filing of Form
15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent, in
part, upon each such party performing its duties under this Section. The Trust
Administrator shall not have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file any such Form 15, Form 12b-25 or any amendments to Forms
8-K, 10-D or 10-K, where such failure results from the Trust Administrator’s
inability or failure to obtain or receive, on a timely basis, any information
from any other party hereto needed to prepare, arrange for execution or file
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not
resulting from its own negligence, bad faith or willful misconduct.

          Section
8.05. Annual Statement of Compliance. 

          (a)
The Trust Administrator shall deliver (or otherwise make available) (and the
Trust Administrator shall cause any Servicing Function Participant engaged by
it to deliver) to the Depositor and the Trust Administrator on or before March
1 (with a ten-calendar day cure period) of each year, commencing in March 2008,
an Officer’s Certificate stating, as to the signer thereof, that (A) a review
of such party’s activities during the preceding calendar year or portion
thereof and of such party’s performance under this Agreement, or such other
applicable agreement in the case of a Servicing Function Participant, has been
made under such officer’s

125

supervision
and (B) to the best of such officer’s knowledge, based on such review, such
party has fulfilled all its obligations under this Agreement, or such other
applicable agreement in the case of an Additional Servicer, in all material
respects throughout such year or portion thereof, or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof. 

          (b)
In the event the Trust Administrator or any Servicing Function Participant
engaged by it is terminated or resigns pursuant to the terms of this Agreement,
or any applicable agreement in the case of a Servicing Function Participant, as
the case may be, such party shall provide an Officer’s Certificate pursuant to
this Section 8.05 for such partial year, notwithstanding such termination or
resignation.

          Section
8.06. Annual Assessment. 

          (a)
By March 1 (with a ten-calendar day cure period) of each year, commencing in
March 2008, the Trust Administrator, at its own expense, shall furnish or
otherwise make available, and each such party shall cause any Servicing
Function Participant engaged by it to furnish, each at its own expense, to the
Trust Administrator and the Depositor, a report on an assessment of compliance
with the Relevant Servicing Criteria that contains (A) a statement by such
party of its responsibility for assessing compliance with the Relevant
Servicing Criteria, (B) a statement that such party used the Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria, (C) such
party’s assessment of compliance with the Relevant Servicing Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 8.08, including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, and (D) a statement that a
registered public accounting firm has issued an attestation report on such
party’s assessment of compliance with the Relevant Servicing Criteria as of and
for such period. 

          (b)
No later than March 15 of each fiscal year for the Trust for which a 10-K is
required to be filed, the Trust Administrator and the Servicer shall forward to
the Depositor the name of each Servicing Function Participant engaged by it and
what Relevant Servicing Criteria will be addressed in the report on assessment
of compliance prepared by such Servicing Function Participant. When the Trust
Administrator or Servicer (or any Servicing Function Participant engaged by
them) submits its assessments to the Depositor, such parties will also at such
time include the assessment and attestation of each Servicing Function
Participant engaged by it.

          (c)
Promptly after receipt of each report on assessment of compliance provided
pursuant to this Agreement and the Custodial Agreement, (i) the Depositor shall
review each such report and, if applicable, consult with the Trust
Administrator, the Servicer, the Custodian and any Servicing Function
Participant engaged by such parties as to the nature of any material instance
of noncompliance with the Relevant Servicing Criteria by each such party, and
(ii) the Trust Administrator shall confirm that the assessments, taken as a
whole, address all of the Servicing Criteria and taken individually address the
Relevant Servicing Criteria for each party as set forth on Exhibit L or Exhibit
L-1, as applicable, and notify the Depositor of any exceptions. 

126

          (d)
In the event the Trust Administrator or any Servicing Function Participant
engaged by such parties is terminated, assigns its rights and obligations
under, or resigns pursuant to, the terms of this Agreement, or any other
applicable agreement, as the case may be, such party shall provide a report on
assessment of compliance pursuant to this Section 8.06 for such partial year,
or to such other applicable agreement, notwithstanding any such termination,
assignment or resignation.

          Section
8.07. Attestation.

          (a)
By March 1 (with a ten-calendar day cure period) of each year, commencing in
March 2008, the Trust Administrator, at its own expense, shall cause, and each
such party shall cause any Servicing Function Participant engaged by it to
cause, each at its own expense, a registered public accounting firm (which may
also render other services to the Servicer, the Trust Administrator, or such
other Servicing Function Participants, as the case may be) and that is a member
of the American Institute of Certified Public Accountants to furnish an
attestation report to the Trust Administrator and the Depositor, to the effect
that (i) it has obtained a representation regarding certain matters from the
management of such party, which includes an assertion that such party has
complied with the Relevant Servicing Criteria, and (ii) on the basis of an
examination conducted by such firm in accordance with standards for attestation
engagements issued or adopted by the PCAOB, it is expressing an opinion as to
whether such party’s compliance with the Relevant Servicing Criteria was fairly
stated in all material respects, or it cannot express an overall opinion
regarding such party’s assessment of compliance with the Relevant Servicing
Criteria. In the event that an overall opinion cannot be expressed, such
registered public accounting firm shall state in such report why it was unable
to express such an opinion. Such report must be available for general use and
not contain restricted use language. 

          (b)
Promptly after receipt of each such assessment of compliance and attestation
report, the Trust Administrator shall confirm that each assessment submitted
pursuant to Section 4.04(e) and this Section 8.07 is coupled with an
attestation meeting the requirements of this Agreement and notify the Depositor
of any exceptions. 

          (c)
In the event the Trust Administrator or any Servicing Function Participant
engaged by parties is terminated, assigns its rights and duties under, or
resigns pursuant to the terms of, this Agreement, or sub-servicing agreement,
as the case may be, such party shall cause a registered public accounting firm
to provide an attestation pursuant to this Section 8.07 for such partial year
notwithstanding any such termination, assignment or resignation.

          Section
8.08. Sarbanes-Oxley Certification. 

          (a)
Each Form 10-K shall include a Sarbanes-Oxley Certification, required to be
included therewith pursuant to the Sarbanes-Oxley Act. The Trust Administrator
shall provide, and shall cause any Servicing Function Participant engaged by it
to provide, to the Person who signs the Sarbanes-Oxley Certification (the “Certifying
Person”), by March 15 of each year in which the Trust is subject to the
reporting requirements of the Exchange Act and otherwise within a reasonable
period of time upon request, a certification (each, a “Back-Up Certification”),
in the form attached hereto as Exhibit Q, upon which the Certifying Person, the
entity for which the Certifying Person acts as an officer, and such entity’s
officers, directors and

127

Affiliates
(collectively with the Certifying Person, “Certification Parties”) can
reasonably rely. The senior officer of the Depositor shall serve as the Certifying
Person on behalf of the Trust. In the event any such party or any Servicing
Function Participant engaged by such party is terminated or resigns pursuant to
the terms of this Agreement, or any applicable sub-servicing agreement, as the
case may be, such party shall provide a Back-Up Certification to the Certifying
Person pursuant to this Section 8.08 notwithstanding any such termination or
resignation. 

          Section
8.09. Notices.

          Any
notice required to be delivered by the Trust Administrator to the Depositor
pursuant to the Regulation AB Provisions, the Trust Administrator may deliver
such notice, notwithstanding any provision of this Agreement to the contrary,
via facsimile to (410) 772-7299 or telephonically by calling (410) 772-7288.

          Section
8.10. Additional Information.

          Each
of the parties hereto agrees to provide to the Trust Administrator such
additional information related to such party as the Trust Administrator may
reasonably request, including evidence of the authorization of the person
signing any certificate or statement, financial information and reports, and
such other information related to such party or its performance hereunder. For
purposes of reporting and disclosure pursuant to Item 1119 of Regulation AB, a
listing of each party to this transaction is attached as Exhibit R. In
the event that there is a change in the identity of any transaction party, the
Depositor shall distribute to the parties hereto and the Owner Trustee a
revised Exhibit R reflecting the current transaction parties. 

          Section
8.11. Intention of the Parties and Interpretation.

          Each
of the parties hereto acknowledges and agrees that the purpose of the Reg AB
Provisions of this Agreement is to facilitate compliance by the Depositor and
the Trust Administrator with the provisions of Regulation AB promulgated by the
SEC under the Exchange Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be
amended from time to time and subject to clarification and interpretive advice
as may be issued by the staff of the SEC from time to time. Therefore, each of
the parties hereto agrees that (a) the obligations of the parties hereunder
shall be interpreted in such a manner as to accomplish that purpose, (b) the
parties’ obligations hereunder will be supplemented and modified as necessary
to be consistent with any such amendments, interpretive advice or guidance,
convention or consensus among active participants in the asset-backed
securities markets, advice of counsel, or otherwise in respect of the
requirements of Regulation AB, (c) the parties hereto shall comply with
requests made by the Depositor and the Trust Administrator for delivery of
additional or different information as the Depositor and the Trust
Administrator may determine in good faith is necessary to comply with the
provisions of Regulation AB, and (d) no amendment of this Agreement shall be
required to effect any such changes in the parties’ obligations as are
necessary to accommodate evolving interpretations of the provisions of
Regulation AB.

          Section
8.12. Indemnification.

          Each
of the Depositor, Trust Administrator, Servicer, and any Servicing Function
Participant engaged by such party, respectively, shall indemnify and hold
harmless the Trust

128

Administrator,
the Indenture Trustee and the Depositor, respectively, and each of its
directors, officers, employees, agents, and affiliates from and against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of
or based upon (a) any breach by such party of any if its obligations under
hereunder, including particularly its obligations to provide any assessment of
compliance, attestation report, compliance statement or any information, data
or materials required to be included in any Exchange Act report, (b) any
material misstatement or omission in any information, data or materials
provided by such party (or, in the case of the Trust Administrator, any
material misstatement or material omission in (i) any Compliance Statement,
Assessment of Compliance or Attestation Report delivered by it, or by any
Servicing Function Participant engaged by it, pursuant to this Agreement, or
(ii) any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or
Form 8-K Disclosure concerning the Trust Administrator, or (c) the negligence,
bad faith or willful misconduct of such indemnifying party in connection with
its performance hereunder. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Trust Administrator or the
Depositor, as the case may be, then each such party agrees that it shall
contribute to the amount paid or payable by the Trust Administrator or the Depositor,
as applicable, as a result of any claims, losses, damages or liabilities
incurred by such party in such proportion as is appropriate to reflect the
relative fault of the indemnified party on the one hand and the indemnifying
party on the other. This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement. 

ARTICLE IX

TERMINATION

          Section
9.01. Termination. The respective obligations and responsibilities of
the Trust Administrator, the Depositor, the Issuing Entity, the Servicer and
the Indenture Trustee created hereby (other than obligations expressly stated
to survive the termination of the Trust) shall terminate on the day after the
day on which the Notes are paid in full (including payment pursuant to Section
9.02 below) (the “Termination Date”).

          Section
9.02. Termination Prior to Maturity Date; and Optional Redemption. On
any Payment Date on which the Aggregate Collateral Balance at the beginning of
the Due Period related to that Payment Date is less than 20% of the sum of the
Aggregate Collateral Balance as of the Closing Date, the Servicer, acting
directly or through one or more Affiliates, shall have the option to purchase
the Mortgage Loans, any REO Property and any other property remaining in the
Trust for a price equal to the Redemption Price. The Servicer, the Trust
Administrator, the Owner Trustee and the Indenture Trustee shall be reimbursed
for any previously unreimbursed amounts for which they are entitled to be reimbursed
pursuant to this Agreement, the Indenture or the Trust Agreement, as
applicable. If such option is exercised, the Trust will be terminated resulting
in a mandatory redemption of the Notes. The Servicer shall deliver written
notice of its intention to exercise such option to the Issuing Entity, the Swap
Counterparty, the Trust Administrator and the Indenture Trustee not less than
15 days prior to the applicable Payment Date. If the Servicer fails to exercise
such option prior to the Stepup Date, the Interest Rate for each Class of Notes
will be increased as set forth in the table in the Preliminary Statement herein
beginning on the Stepup Date and for each Payment Date thereafter. 

129

          In
connection with such purchase, the Servicer shall remit to the Trust
Administrator all amounts then on deposit in the Custodial Account in respect
of the related Total Remittance Amount for deposit to the Collection Account,
which deposit shall be deemed to have occurred immediately preceding such purchase.

          Promptly
following any such purchase pursuant to the first paragraph of this Section
9.02, the Indenture Trustee or the applicable Custodian shall release the
Mortgage Files to the purchaser of such Mortgage Loans pursuant to this Section
9.02, or otherwise upon its order.

          Section
9.03. Certain Notices upon Final Payment. The Trust Administrator shall
give the Issuing Entity, the Indenture Trustee, the Owner Trustee, each Rating
Agency, each Noteholder and the Depositor at least ten days’ prior written
notice of the date on which the Trust is expected to terminate in accordance
with Section 9.01. The Trust Administrator shall mail to the Noteholders a
notice specifying the procedures with respect to such final payment, which
notice may be combined with the notice required by the preceding sentence. The
Trust Administrator on behalf of the Indenture Trustee shall give a copy of
such notice to each Rating Agency at the time such notice is given to
Noteholders. Following the final payment thereon, such Notes shall become void,
no longer outstanding and no longer evidence any right or interest in the
Mortgage Loans, the Mortgage Files or any proceeds of the foregoing.

          Section
9.04. Beneficiaries. This Agreement will inure to the benefit of and be
binding upon the parties hereto, the Noteholders, and their respective
successors and permitted assigns. No other Person will have any right or
obligation hereunder. Notwithstanding anything to the contrary herein, the Swap
Counterparty is an express third party beneficiary of this Agreement.

ARTICLE X

MISCELLANEOUS PROVISIONS

          Section
10.01. Binding Nature of Agreement; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

          Section
10.02. Entire Agreement. This Agreement contains the entire agreement
and understanding among the parties hereto 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.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof.

          Section
10.03. Amendment. 

          (a)
This Agreement may be amended from time to time by the parties hereto and the
Holder of the Ownership Certificate and with the prior written consent of the Swap
Counterparty (but only to the extent the Swap Agreement is still in effect and
such amendment materially adversely affects the rights of the Swap Counterparty
under the Swap Agreement), without notice to or the consent of any of the
Holders of the Notes, (i) to cure any ambiguity, (ii) to cause the provisions
herein to conform to or be consistent with or in furtherance of the statements
made

130

with respect
to the Notes, the Trust or this Agreement in any Offering Document, (iii) to
correct or supplement any provision herein which may be inconsistent with any
other provisions herein or in any other Operative Agreement, or to make any
other provisions with respect to matters or questions arising under this
Agreement, provided that such amendment does not adversely affect any Holder in
any material respect, or (iv) to add, delete, or amend any provisions to the
extent necessary or desirable to comply with any requirements imposed by the
Code or ERISA and applicable regulations. No such amendment effected pursuant
to the preceding sentence shall, as evidenced by an Opinion of Counsel (which
shall be an expense of the party requesting such amendment and shall not be an
expense of the Trust), adversely
affect the status of the Notes as debt for federal income tax purposes
or result in an entity level tax on the Trust. In addition, no such amendment
shall modify Section 6.02 or the definitions of “Interest Funds,” “Principal
Funds” or “Monthly Excess Cashflow” without the prior written consent of the
Swap Counterparty so long as all outstanding payments by the Swap Counterparty
under the Swap Agreement have been paid. Prior to entering into any amendment
without the consent of Holders pursuant to this paragraph, the Indenture
Trustee may require an Opinion of Counsel (at the expense of the party
requesting such amendment) to the effect that such amendment is permitted under
this paragraph; provided that any such Opinion of Counsel in respect of an
amendment pursuant to clause (iii) above need not address whether such
amendment adversely affects any Holder, provided that the Person requesting the
amendment obtains written confirmation from each Rating Agency stating that
such amendment will not result in the downgrading or withdrawal of the then
current rating assigned to the Notes.

          (b)
This Agreement may also be amended from time to time by the parties hereto and
with the prior written consent of the Swap Counterparty (but only to the extent
such amendment materially adversely affects the rights of the Swap Counterparty
under the Swap Agreement and for so long as the Swap Agreement is in effect),
with the consent of the Noteholders representing 662/3% Voting
Interests 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; provided,
however, that
no such amendment may (i) reduce in any manner the amount of, or delay the
timing of, payments which are required to be paid on any Class of Notes or
under the Swap Agreement, without the consent of the Noteholders of such Class
or the Swap Counterparty, respectively, or (ii) reduce the aforesaid
percentages of Class Principal Amount of Notes, the Holders of which are
required to consent to any such amendment without the consent of the Holders of
100% of the Class Principal Amount of the Notes. For purposes of this
paragraph, references to “Holder” or “Holders” shall be deemed to include, in
the case of Book-Entry Notes, the related Note Owners; provided further, however, that
no such amendment may be made with respect to Section 6.02(b) or (c) or the
definition of “Interest Funds” without the prior written consent of the Swap
Counterparty but only for so long as the Swap Agreement is in effect.

          (c)
Promptly after the execution of any such amendment, the Indenture Trustee shall
furnish written notification of the substance of such amendment to each Holder,
the Depositor and to each Rating Agency.

          (d)
It shall not be necessary for the consent of Holders under this Section 10.03
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

131

the
authorization of the execution thereof by Holders shall be subject to such
reasonable regulations as the Indenture Trustee may prescribe.

          (e)
Nothing in this Agreement shall require the Indenture Trustee to enter into an
amendment without first having received an Opinion of Counsel, satisfactory to
the Indenture Trustee, that such amendment is authorized or permitted by this
Agreement. The Indenture Trustee may, but shall not be obligated to, enter into
any amendment pursuant to this Section 10.03 that affects its rights, duties or
immunities under this Agreement.

          (f)
Notwithstanding the foregoing, the Trust Administrator shall not consent to any
amendment or supplement to this Agreement without the prior written consent of
the Swap Counterparty; provided
that such consent may be deemed to the extent that the Swap Counterparty does
not provide notice to the Trust Administrator within the time period specified
in the Swap Agreement. The Trust Administrator shall furnish to the Swap Counterparty
a copy of each proposed and each executed amendment or supplement and copies of
any related Rating Agency confirmation.

          Section
10.04. Acts of Noteholders. Except as otherwise specifically provided
herein, whenever Noteholder action, consent or approval is required under this
Agreement, such action, consent or approval shall be deemed to have been taken
or given on behalf of, and shall be binding upon, all Noteholders if the
Majority Noteholders agree to take such action or give such consent or
approval.

          Section
10.05. Recordation of Agreement. To the extent permitted by applicable
law, this Agreement, or a memorandum thereof if permitted under applicable law,
is subject to recordation in all appropriate public offices for real property
records in all of 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 on direction and at the expense of Holders of not
less than 66-2/3% of the Note Principal Balance of the Notes and of the Holder
of the Ownership Certificate requesting such recordation, but only when
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Noteholders, or is
necessary for the administration or servicing of the Mortgage Loans.

          Section
10.06. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND 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 WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW
YORK (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH
SHALL APPLY HERETO).

          Section
10.07. Notices. All demands, notices and communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed by
overnight courier, addressed as follows or delivered by facsimile (or such
other address as may hereafter be furnished to the other party by like notice):

132

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
if to the
  Seller:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Fieldstone
  Investment Corporation

	
 

	
 

	
 

	
11000 Broken
  Land Parkway, Suite 600

	
 

	
 

	
 

	
Columbia,
  Maryland 21044

	
 

	
 

	
 

	
Attention:
  Senior Vice President—Investment Portfolio

	
 

	
 

	
 

	
Telephone:
  (410) 772-7288

	
 

	
 

	
 

	
Facsimile:
  (410) 772-7299

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
with a copy
  to:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Fieldstone Mortgage Investment
Corporation

	
 

	
 

	
 

	
11000 Broken Land Parkway, Suite 600

	
 

	
 

	
 

	
Columbia, Maryland 21044

	
 

	
 

	
 

	
Attention: Legal Department

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
if to the
  Servicer:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Litton Loan
  Servicing LP

	
 

	
 

	
 

	
4828 Loop
  Central Drive

	
 

	
 

	
 

	
Houston,
  Texas 77081

	
 

	
 

	
 

	
Attention:
  Janice McClure

	
 

	
 

	
 

	
Facsimile:
  (713) 960-0539

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
if to the
  Trust Administrator and the Indenture Trustee:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Wells Fargo
  Bank, N.A.

	
 

	
 

	
 

	
P.O. Box 98

	
 

	
 

	
 

	
Columbia,
  Maryland 21046

	
 

	
 

	
 

	
Attention:
  Client Service Manager - Fieldstone 2007-1

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(or in the
  case of overnight deliveries,

	
 

	
 

	
 

	
9062 Old
  Annapolis Road

	
 

	
 

	
 

	
Columbia,
  Maryland 21045)

	
 

	
 

	
 

	
Telephone:
  (410) 884-2000

	
 

	
 

	
 

	
Facsimile:
  (410) 715-2380

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
if to the
  Depositor:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Fieldstone
  Mortgage Investment Corporation

	
 

	
 

	
 

	
11000 Broken
  Land Parkway, Suite 600

	
 

	
 

	
 

	
Columbia,
  Maryland 21045

	
 

	
 

	
 

	
Attention:
  President

	
 

	
 

	
 

	
Telephone:
  (410) 772-7288

	
 

	
 

	
 

	
Facsimile:
  (410) 772-7299

	
 

	
 

	
 

	
 

	
 

	
 

	
(v)

	
if to the
  Issuing Entity:

133

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Fieldstone
  Mortgage Investment Trust, Series 2007-1

	
 

	
 

	
 

	
c/o U.S.
  Bank Trust National Association

	
 

	
 

	
 

	
300 Delaware
  Avenue, 9th Floor

	
 

	
 

	
 

	
Wilmington,
  Delaware 19801

	
 

	
 

	
 

	
Attention:
  Corporate Trust Services

	
 

	
 

	
 

	
 

	
 

	
 

	
(vi)

	
if to the
  Swap Counterparty:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
JPMorgan
  Chase Bank, National Association

	
 

	
 

	
 

	
270 Park
  Avenue

	
 

	
 

	
 

	
New York,
  New York 10017

          All
demands, notices and communications to a party hereunder shall be in writing
and shall be deemed to have been duly given when delivered to such party at the
relevant address, facsimile number or electronic mail address set forth above
or at such other address, facsimile number or electronic mail address as such
party may designate from time to time by written notice in accordance with this
Section 10.07. 

          Section
10.08. 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 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 Notes or the
rights of the Holders thereof. 

          Section
10.09. Indulgences; No Waivers. Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver. 

          Section
10.10. Headings Not To Affect Interpretation. The headings contained in
this Agreement are for convenience of reference only, and they shall not be
used in the interpretation hereof. 

          Section
10.11. Benefits of Agreement. Nothing in this Agreement or in the Notes,
express or implied, shall give to any Person, other than the parties to this
Agreement and their successors hereunder and the Holders of the Notes, any
benefit or any legal or equitable right, power, remedy or claim under this
Agreement. Notwithstanding the foregoing, the Owner Trustee and the Swap
Counterparty shall each be an express third-party beneficiary of this
Agreement. 

          Section
10.12. Special Notices to the Rating Agencies. 

134

          (a)
The Seller shall give prompt notice to each Rating Agency and the Swap
Counterparty of the occurrence of any of the following events of which it has
notice: 

	
 

	
 

	
 

	
 

	
(i)

	
any
  amendment to this Agreement pursuant to Section 10.03; and 

	
 

	
 

	
 

	
 

	
(ii)

	
the making
  of a final payment hereunder. 

          (b)
All notices to the Rating Agencies provided for by this Section shall be in
writing and sent by first class mail, telecopy or overnight courier, as
follows: 

	
 

	
 

	
if to
  Moody’s:

	
 

	
 

	
Moody’s
  Investors Service, Inc.

	
 

	
99 Church
  Street

	
 

	
New York,
  New York 10004

	
 

	
Fax no.:
  (212) 553-4392

	
 

	
 

	
if to
  S&P:

	
 

	
 

	
Standard
  & Poor’s Ratings Services, a division

	
 

	
of The
  McGraw-Hill Companies, Inc.

	
 

	
55 Water
  Street

	
 

	
New York,
  New York 10041

	
 

	
Fax no.:
  (212) 438-2661

          (c)
The Trust Administrator shall make available to the Rating Agencies each report
prepared pursuant to Section 5.09.

          Section
10.13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument. 

          Section
10.14. Execution by the Issuing Entity. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by U.S. Bank Trust National Association, not individually or personally but
solely as Owner Trustee of the Issuing Entity, in the exercise of the powers
and authority conferred and vested in it as trustee, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuing Entity is made and intended not as personal representations,
undertakings and agreements by U.S. Bank Trust National Association but is made
and intended for the purpose of binding only the Issuing Entity, (c) nothing
herein contained shall be construed as creating any liability on U.S. Bank
Trust National Association, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any person claiming by, through
or under the parties hereto and (d) under no circumstances shall U.S. Bank
Trust National Association be personally liable for the payment of any
indebtedness or expenses of the Issuing Entity or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Issuing Entity under this Agreement or any other document. 

135

          IN
WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto
by their respective officers hereunto duly authorized as of the day and year
first above written. 

	
 

	
 

	
 

	
 

	
 

	
FIELDSTONE MORTGAGE INVESTMENT TRUST,

	
 

	
SERIES 2007-1, as Issuing Entity

	
 

	
 

	
 

	
 

	
 

	
By:

	
U.S. BANK TRUST NATIONAL ASSOCIATION,

	
 

	
 

	
 

	
not in its
  individual capacity but solely as Owner

	
 

	
 

	
 

	
Trustee

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Charles
  F. Pedersen

	
 

	
 

	

	
 

	
Name:

	
Charles F.
  Pedersen

	
 

	
Title:

	
Vice
  President

	
 

	
 

	
 

	
 

	
 

	
FIELDSTONE MORTGAGE INVESTMENT

	
 

	
CORPORATION,

	
 

	
as Depositor

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ John C.
  Kendall

	
 

	
 

	

	
 

	
Name:

	
John C.
  Kendall

	
 

	
Title:

	
President

	
 

	
 

	
 

	
 

	
 

	
WELLS FARGO BANK, N.A.,

	
 

	
as Trust
  Administrator and Indenture Trustee

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Carla S.
  Walker

	
 

	
 

	

	
 

	
Name:

	
Carla
  S.Walker

	
 

	
Title:

	
Vice
  President

(Signature Page One to Transfer and Servicing
Agreement Fieldstone 2007-1)

	
 

	
 

	
 

	
 

	
 

	
LITTON LOAN SERVICING LP

	
 

	
as Servicer

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Janice McClure

	
 

	
 

	

	
 

	
Name: 

	
Janice McClure

	
 

	
Title: 

	
Senior Vice President

	
 

	
 

	
 

	
 

	
 

	
FIELDSTONE INVESTMENT CORPORATION, as

	
 

	
Seller

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ John C.
  Kendall

	
 

	
 

	

	
 

	
Name:

	
John C.
  Kendall

	
 

	
Title:

	
Executive
  Vice President

(Signature Page Two to Transfer and Servicing
Agreement Fieldstone 2007-1)

	
 

	
 

	
STATE OF
  MINNESOTA 

	
)

	
 

	
: ss.: 

	
COUNTY OF
  RAMSEY

	
)

          On
this 12th day of April, 2007, before me, personally appeared Charles F.
Pedersen, known to me to be a Vice President of U.S. Bank Trust 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. 

	
 

	
 

	
 

	
/s/ Tiffany
  M. Jeanson 

	
 

	

	
 

	
Notary
  Public

[NOTARIAL
SEAL] 

	
 

	
 

	
STATE OF
  MARYLAND 

	
)

	
 

	
: ss.: 

	
COUNTY OF
  HOWARD 

	
)

          On
the 11th day of April, 2007, before me, personally appeared John Kendall, known
to me to be a President of Fieldstone Mortgage Investment Corporation, a
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. 

	
 

	
 

	
 

	
/s/ Janet
  Rudolph

	
 

	

	
 

	
Notary
  Public

[NOTARIAL
SEAL]

	
 

	
 

	
STATE OF
  MARYLAND

	
)

	
 

	
: ss.:

	
COUNTY OF
  Howard

	
)

          On
the 12th day of April, 2007, before me, a Notary Public in and for said State,
personally appeared Carla S. Walker, known to me to be a Vice President of
Wells Fargo Bank, National Association, one of the national banking
associations 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.

	
 

	
 

	
 

	
Graham M.
  Oglesby

	
 

	

	
 

	
Notary
  Public

	
 

	
 

	
[NOTARIAL
  SEAL]

	
 

	
 

	
 

	
STATE OF
  TEXAS 

	
)

	
 

	
: ss.:

	
COUNTY OF
  HARRIS 

	
)

          On
the 12th day of April, 2007, before me, a Notary Public in and for said State,
personally appeared Janice McClure known to me to be a Senior Vice President of
Litton Loan Servicing LP, a limited partnership that executed the within
instrument and also known to me to be the person who executed it on behalf of
said limited partnership, and acknowledged to me that such limited partnership
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. 

	
 

	
 

	
 

	
/s/ Tammy
  Kaye Jones 

	
 

	

	
 

	
Notary
  Public 

[NOTARIAL
SEAL]

	
 

	
 

	
STATE OF
  MARYLAND

	
)

	
 

	
: ss.:

	
COUNTY OF
  HOWARD 

	
)

          On
the 12th day of April, 2007, before me, a Notary Public in and for said State,
personally appeared John Kendall known to me to be an Executive Vice President
of Fieldstone Investment Corporation, a 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. 

	
 

	
 

	
 

	
/s/ Janet
  Rudolph

	
 

	

	
 

	
Notary
  Public

[NOTARIAL SEAL]

EXHIBIT A-1

FORM OF INITIAL CERTIFICATION

Date

Wells Fargo
Bank, N.A.

9002 Old Annapolis Road

Columbia, MD 21045 

Attention: Client Manager - Fieldstone 2007-1

Fieldstone
Mortgage Investment Corporation

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

Attention:

	
 

	
 

	
 

	
 

	
Re:

	
Transfer and
  Servicing Agreement (the “Transfer and Servicing Agreement”) dated as of
  April 1, 2007 by and among Fieldstone Mortgage Investment Corporation, as
  Depositor, Wells Fargo Bank, N.A., as Trust Administrator and Indenture
  Trustee, Fieldstone Mortgage Investment Trust, Series 2007-1, as Issuing
  Entity, Litton Loan Servicing LP, as Servicer, and Fieldstone Investment
  Corporation, as Seller

Ladies and
Gentlemen:

          In
accordance with Section 2.02(a) of the Transfer and Servicing Agreement,
subject to review of the contents thereof, the undersigned, as Custodian,
hereby certifies that it has received the documents listed in Section 2.0 1(b)
of the Transfer and Servicing Agreement for each Mortgage File pertaining to
each Mortgage Loan listed on Schedule A, to the Transfer and Servicing
Agreement, subject to any exceptions noted on Schedule I hereto.

Capitalized
words and phrases used herein and not otherwise defined herein shall have the
respective meanings assigned to them in the Transfer and Servicing Agreement.
This certificate is subject in all respects to the terms of Section 2.02 of the
Transfer and Servicing Agreement and the sections cross-referenced therein.

	
 

	
 

	
 

	
 

	
 

	
 

	
[Custodian]

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

A-1

EXHIBIT A-2

FORM OF INTERIM CERTIFICATION

Date

Wells Fargo
Bank, N.A.

9002 Old Annapolis Road

Columbia, MD 21045

Attention: Client Manager - Fieldstone 2007-1

Fieldstone
Mortgage Investment Corporation

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

Attention:

	
 

	
 

	
 

	
 

	
Re:

	
Transfer and
  Servicing Agreement (the “Transfer and Servicing Agreement”) dated as of
  April 1, 2007 by and among Fieldstone Mortgage Investment Corporation, as
  Depositor, Wells Fargo Bank, N.A., as Trust Administrator and Indenture
  Trustee, Fieldstone Mortgage Investment Trust, Series 2007-1, as Issuing
  Entity, Litton Loan Servicing LP, as Servicer, and Fieldstone Investment
  Corporation, as Seller

Ladies and
Gentlemen:

          In
accordance with Section 2.02(b) of the Transfer and Servicing Agreement, the
undersigned, as Custodian, 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(b) of the Transfer 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 identified above and has determined that
each such document appears regular on its face and appears to relate to the
Mortgage Loan identified in such document.

          Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the Transfer and Servicing Agreement. This certificate is qualified in
all respects by the terms of said Transfer and Servicing Agreement including,
but not limited to, Section 2.02(b).

	
 

	
 

	
 

	
 

	
 

	
 

	
[Custodian]

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

A-2-1

EXHIBIT A-3

FORM OF FINAL CERTIFICATION

Date

Wells Fargo
Bank, N.A.

9002 Old Annapolis Road

Columbia, MD 21045

Attention: Client Manager - Fieldstone 2007-1

Fieldstone
Mortgage Investment Corporation

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

Attention:

	
 

	
 

	
 

	
 

	
Re:

	
Transfer and
  Servicing Agreement (the “Transfer and Servicing Agreement”) dated as of
  April 1, 2007 by and among Fieldstone Mortgage Investment Corporation, as
  Depositor, Wells Fargo Bank, N.A., as Trust Administrator and Indenture
  Trustee, Fieldstone Mortgage Investment Trust, Series 2007-1, as Issuing
  Entity, Litton Loan Servicing LP, as Servicer, and Fieldstone Investment
  Corporation, as Seller

Ladies and Gentlemen:

          In
accordance with Section 2.02(d) of the Transfer and Servicing Agreement, the
undersigned, as Custodian on behalf of the Indenture 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(b) of
the Transfer 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.

          Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the Transfer and Servicing Agreement. This certificate is qualified in all
respects by the terms of said Transfer and Servicing Agreement.

	
 

	
 

	
 

	
 

	
 

	
 

	
[Custodian]

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

A-3-1

EXHIBIT A-4

FORM OF ENDORSEMENT

          Pay
to the order of Wells Fargo Bank, N.A., as indenture trustee (the “Indenture
Trustee”) under the Transfer and Servicing Agreement dated as of April 1, 2007
by and among Fieldstone Mortgage Investment Corporation, as Depositor, the
Indenture Trustee, Wells Fargo Bank, N.A., as Trust Administrator and Indenture
Trustee, Fieldstone Mortgage Investment Trust, Series 2007-1, as Issuing
Entity, Litton Loan Servicing LP, as Servicer, and Fieldstone Investment
Corporation, as Seller, relating to Fieldstone Mortgage Investment Trust,
Series 2007-1 Mortgage-Backed Notes, without recourse.

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
[current
  signatory on note]

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

A-4-1

EXHIBIT B-1

FORM OF SWAP AGREEMENT

B-1-1

EXHIBIT B-2

[RESERVED]

B-2-1

EXHIBIT C

FORM OF LOST NOTE AFFIDAVIT

	
 

	
 

	
 

	
I,
  _____________________________, being duly sworn, do hereby state under oath
  that:

	
 

	
 

	
1.

	
I, as
  __________________ of___________________________ (the “Company”), am
  authorized to make this Affidavit on behalf of the Company.

	
 

	
 

	
2.

	
The Company
  received the following described mortgage note (the “Note”):

	
 

	
 

	
 

	
Loan No.:

	
 

	
 

	
 

	
Borrower(s):

	
 

	
 

	
 

	
Original
  Principal Amount:

	
 

	
 

	
 

	
from the
  Borrower(s) to secure a Deed of Trust/Mortgage (the “Deed of Trust/Mortgage”)
  dated ______________ from the Borrower(s) to the Company.

	
 

	
 

	
3.

	
The Company
  represents and warrants that it has not canceled, altered, assigned, or
  hypothecated the Note.

	
 

	
 

	
4.

	
The original
  Note, a true and correct copy of which is attached hereto, was not located
  after a thorough and diligent search, and based thereon, the Company declares
  the Note lost.

	
 

	
 

	
5.

	
This Affidavit
  is intended to be relied on by the Indenture Trustee and its successors and
  assigns.

	
 

	
 

	
6.

	
The Company
  has assigned all of its right, title and interest in the Note and the Deed of
  Trust/Mortgage to the Indenture Trustee and agrees immediately and without
  further consideration to surrender the original Note to the Indenture Trustee
  or its successor and assigns if such original Note ever comes into the
  Company’s possession, custody, or power.

	
 

	
 

	
7.

	
The Company
  further agrees to indemnify and hold harmless the Indenture Trustee and its
  successors and assigns from any and all loss, liability, costs, damages,
  reasonable attorneys’ fees and expenses without limitation in connection with
  or arising out of the representations, warranties, and agreements made in
  this Affidavit and any claim of any nature made by any entity with respect to
  the Note.

	
 

	
 

	
8.

	
The Company
  agrees and acknowledges that this Affidavit may be presented as evidence of
  the Note, whether in any proceeding or action with respect thereto or
  otherwise, and hereby authorizes such use of this Affidavit.

	
 

	
 

	
9.

	
The
  representations, warranties, and agreements herein shall bind the undersigned
  and its successors and assigns, and shall inure to the benefit of the
  Indenture Trustee and its successors and assigns.

C-1

EXECUTED THIS
______ day of ____________, 2006 on behalf of_______________

	
 

	
 

	
 

	
 

	

	
 

	
 

	
By:

	
 

	
 

	
Its:

	
 

	
 

	
 

	
STATE OF _____________________ 

	
)

	
 

	
) ss:

	
COUNTY OF ___________________ 

	
)

          On
the _____ day of ______________, 2006, before me, _____________________, a
notary public in and for said State, personally appeared
___________________________ personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the
instrument.

          WITNESS
my hand and official seal.

	
 

	
 

	
 

	

	
 

	
Notary
  Public

My Commission
Expires: 

C-2

EXHIBIT D

CUSTODIAL AGREEMENT

D-1

EXHIBIT E

CUSTODIAL ACCOUNT LETTER AGREEMENT

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
_________________________

	
 

	
 

	
 

	
 

	
To: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
  (the
  “Depository”)

	
 

	
 

          As
Servicer under the Transfer and Servicing Agreement dated as of April 1, 2007
by and among Fieldstone Mortgage Investment Corporation, as Depositor, you, as
Indenture Trustee, and as Trust Administrator, Fieldstone Mortgage Investment
Trust, Series 2007-1, as Issuing Entity, Litton Loan Servicing LP, as Servicer,
and Fieldstone Investment Corporation, as Seller (the “Transfer and Servicing
Agreement”), we hereby authorize and request you to establish an account as a
Custodial Account pursuant to Section 3.03 of the Transfer and Servicing
Agreement, designated as “Wells Fargo Bank, N.A., as Indenture Trustee for the
Fieldstone Mortgage Investment Trust, Series 2007-1.” All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer. This letter is
submitted to you in duplicate. Please execute and return one original to us.

	
 

	
 

	
 

	
 

	
 

	
 

	
Litton Loan
  Servicing LP, as Servicer

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
Date:

          The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number _______________, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above.

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Depository

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
Date:

E-1

EXHIBIT F

ESCROW ACCOUNT LETTER AGREEMENT

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
________________
  ___, _____

	
 

	
 

	
 

	
 

	
To: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
  (the
  “Depository”)

	
 

	
 

          As
Servicer under the Transfer and Servicing Agreement dated as of April 1, 2007
by and among Fieldstone Mortgage Investment Corporation, as Depositor, you, as
Indenture Trustee, Wells Fargo Bank, N.A., as Trust Administrator, Fieldstone
Mortgage Investment Trust, Series 2007-1, as Issuing Entity, Litton Loan
Servicing LP, as Servicer, and Fieldstone Investment Corporation, as Seller
(the “Transfer and Servicing Agreement”), we hereby authorize and request you
to establish an account, as an Escrow Account pursuant to Section 3.05 of the
Transfer and Servicing Agreement, to be designated as “Wells Fargo Bank, N.A.,
as Indenture Trustee for the Fieldstone Mortgage Investment Trust, Series 2007-1 and for various mortgagors.” All
deposits in the account shall be subject to withdrawal therefrom by order
signed by the Servicer. This letter is submitted to you in duplicate. Please
execute and return one original to us.

	
 

	
 

	
 

	
 

	
 

	
 

	
Litton Loan
  Servicing LP, as Servicer

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
Date:

F-1

          The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number ______, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above.

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Depository

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
Date:

	
 

	
 

	
 

	
 

	

F-2

EXHIBIT G-1

FORM OF MONTHLY REMITTANCE ADVICE

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Column Name

	
 

	
Description

	
 

	
Decimal

	
 

	
Format Comment

	
 

	
Max Size

	

	
SER_INVESTOR_NBR

	
 

	
A
  value assigned by the Servicer to define a group of loans.

	
 

	
 

	
 

	
Text
  up to 10 digits

	
 

	
20

	

	
LOAN_NBR

	
 

	
A
  unique identifier assigned to each loan by the investor.

	
 

	
 

	
 

	
Text
  up to 10 digits

	
 

	
10

	

	
SERVICER_LOAN_NBR

	
 

	
A
  unique number assigned to a loan by the Servicer. This may be different than
  the LOAN_NBR.

	
 

	
 

	
 

	
Text
  up to 10 digits

	
 

	
10

	

	
BORROWER_NAME

	
 

	
The
  borrower name as received in the file. It is not separated by first and last
  name.

	
 

	
 

	
 

	
Maximum
  length of 30 (Last, First)

	
 

	
30

	

	
SCHED_PAY_AMT

	
 

	
Scheduled
  monthly principal and scheduled interest payment that a borrower is expected
  to pay, P&I constant.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
NOTE_INT_RATE

	
 

	
The
  loan interest rate as reported by the Servicer.

	
 

	
4

	
 

	
Max
  length of 6

	
 

	
6

	

	
NET_INT_RATE

	
 

	
The
  loan gross interest rate less the service fee rate as reported by the Servicer.

	
 

	
4

	
 

	
Max
  length of 6

	
 

	
6

	

	
SERV_FEE_RATE

	
 

	
The
  servicer’s fee rate for a loan as reported by the Servicer. 

	
 

	
4

	
 

	
Max
  length of 6

	
 

	
6

	

	
SERV_FEE_AMT

	
 

	
The
  servicer’s fee amount for a loan as reported by the Servicer. 

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
NEW_PAY_AMT

	
 

	
The
  new loan payment amount as reported by the Servicer. 

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
NEW_LOAN_RATE

	
 

	
The
  new loan rate as reported by the Servicer. 

	
 

	
4

	
 

	
Max
  length of 6

	
 

	
6

	

	
ARM_INDEX_RATE

	
 

	
The
  index the Servicer is using to calculate a forecasted rate.

	
 

	
4

	
 

	
Max
  length of 6

	
 

	
6

	

	
ACTL_BEG_PRIN_BAL

	
 

	
The
  borrower’s actual principal balance at the beginning of the processing cycle.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
ACTL_END_PRIN_BAL

	
 

	
The
  borrower’s actual principal balance at the end of the processing cycle.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
BORR_NEXT_PAY_DUE
_DATE

	
 

	
The
  date at the end of processing cycle that the borrower’s next payment is due
  to the Servicer, as reported by Servicer.

	
 

	
 

	
 

	
MM/DD/YYYY

	
 

	
10

	

	
SERV_CURT_AMT_1

	
 

	
The
  first curtailment amount to be applied.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

G-1-1

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Column Name

	
 

	
Description

	
 

	
Decimal

	
 

	
Format Comment

	
 

	
Max Size

	

	
SERV_CURT_DATE_1

	
 

	
The
  curtailment date associated with the first curtailment amount. 

	
 

	
 

	
 

	
MM/DD/YYYY

	
 

	
10

	

	
CURT_ADJ_
  AMT_1

	
 

	
The
  curtailment interest on the first curtailment amount, if applicable.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
SERV_CURT_AMT_2

	
 

	
The
  second curtailment amount to be applied.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
SERV_CURT_DATE_2

	
 

	
The
  curtailment date associated with the second curtailment amount.

	
 

	
 

	
 

	
MM/DD/YYYY

	
 

	
10

	

	
CURT_ADJ_
  AMT_2

	
 

	
The
  curtailment interest on the second curtailment amount, if applicable.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
SERV_CURT_AMT_3

	
 

	
The
  third curtailment amount to be applied.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
SERV_CURT_DATE_3

	
 

	
The
  curtailment date associated with the third curtailment amount.

	
 

	
 

	
 

	
MM/DD/YYYY

	
 

	
10

	

	
CURT_ADJ_AMT_3

	
 

	
The
  curtailment interest on the third curtailment amount, if applicable.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
PIF_AMT

	
 

	
The
  loan “paid in full” amount as reported by the Servicer.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
PIF_DATE

	
 

	
The
  paid in full date as reported by the Servicer.

	
 

	
 

	
 

	
MM/DD/YYYY

	
 

	
10

	

	
ACTION_CODE

	
 

	
The
  standard FNMA numeric code used to indicate the default/delinquent status of
  a particular loan.

	
 

	
 

	
 

	
Action Code Key:
  15=Bankruptcy, 30=Foreclosure, 60=PIF, 63=Substitution, 65=Repurchase, 70=REO

	
 

	
2

	

	
INT_ADJ_AMT

	
 

	
The
  amount of the interest adjustment as reported by the Servicer.

	
 

	
2

	
 

	
No commas(,) or dollar
  signs ($)

	
 

	
11

	

	
SOLDIER_SAILOR_ADJ_AMT

	
 

	
The
  Soldier and Sailor Adjustment amount, if applicable.

	
 

	
2

	
 

	
No commas(,) or dollar
  signs ($)

	
 

	
11

	

	
NON_ADV_LOAN_AMT

	
 

	
The
  Non Recoverable Loan Amount, if applicable.

	
 

	
2

	
 

	
No commas(,) or dollar signs
  ($)

	
 

	
11

	

	
LOAN_LOSS_AMT

	
 

	
The
  amount the Servicer is passing as a loss, if applicable.

	
 

	
2

	
 

	
No commas(,) or dollar
  signs ($)

	
 

	
11

	

	
SCHED_BEG_PRIN_BAL

	
 

	
The
  scheduled outstanding principal amount due at the beginning of the cycle date
  to be passed through to investors.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
SCHED_END_PRIN_BAL

	
 

	
The
  scheduled principal balance due to investors at the end of a processing
  cycle.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
SCHED_PRIN_AMT

	
 

	
The
  scheduled principal amount as reported by the Servicer for the current cycle
  — only applicable for Scheduled/Scheduled Loans.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

G-1-2

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Column Name

	
 

	
Description

	
 

	
Decimal

	
 

	
Format Comment

	
 

	
Max Size

	

	
SCHED_NET_INT

	
 

	
The
  scheduled gross interest amount less the service fee amount for the current
  cycle as reported by the Servicer — only applicable for Scheduled/Scheduled
  Loans.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
ACTL_PRIN_AMT

	
 

	
The
  actual principal amount collected by the Servicer for the current reporting
  cycle — only applicable for Actual/Actual Loans.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
ACTL_NET_INT

	
 

	
The
  actual gross interest amount less the service fee amount for the current
  reporting cycle as reported by the Servicer — only applicable for
  Actual/Actual Loans.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
PREPAY_PENALTY_
  AMT

	
 

	
The
  penalty amount received when a borrower prepays on his loan as reported by
  the Servicer. 

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
PREPAY_PENALTY_
  WAIVED

	
 

	
The
  prepayment penalty amount for the loan waived by the servicer.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

	
MOD_DATE

	
 

	
The
  Effective Payment Date of the Modification for the loan.

	
 

	
 

	
 

	
MM/DD/YYYY

	
 

	
10

	

	
MOD_TYPE

	
 

	
The
  Modification Type.

	
 

	
 

	
 

	
Varchar
  - value can be alpha or numeric

	
 

	
30

	

	
DELINQ_P&I_ADVANCE_AMT

	
 

	
The
  current outstanding principal and interest advances made by Servicer.

	
 

	
2

	
 

	
No
  commas(,) or dollar signs ($)

	
 

	
11

	

G-1-3

EXHIBIT H

FORM OF POWER OF ATTORNEY

LIMITED POWER OF ATTORNEY

          WELLS
FARGO BANK, N.A., a national banking association, (the
“Company”) hereby irrevocably constitutes and appoints LITTON LOAN SERVICING LP (THE “SERVICER”),
and any of its respective officers or agents thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Company and in the name of
the Company or in its own name, from time to time in the Servicer’s discretion,
for the purpose of servicing mortgage loans, related to that certain Transfer
and Servicing Agreement reflected on Exhibit A, to take any and all appropriate
action and to execute any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of servicing mortgage loans, and,
without limiting the generality of the foregoing, the Company hereby gives the
Servicer the power and right, on behalf of the Company, without assent by the
Company, to do the following, to the extent consistent with the terms and
conditions of the Transfer and Servicing Agreement attached hereto as Exhibit
A: 

	
 

	
 

	
 

	
          (A)
  to direct any party liable for any payment under any loans to make payment of
  any and all moneys due or to become due thereunder directly to the Servicer,
  as applicable, or as the Servicer shall direct and in the name of the Company
  or its own name, or otherwise, to take possession of and endorse and collect
  any checks, drafts, notes, acceptances, or other instruments for the payment
  of moneys due under any loans (including those related to mortgage
  insurance); (B) to execute
  substitutions of trustee, assignment, reconveyance documents, foreclosure
  documents, modifications, subordinations, grant deeds and other instruments
  conveying real property, and such other documents as the Servicer deems
  necessary to carry out its obligations to service the mortgage loans; (C) to ask or demand for, collect,
  receive payment of and receipt for, any and all moneys, claims, and other
  amounts due or to become due at any time in respect of or arising out of any
  loans; (D) to commence and
  prosecute any suits, actions, or proceedings at law or in equity in any court
  of competent jurisdiction to collect the loans or any thereof and to enforce
  any other right in respect of any loans; and (E) generally, to do, at the Servicer’s option, at any time,
  and from time to time, all acts and things which the Servicer, as applicable,
  deems necessary to protect, preserve or realize upon the loans and the liens
  thereon and to effect the intent of the Agreement, all as fully and
  effectively as the Company might do. 

          The
Company hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable. 

          The
powers conferred on the Servicer are solely to protect the Servicer’s interests
in the loans and shall not impose any duty upon the Servicer to exercise any
such powers. Neither the Servicer nor any of its officers, directors, or
employees shall be responsible to the Company for any act or failure to act
hereunder. 

          DATED
this ____ day of __________________, 2007. 

	
 

	
 

	
 

	
 

	
 

	
Wells Fargo Bank, N.A. as Indenture
Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Its:

	
 

	
 

	
 

	

STATE OF
_______________ 

COUNTY OF
_____________ 

On this
___________ day of____________, 2007, before me, the undersigned, a notary public,
personally appeared ______________, ___________ of Wells Fargo Bank, N.A., a
national banking association, who is personally known to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within
instrument and acknowledged to me that they executed the same in his/her
authorized capacities and that by their signatures on the instrument the
persons of the entry upon behalf of which the persons acted, executed the
Instrument. 

WITNESS my
hand and official seal. 

Signature
_________________________

H-2

Exhibit A

Transfer and
Servicing Agreement, dated as of April 1, 2007, by and among Fieldstone
Mortgage Investment Trust, Series 2007-1, Fieldstone Mortgage Investment
Corporation, Wells Fargo Bank, N.A., Litton Loan Servicing LP and Fieldstone
Investment Corporation. 

H-3

EXHIBIT I

[RESERVED]

I-1

EXHIBIT J

[RESERVED]

J-1

EXHIBIT K

[RESERVED]

Attachment 1

EXHIBIT L 

Assessments of Compliance and Attestation
Reports Servicing Criteria1 

	
 

	
 

	
 

	
 

	
Reg. AB
  Item 1122(d) Servicing Criteria

	
Wells Fargo Bank,

  N.A.

	

	

	

  (1)

	

  General Servicing Considerations

	
 

	
 

	
 

	
(i)

	
monitoring performance or
  other triggers and events of default

	
X

	
 

	
(ii)

	
monitoring performance of
  vendors of activities outsourced

	
X

	
 

	
(ii)

	
maintenance of back-up
  servicer for pool assets

	
 

	
 

	
(iv)

	
fidelity bond and E&O
  policies in effect

	
 

	

  (2)

	

  Cash Collection and Administration

	
 

	
 

	
 

	
(i)

	
timing of deposits to custodial
  account

	
X

	
 

	
(ii)

	
wire transfers to
  investors by authorized personnel

	
X

	
 

	
(iii)

	
advances or guarantees
  made, reviewed and approved as required

	
X

	
 

	
(iv)

	
accounts maintained as
  required

	
X

	
 

	
(v)

	
accounts at federally
  insured depository institutions

	
X

	
 

	
(vi)

	
unissued checks
  safeguarded

	
 

	
 

	
(vii)

	
monthly reconciliations of
  accounts

	
X

	

  (3)

	

  Investor Remittances and Reporting

	
 

	
 

	
 

	
(i)

	
investor reports

	
X

	
 

	
(ii)

	
remittances

	
X

	
 

	
(iii)

	
proper posting of
  distributions

	
X

	
 

	
(iv)

	
reconciliation of
  remittances and payment statements

	
X

	

  (4)

	

  Pool Asset Administration

	
 

	
 

	
 

	
(i)

	
maintenance of pool
  collateral

	
X

	
 

	
(ii)

	
safeguarding of pool
  assets/documents

	
X

	
 

	
(iii)

	
additions, removals and
  substitutions of pool assets

	
 

	
 

	
(iv)

	
posting and allocation of
  pool asset payments to pool assets

	
 

	
 

	
(v)

	
reconciliation of servicer
  records

	
 

	
 

	
(vi)

	
modifications or other
  changes to terms of pool assets

	
 

	
 

	
(vii)

	
loss mitigation and
  recovery actions

	
 

	
 

	
(viii)

	
records regarding
  collection efforts

	
 

	
 

	
 

	

	
 

          1 The
descriptions of the Item 1122(d) servicing criteria use key words and phrases
and are not verbatim recitations of the servicing criteria.  Refer to Regulation AB, Item 1122 for a full
description of servicing criteria.

L-1

	
 

	
 

	
 

	
 

	
Reg. AB
  Item 1122(d) Servicing Criteria

	
Wells Fargo Bank,

  N.A.

	

	

	
 

	
 

	
 

	
 

	
 

	
(ix)

	
adjustments to variable
  interest rates on pool assets

	
 

	
 

	
(x)

	
matters relating to funds
  held in trust for obligors

	
 

	
 

	
(xi)

	
payments made on behalf of
  obligors (such as for taxes or insurance)

	
 

	
 

	
(xii)

	
late payment penalties
  with respect to payments made on behalf of obligors

	
 

	
 

	
(xiii)

	
records with respect to
  payments made on behalf of obligors

	
 

	
 

	
(xiv)

	
recognition and recording
  of delinquencies, charge-offs and uncollectible accounts

	
X

	
 

	
(xv)

	
maintenance of external
  credit enhancement or other support

	
X

L-2

EXHIBIT L-1

Report on Assessment of Compliance

With Regulation AB Servicing Criteria

          Litton
Loan Servicing LP (the “Servicer”) is responsible for assessing compliance as
of and for the year ended [date] (the “Reporting Period”) with the servicing
criteria set forth in Section 229.1122(d) of the Code of Federal Regulations
(the “CFR”), except for the criteria set forth in Sections 1122(d)(4)(xv),
1122(d)(3)(i)(C) and 1122(d)(3)(ii) regarding the waterfall calculation (which
are the responsibility of the Trustee), 1122(d)(4)(i) and 1122(d)(4)(ii) (which
are the responsibility of the Custodian), and 229.1122(d)(1)(iii) in the CFR,
which the Servicer has concluded is not applicable to the servicing activities
it performs with respect to the asset-backed securities transactions covered by
this report (the “Applicable Servicing Criteria”). The transactions covered by
this report include the asset-backed securities transactions, which were
completed after [date], and that were registered with the SEC pursuant to the
Securities Act of 1933 or were not required to be registered (the “Platform”)
for which Litton Loan Servicing LP served as servicer.

          The
Servicer has assessed its compliance with the Applicable Servicing Criteria as
of and for the year ended [date] and has concluded that it has complied, in all
material respects, with the Applicable Servicing Criteria with respect to the
Platform taken as a whole, except as disclosed on Exhibit A.

          [__________________],
an independent registered public accounting firm, has issued an attestation
report on the assessment of compliance with the Applicable Servicing Criteria
as of and for the year ended [date].

	
 

	
 

	
 

	
 

	
 

	
Date:

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
LITTON LOAN
  SERVICING LP, as Servicer

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
 

	
 

	
 

	

	
 

	
Title:

	
 

	
 

	

	
 

L-3

EXHIBIT M

Additional Form 10-D Disclosure

	
 

	
 

	
 

	
Item on Form 10-D

	
Party Responsible

	

	

	
Item 1: Distribution and Pool

  Performance Information

	
 

	
 

	
 

	
 

	
Information
  included in the Monthly Statement
(with respect to each party listed, the information required to be provided by such party in
accordance with the Transfer and Servicing Agreement.)

	
Servicer

  Trust Administrator

	
 

	
 

	
 

	
Any
  information required by 1121 which is

  NOT included on the Monthly Statement

	
Depositor

	
 

	
 

	
 

	
 

	
 

	
 

	
Item 2: Legal Proceedings

	
 

	
 

	
 

	
Any legal proceeding
  pending against the following entities or their respective property, that is
  material to Noteholders, including any proceedings known to be contemplated
  by governmental authorities:

	
 

	
 

	
 

	
¡
	
Trust Fund (Issuing
  Entity)

	
Indenture
  Trustee, Trust Administrator and Depositor

	
 

	
 

	
 

	
¡
	
Seller (Sponsor)

	
Depositor

	
 

	
 

	
 

	
¡
	
Depositor

	
Depositor

	
 

	
 

	
 

	
¡
	
Indenture Trustee

	
Indenture
  Trustee

	
 

	
 

	
 

	
¡
	
Trust Administrator

	
Trust
  Administrator

	
 

	
 

	
 

	
¡
	
Custodian

	
Custodian

	
 

	
 

	
 

	
¡
	
1110(b) Originator

	
Depositor

	
 

	
 

	
 

	
¡  Any 1108(a)(2)
  Servicer (other than the Trust Administrator)

	
Servicer

	
 

	
 

	
 

	
¡
	
Any other party
  contemplated by 1100(d)(1)

	
Depositor

	
 

	
 

	
 

	
Item 3: Sale of Securities and Use of Proceeds

	
Depositor

	
 

	
 

	
 

	
Information from Item 2(a) of Part II of Form 10-Q:

	
 

	
 

	
 

	
 

	
With respect to any sale
  of securities by the Sponsor, depositor or Issuing Entity, that are backed by
  the same asset pool or are otherwise issued by the Issuing Entity, whether or
  not registered, provide the sales and use of proceeds information in Item 701
  

	
 

M-1

	
 

	
 

	
Item on Form 10-D

	
Party Responsible 

	

	

	
of Regulation S-K. Pricing
  information can be omitted if securities were not registered.

	
 

	
 

	
 

	
      Item 4: Defaults Upon Senior Securities

	
Trust
  Administrator

  Indenture Trustee

	
 

	
 

	
Information from Item 3 of Part II of Form 10-Q:

	
 

	
 

	
 

	
Report the occurrence of
  any Event of Default (after expiration of any grace period and provision of
  any required notice)

	
 

	
 

	
 

	
Item 5: Submission of Matters to a Vote of Security Holders

	
Trust
  Administrator

  Indenture Trustee

	
 

	
 

	
Information from Item 4 of Part II of Form 10-Q

	
 

	
 

	
 

	
      Item 6: Significant Obligors of Pool Assets

	
Depositor

	
 

	
 

	
Item 1112(b) – Significant
  Obligor Financial Information*

	
 

	
 

	
 

	
*This information need
  only be reported on the Form 10-D for the distribution period in which
  updated information is required pursuant to the Item.

	
 

	
 

	
 

	
      Item 7: Significant Enhancement Provider Information

	
 

	
 

	
 

	
Item 1114(b)(2) – Credit Enhancement Provider Financial
  Information*

	
 

	
 

	
 

	
¡ Determining applicable
  disclosure threshold

	
Depositor

	
 

	
 

	
¡ Requesting
  required financial information (including any required accountants’ consent
  to the use thereof) or effecting incorporation by reference

	
Depositor

	
 

	
 

	
Item 1115(b) – Derivative Counterparty Financial Information*

	
 

	
 

	
 

	
¡  Determining
  current maximum probable exposure

	
Depositor

	
 

	
 

	
¡ Determining
  current significance percentage

	
Depositor

	
 

	
 

	
¡ Requesting required
  financial information (including any required accountants’ consent to the use
  thereof) or effecting incorporation by reference

	
Depositor

	
 

	
 

	
* This information need
  only be reported on 

	
 

M-2

	
 

	
 

	
Item on Form 10-D

	
Party Responsible

	

	

	
the Form 10-D for the distribution period in which
  updated information is required pursuant to the Items.

	
 

	
Item 8: Other Information

	
Any
  party responsible for the applicable Form

  8-K Disclosure item

	
 

	
 

	
Disclose any information required to be reported on Form
  8-K during the period covered by the Form 10-D but not reported

	
 

	
 

	
 

	
Item 9: Exhibits

	
 

	
 

	
 

	
Monthly Statement to Noteholders

	
Trust
  Administrator

	
 

	
 

	
Exhibits required by Item 601 of Regulation S-K, such as material
agreements 

	
Depositor

M-3

EXHIBIT N

Additional Form 10-K Disclosure

	
 

	
 

	
 

	
Item on
  Form 10-K

	
 

	
Party
  Responsible

	

	

	

	
Item 1B: Unresolved Staff Comments

	
 

	
Depositor

	
 

	
 

	
 

	
Item 9B:  Other Information

	
 

	
Any
  party responsible for disclosure items on
Form
  8-K

	
Disclose any information
  required to be reported on Form 8-K during the fourth quarter covered by the
  Form 10-K but not reported

	
 

	
 

	
 

	
 

	
 

	
Item 15:  Exhibits, Financial
  Statement Schedules

	
 

	
Trust
  Administrator Depositor

	
 

	
 

	
 

	
Reg AB Item 1112(b):
  Significant Obligors of Pool Assets

	
 

	
 

	
 

	
 

	
 

	
Significant Obligor Financial
  Information*

	
 

	
Depositor

	
 

	
 

	
 

	
*This information need
  only be reported on the Form 10-D for the distribution period in which
  updated information is required pursuant to the Item.

	
 

	
 

	
 

	
 

	
 

	
Reg AB Item 1114(b)(2):
  Credit Enhancement Provider Financial Information

	
 

	
 

	
 

	
 

	
 

	
¡ Determining
  applicable disclosure threshold

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Requesting
  required financial information (including any required accountants’ consent
  to the use thereof) or effecting incorporation by reference

	
 

	
Depositor

	
 

	
 

	
 

	
*This information need
  only be reported on the Form 10-D for the distribution period in which
  updated information is required pursuant to the Items.

	
 

	
 

	
 

	
 

	
 

	
Reg AB Item 1115(b):
  Derivative Counterparty Financial Information

	
 

	
 

	
 

	
 

	
 

	
¡ Determining
  current maximum probable exposure

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Determining
  current significance percentage

	
 

	
Depositor

	
 

	
 

	
 

	

¡ Requesting
  required financial information (including any required accountants’ consent
  to the use thereof) or effecting incorporation by reference

	
 

	
Depositor

	
 

	
 

	
 

	
*This information need
  only be reported on the Form 10-D for the distribution period in which
  updated information is required 

	
 

	
 

N-1

	
 

	
 

	
 

	
Item on
  Form 10-K

	
 

	
Party
  Responsible

	

	

	

	
pursuant to the Items.

	
 

	
 

	
 

	
 

	
 

	
Reg AB
  Item 1117: Legal Proceedings

	
 

	
 

	
 

	
 

	
 

	
Any legal proceeding
  pending against the following entities or their respective property, that is
  material to Noteholders, including any proceedings known to be contemplated
  by governmental authorities:

	
 

	
 

	
 

	
 

	
 

	
¡ Trust Fund
  (Issuing Entity)

	
 

	
Indenture
  Trustee, Trust Administrator and Depositor

	
 

	
 

	
 

	
¡ Seller (Sponsor)

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Depositor

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Indenture Trustee

	
 

	
Indenture
  Trustee

	
 

	
 

	
 

	
¡ Trust
  Administrator

	
 

	
Trust
  Administrator

	
 

	
 

	
 

	
¡ Custodian

	
 

	
Custodian

	
 

	
 

	
 

	
¡ 1110(b) Originator

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1108(a)(2)
  Servicer (other than the Trust Administrator)

	
 

	
Servicer

	
 

	
 

	
 

	
¡ Any other party
  contemplated by 1100(d)(1)

	
 

	
Depositor

	
 

	
 

	
 

	
Reg AB Item 1119:
  Affiliations and Relationships

	
 

	
 

	
 

	
 

	
 

	
Whether (a) the Seller
  (Sponsor), Depositor or Trust Fund (Issuing Entity) is an affiliate of the
  following parties, and (b) to the extent known and material, any of the
  following parties are affiliated with one another:

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Trust
  Administrator

	
 

	
Trust Administrator

	
 

	
 

	
 

	
¡ Indenture Trustee

	
 

	
Indenture Trustee

	
 

	
 

	
 

	
¡ Any other
  1108(a)(3) servicer

	
 

	
Servicer

	
 

	
 

	
 

	
¡ Any 1110
  Originator

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1112(b)
  Significant Obligor

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1114 Credit
  Enhancement Provider

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1115 Derivate
  Counterparty Provider

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any other
  1101(d)(1) material party

	
 

	
Depositor

	
 

	
 

	
 

	
Whether there are any
  “outside the ordinary course business arrangements” other than would be
  obtained in an arm’s length transaction between (a) the Seller (Sponsor),
  Depositor or Issuing Entity on the one hand, and (b) any of the following
  parties (or their affiliates) on the other hand, that exist currently or
  within the past two years and that are material to a Noteholder’s 

	
 

	
Depositor

N-2

	
 

	
 

	
 

	
Item on
  Form 10-K

	
 

	
Party
  Responsible

	

	

	

	
understanding of the
  Certificates:

	
 

	
 

	
 

	
 

	
 

	
¡ Trust
  Administrator

	
 

	
Trust Administrator

	
 

	
 

	
 

	
¡ Any other
  1108(a)(3) servicer

	
 

	
Servicer

	
 

	
 

	
 

	
¡ Any 1110
  Originator

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1112(b)
  Significant Obligor

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1114 Credit
  Enhancement Provider

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1115 Derivate
  Counterparty Provider

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any other
  1101(d)(1) material party

	
 

	
Depositor

	
 

	
 

	
 

	
Whether there are any
  specific relationships involving the transaction or the pool assets between
  (a) the Seller (Sponsor), Depositor or Issuing Entity on the one hand, and
  (b) any of the following parties (or their affiliates) on the other hand,
  that exist currently or within the past two years and that are material:

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Trust
  Administrator

	
 

	
Trust Administrator

	
 

	
 

	
 

	
¡ Any other
  1108(a)(3) servicer

	
 

	
Servicer

	
 

	
 

	
 

	
¡ Any 1110
  Originator

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1112(b)
  Significant Obligor

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1114 Credit
  Enhancement Provider

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any 1115 Derivate
  Counterparty Provider

	
 

	
Depositor

	
 

	
 

	
 

	
¡ Any other
  1101(d)(1) material party

	
 

	
Depositor

N-3

EXHIBIT O

Form 8-K Disclosure Information

	
   

  	
   

  	
   

  
	
  Item on Form 8-K

  	
   

  	
  Party Responsible

  
	
  

  	
  

  	
  

  
	
  Item 1.01- Entry into a Material Definitive Agreement

  	
   

  	
  All
  parties

  
	
  Disclosure is required
  regarding entry into or amendment of any definitive agreement that is
  material to the securitization, even if depositor is not a party. 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Examples: servicing
  agreement, custodial agreement.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Note: disclosure not
  required as to definitive agreements that are fully disclosed in the
  prospectus

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Item 1.02- Termination of a Material Definitive Agreement

  	
   

  	
  All
  parties

  
	
   

  	
   

  	
   

  
	
  Disclosure is required
  regarding termination of any definitive agreement that is material to the
  securitization (other than expiration in accordance with its terms), even if
  depositor is not a party. 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Examples: servicing
  agreement, custodial agreement.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Item 1.03- Bankruptcy or Receivership

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  Disclosure is required
  regarding the bankruptcy or receivership, with respect to any of the
  following: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ¡ Seller (Sponsor)

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  ¡ Depositor

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  ¡ Affiliated
  Servicer

  	
   

  	
  Servicer

  
	
   

  	
   

  	
   

  
	
  ¡ Other Servicer
  servicing 20% or more of the pool assets at the time of the report

  	
   

  	
  Servicer

  
	
   

  	
   

  	
   

  
	
  ¡ Other material
  servicers

  	
   

  	
  Servicer

  
	
   

  	
   

  	
   

  
	
  ¡ Indenture Trustee

  	
   

  	
  Indenture
  Trustee

  
	
   

  	
   

  	
   

  
	
  ¡ Trust
  Administrator

  	
   

  	
  Trust
  Administrator

  
	
   

  	
   

  	
   

  
	
  ¡ Significant Obligor

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  ¡ Credit Enhancer
  (10% or more)

  	
   

  	
  Depositor

  

O-1

	
   

  	
   

  	
   

  
	
  Item on Form 8-K

  	
   

  	
  Party Responsible

  
	
  

  	
  

  	
  

  
	
  ¡ Derivative
  Counterparty

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  ¡ Custodian

  	
   

  	
  Custodian

  
	
   

  	
   

  	
   

  
	
  Item 2.04- Triggering Events that Accelerate or Increase a Direct
  Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

  	
   

  	
  Depositor

  Trust Administrator

  
	
   

  	
   

  	
   

  
	
  Includes an early
  amortization, performance trigger or other event, including event of default,
  that would materially alter the payment priority/distribution of cash
  flows/amortization schedule.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Disclosure will be made of
  events other than waterfall triggers which are disclosed in the monthly
  statements to the Noteholders.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Item 3.03- Material Modification to Rights of Security Holders

  	
   

  	
  Trust
  Administrator

  Indenture Trustee

  
	
   

  	
   

  	
  Depositor

  
	
  Disclosure is required of
  any material modification to documents defining the rights of Noteholders,
  including the Transfer and Servicing Agreement.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Item 5.03- Amendments of Articles of Incorporation or Bylaws; Change
  of Fiscal Year

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  Disclosure is required of
  any amendment “to the governing documents of the Issuing Entity”.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Item 6.01- ABS Informational and Computational Material

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  Item 6.02- Change of Servicer or Trust Administrator

  	
   

  	
  Trust
  Administrator/Depositor/

  Servicer/Indenture Trustee

  
	
  Requires disclosure of any
  removal, replacement, substitution or addition of any master servicer,
  affiliated servicer, other servicer servicing 10% or more of pool assets at
  time of report, other material servicers or Indenture Trustee.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Reg AB disclosure about
  any new servicer or master servicer is also required.

  	
   

  	
  Servicer/Depositor

  
	
   

  	
   

  	
   

  
	
  Reg AB disclosure about
  any new Indenture Trustee is also required.

  	
   

  	
  Indenture
  Trustee

  

O-2

	
  Item on Form 8-K

  	
   

  	
  Party Responsible

  
	
  

  	
  

  	
  

  
	
  Item 6.03- Change in Credit Enhancement or External Support

  	
   

  	
  Depositor/Trust
  Administrator

  
	
   

  
	
  Covers termination of any
  enhancement in manner other than by its terms, the addition of an
  enhancement, or a material change in the enhancement provided. Applies to
  external credit enhancements as well as derivatives.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Reg AB disclosure about
  any new enhancement provider is also required.

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  Item 6.04- Failure to Make a Required 

  Distribution

  	
   

  	
  Trust
  Administrator

  Indenture Trustee

  
	
   

  	
   

  	
   

  
	
  Item 6.05- Securities Act Updating Disclosure

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  If any material pool
  characteristic differs by 5% or more at the time of issuance of the
  securities from the description in the final prospectus, provide updated Reg
  AB disclosure about the actual asset pool.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If there are any new
  servicers or originators required to be disclosed under Regulation AB as a
  result of the foregoing, provide the information called for in Items 1108 and
  1110 respectively.

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  Item 7.01- Reg FD Disclosure

  	
   

  	
  All
  parties

  
	
   

  	
   

  	
   

  
	
  Item 8.01- Other Events

  	
   

  	
  Depositor

  
	
   

  	
   

  	
   

  
	
  Any event, with respect to
  which information is not otherwise called for in Form 8-K, that the
  registrant deems of importance to Noteholders.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Item 9.01- Financial Statements and Exhibits

  	
   

  	
  Responsible
  party for reporting/disclosing the financial statement or exhibit

  

O-3

EXHIBIT P 

Additional Disclosure Notification

Wells Fargo
Bank, N.A. as Trust Administrator 

9062 Old Annapolis Road

Columbia, Maryland 21045

Fax: (410) 715-2380

E-mail: cts.sec.notifications@wellsfargo.com

Fieldstone
Mortgage Investment Corporation

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

Attn:
Corporate Trust Services - FIELDSTONE 2007-1-SEC REPORT PROCESSING

RE:
**Additional Form [  ] Disclosure**Required

Ladies and
Gentlemen:

          In
accordance with Section [  ] of the Transfer and Servicing Agreement, dated as
of April 1, 2007, among Fieldstone Mortgage Investment Trust, Series 2007-1,
Fieldstone Mortgage Investment Corporation, Wells Fargo Bank, N.A., Litton Loan
Servicing LP and Fieldstone Investment Corporation. The Undersigned, as [  ], hereby notifies you that certain events
have come to our attention that [will][may] need to be disclosed on Form [  ].

Description of Additional Form [ ] Disclosure:

List of Any
Attachments hereto to be included in the Additional Form [ ] Disclosure:

          Any
inquiries related to this notification should be directed to [  ], phone number: [  ]; email address: [  ].

	
 

	
 

	
 

	
 

	
[NAME OF
  PARTY]

	
 

	
as [role]

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

P-1

EXHIBIT Q

FORM
OF ANNUAL CERTIFICATION

	
 

	
 

	
Re:

	
The Transfer
  and Servicing Agreement dated as of April 1, 2007 (the “Agreement”), among
  Fieldstone Mortgage Investment Trust, Series 2007-1, Fieldstone Mortgage
  Investment Corporation, Wells Fargo Bank, 

	
 

	
N.A., Litton
  Loan Servicing LP and Fieldstone Investment Corporation

I,
________________________________, the _______________________ of [NAME OF
COMPANY], certify to the Depositor and the Trust Administrator, and their
officers, with the knowledge and intent that they will rely upon this
certification, that:

(1) The
Company has reviewed the servicer compliance statement of the Company provided
in accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Company’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
servicing reports, officer’s certificates and other information relating to the
servicing of the Mortgage Loans by the Company during 200[ ] that were
delivered by the Company to the Trust Administrator pursuant to the Agreement
(collectively, the “Company Servicing Information”);

(2) Based on
the Company’s knowledge, the Company Servicing Information, 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 the light of the
circumstances under which such statements were made, not misleading with
respect to the period of time covered by the Company Servicing Information;

(3) Based on
the Company’s knowledge, all of the Company Servicing Information required to
be provided by the Company under the Agreement has been provided to the Trust
Administrator;

(4) Based on
the Company’s knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance Statement, the
Servicing Assessment or the Attestation Report, the Company has fulfilled its
obligations under the Agreement in all material respects; and

(5) The
Compliance Statement required to be delivered by the Company pursuant to the
Transfer and Servicing Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Sub-servicer and
Subcontractor pursuant to the Agreement, have been provided to the
[     ]. Any material instances of noncompliance
described in such reports have been disclosed to the [     ].
Any material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.

Q-1

	
 

	
 

	
 

	
Date:

	
 

	
 

	
 

	

	
 

	
By:

  Name:

	
 

	
 

	
 

	

	
 

Q-2

EXHIBIT R 

Transaction Parties

	
 

	
 

	
 

	
Sponsor and
  Seller:

	
 

	
Fieldstone
  Investment Corporation

	
 

	
 

	
 

	
Depositor:

	
 

	
Fieldstone
  Mortgage Investment Corporation

	
 

	
 

	
 

	
Issuing
  Entity:

	
 

	
Fieldstone
  Mortgage Investment Trust, Series 2007-1

	
 

	
 

	
 

	
Servicer:

	
 

	
Litton Loan
  Servicing LP

	
 

	
 

	
 

	
Trust
  Administrator,

  Indenture Trustee

  and Custodian:

	
 

	
Wells Fargo
  Bank, N.A.

	
 

	
 

	
 

	
Owner
  Trustee:

	
 

	
U.S. Bank Trust
  National Association

	
 

	
 

	
 

	
Swap
  Counterparty:

	
 

	
JPMorgan
  Chase Bank, N.A.

R-1

SCHEDULE A

MORTGAGE LOAN SCHEDULE

Schedule A-1

SCHEDULE A-1

Schedule A-1-1

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