Document:

EXHIBIT 10

EXHIBIT 10.29

EMPLOYMENT AGREEMENT

This Employment Agreement is entered into by and among AMC ENTERTAINMENT INC., a Delaware corporation ("AMCE"), AMERICAN MULTI-CINEMA, INC., a Missouri corporation ("AMC" and, collectively with AMCE, the "Company"), and 
JOHN D. MCDONALD ("Employee"). In consideration of the mutual promises and covenants contained herein, the parties hereto agree as follows:

1.Duties. During the Term (as defined in Section 2) of his employment by the Company under this Agreement, Employee shall devote his full time and attention to the business of the Company as directed by AMC's President and
Chief Operating Officer or such officer's designee.

2.Term. The term of this Agreement shall commence as of July 1, 2001 and shall terminate on June 30, 2003 or sooner as provided in Section 6 below (such period, as it may be extended, the "Term"). On each July 1 hereafter,
commencing in 2002, one year shall be added to the Term of Employee's employment with the Company under this Agreement, so that as of each July 1 the Term of Employee's employment hereunder shall be two (2) years.

3.Compensation.

(a)Base Salary. During the Term of his employment by the Company under this Agreement, Employee shall receive an annual salary of $275,000.00 ("Base Salary") (less withholding for applicable taxes), payable in accordance
with the Company's payroll procedures for its salaried employees, subject to such increases as may be determined by AMC's President and Chief Operating Officer with approval from AMCE's Chairman of the Board, President and Chief Executive Officer and, if
applicable, the Compensation Committee of the Board of Directors of AMCE.

(b)Bonus. In addition to Base Salary, Employee shall be eligible to "receive an annual bonus (the "Bonus") as determined from time to time by AMC's President and Chief Operating Officer with approval from AMCE's Chairman of
the Board, President and Chief Executive Officer and, if applicable, the Compensation Committee of the Board of Directors of AMCE, based on the Company's applicable incentive compensation program, as such may exist from time to time.

(c)Benefits. During the Term of Employee's employment by the Company under this Agreement, Employee also shall be eligible for the benefits offered by the Company from time to time to the Company's other executive officers
(such as group insurance, pension plans, thrift plans, stock purchase plans and the like). Nothing herein shall be construed so as to prevent the Company from modifying or terminating any employee benefit plans or programs it may adopt from time to time.

 

(d)Automobile. During the Term of Employee's employment by the Company under this Agreement, the Company shall provide Employee with a Company owned or leased automobile or an equivalent automobile allowance.

4.Expense Reimbursements. During the Term of Employee's employment by the Company under this Agreement, the Company shall reimburse Employee for business travel and entertainment expenses reasonably incurred by Employee on
behalf of the Company in accordance with the Company's procedures, as such may exist from time to time.

5.Termination. Employee's employment by the Company under this Agreement shall be terminated upon the earliest to occur of the following events:

(a)Resignation. Employee's resignation or other voluntary departure.

(b)Death. The death of Employee.

(c)Disability. If, as a result of Employee's incapacity due to physical or mental illness, (i) Employee shall not have been regularly performing his duties and obligations hereunder for a period of one hundred twenty (120)
consecutive days (a "Disability"), (ii) the Company has given Employee the written Notice of Termination pursuant to Section 6(a) hereof, and (iii) within thirty (30) days after the Company gives Employee such written Notice of Termination (which may
occur before or after the end of such 120 day period), Employee shall not have returned to the performance of his duties and obligations hereunder on a regular basis.

(d)Cause. Employee is terminated for Cause. For purposes of this Agreement, "Cause" is defined as (i) the willful and continued failure by Employee to perform substantially his duties with the Company (other than any such
failure resulting from his incapacity due to physical or mental illness), or (ii) the willful engaging by Employee in misconduct which is materially and demonstrably injurious to the Company. For purposes of this Agreement, no act, or failure to act, on
the part of Employee shall be considered "willful" unless such act was committed, or such failure to act occurred, in bad faith and without reasonable belief that Employee's act or failure to act was in the best interests of the Company.

(e)Without Cause. The employment of Employee by the Company under this Agreement may be terminated without Cause with severance at any time by AMC's President and Chief Operating Officer with approval from AMCE's Chairman of
the Board, President and Chief Executive Officer in their sole discretion. In the event of payment of severance without Cause, Employee shall receive the severance amount specified in paragraph 7(c) herein and in such case, Employee will not receive
severance under the AMC Severance Pay Plan.

(f)Change of Control. Employee terminates his employment by the Company hereunder due to the occurrence of any one or more of the events described in clauses (i), (ii) and (iii) below subsequent to a Change of Control (as
defined below), provided that Employee has given the Company the written Notice of Termination pursuant to Section 6(a) hereof within sixty (60) days of the occurrence of any such event:
(i)a substantial adverse alteration in Employee's responsibilities from those in effect immediately prior to the Change of Control;

(ii)a reduction in Employee's Base Salary below the rate that is in effect immediately prior to the Change of Control; or

(iii)a material reduction in the benefits provided to Employee by the Company prior to the Change of Control.

For purposes of this Agreement a "Change of Control" means (i) a merger, consolidation or similar transaction involving the Company after which holders of the Company's stock before such transaction do not own at least 50% of the
combined voting power of all shares generally entitled to vote in the election of the members of the Board of Directors of the surviving entity, (ii) the acquisition by any person or group (other than Apollo or the holders of Class B Stock on the Initial
Issuance Date), so long as neither Apollo nor such holders of Class B Stock is a part of such group (as such term is defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder), of
beneficial ownership of at least 50% of the combined voting power of all shares generally entitled to vote in the election of the members of the Board of Directors of the Company, or (iii) the sale of all or substantially all of the assets of the Company
or similar transaction (the determination of aggregate voting power to recognize that the Company's Class B Stock has ten votes per share and the Company's Common Stock has one vote per share).

"Apollo" means Apollo Management IV, L.P., Apollo Management V, L.P. and their affiliates.

"Class B Stock" means the Class B Stock, par value $0.66 2/3 per share, of the Company.

"Common Stock" means the Common Stock, par value $0.66 2/3 per share, of the Company.

"Initial Issuance Date" means April 19, 2001, the first date of issuance of the Preferred Stock (as defined in the Investment Agreement described below, which definition is incorporated herein by this reference) pursuant to the closing
of the Investment Agreement.

"Investment Agreement" means the Investment Agreement entered in as of April 19, 2001 among the Company and certain investors named therein.
(g)Retirement. The retirement of the Employee at or after age 65.

6.Termination Procedure.

(a)Notice of Termination. Any termination of the Company's employment of Employee, either by the Company or by Employee (other than termination pursuant to Section 5(a) or (b) hereof), shall be communicated by written Notice
of Termination to the other party hereto in accordance with Section 11. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall, where
applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee under the provisions so indicated.

(b)Date of Termination. "Date of Termination" shall mean (i) if Employee's employment by the Company is terminated by Employee's resignation, retirement or other voluntary departure, the date of such event, (ii) if
Employee's employment by the Company is terminated by his death, the date of death, (iii) if Employee's employment by the Company is terminated pursuant to Section 5(c) hereof, thirty (30) days after Notice of Termination is given (provided that Employee
shall not have again become available for service to the Company on a regular basis during such thirty (30) day period), (iv) if Employee's employment by the Company is terminated for Cause, the date specified in the Notice of Termination, and (v) if
Employee's employment by the Company is terminated for any other reason, the date on which a Notice of Termination is given.

7.Compensation During Disability or Upon Termination.

(a)During Disability. During any period that Employee fails to perform his duties under this Agreement as a result of incapacity due to physical or mental illness (a "disability period"), Employee shall continue to
receive his Base Salary at the rate then in effect for such period until his employment by the Company is terminated pursuant to Section 5(c) hereof, provided that payments so made to Employee during the first 180 days of any such disability period shall
be reduced by the sum of the amounts, if any, paid to Employee at or prior to the time of any such payment under disability benefit plans of the Company or under the Social Security disability insurance program, and which amounts were not previously
applied to reduce any such payment. Employee shall also receive a pro rata portion of the Bonus described in Section 3(b) pursuant to the Company's applicable incentive compensation program (the amount of such pro rated Bonus to be determined as though
the target level (or if there is no target level, at 60% of the Base Salary at the rate then in effect) was attained, multiplied by a fraction, the numerator of which is the number of completed months in the then current Bonus program year and the
denominator of which is 12), as such may exist from time to time.

(b)Termination for Employee Resignation, Cause or Retirement. If Employee's employment by the Company is terminated pursuant to Section 5(a), (d) or (g), the Company shall pay Employee his accrued but unpaid Base Salary
through the Date of Termination at the rate in effect at the time Notice of Termination is given, and the Company shall have no further obligations to Employee under this Agreement. If Employee's employment by the Company is terminated by Employee's
retirement, Employee shall also receive a pro rata portion of the Bonus described in Section 3(b) pursuant to the Company's applicable incentive compensation program (the amount of such pro rated Bonus to be determined as though the target level (or if
there is no target level, at 60% of the Base Salary at the rate then in effect) was attained, multiplied by a fraction, the numerator of which is the number of completed months in the then current Bonus program year and the denominator of which is 12), as
such may exist from time to time.

(c)Termination for Death, Disability, Without Cause or by Employee due to a Change of Control. If Employee's employment by the Company is terminated pursuant to Section 5(b), (c), (e) or (f), the Company shall pay to
Employee or his personal representative a lump sum amount equal to two years Base Salary (less withholding for applicable taxes) of Employee in effect on the Date of Termination.

8.Confidentiality. Employee acknowledges that he knows and in the future will know information relating to the Company and its affiliated companies and their respective operations that is confidential or a trade secret. Such
information includes information, whether obtained in writing, in conversation or otherwise, concerning corporate strategy, intent and plans, business operations, pricing, costs, budgets, equipment, the status, scope and term of pending acquisitions,
negotiations and transactions, the terms of existing or proposed business arrangements, contracts and obligations, and corporate and financial reports. Such confidential or trade secret information shall not, however, include information in the public
domain unless Employee has, without authority, made it public.

Employee shall (a) not disclose such information to anyone except in confidence and as is necessary to the performance of his duties for the Company, (b) keep such information confidential, (c) take appropriate precautions to maintain
the confidentiality of such information, and (d) not use such information for personal benefit or the benefit of any competitor or any other person.

Upon termination of his employment by the Company under this Agreement, Employee shall return all materials in his possession or under his control that were prepared by or relate to the Company or its affiliates, including, but not
limited to, materials containing confidential information, files, memorandums, price lists, reports, budgets and handbooks.

Employee's obligation under this Section 8 shall survive the termination of Employee's employment by the Company under this Agreement.

9.Equitable Remedies. The parties acknowledge that irreparable damage will result to the Company from any violation of Section 8 above by Employee. The parties expressly agree that, in addition to any and all remedies
available to the Company for any such violation, the Company shall have the remedy of restraining order and injunction and any such equitable relief as may be declared or issued to enforce the provisions of Section 8 above and Employee agrees not to claim
in any such equitable proceeding that a remedy at law is available to the Company. Notwithstanding anything contained herein to the contrary and if, and only if, any provision of the type contained in Section 8 above, as the case may be, is enforceable in
the jurisdiction in question, if any one or more of the provisions contained in such section shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, such provision shall be construed by limiting and
reducing it so as to be enforceable to the extent compatible with the applicable law in such jurisdiction as it shall then appear.

10.Successors: Binding Agreement.

(a)Company Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all the business of the Company, by agreement in form
and substance satisfactory to Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

(b)Employee's Successors. This Agreement and all rights hereunder shall be binding upon, inure to the benefit of and be enforceable by Employee's personal or legal representatives and heirs.

11.Notices. All notices, requests, demand or other communications under this Agreement shall be in writing addressed as follows:

 

(a)If to the Company, to:

Raymond F. Beagle, Jr.

Lathrop & Gage L.C.

2345 Grand Boulevard

Kansas City, Missouri 64108

(b)If to Employee, to:

John D. McDonald

4417 West 150th Street

Leawood, Kansas 66224

Any such notice, request, demand or other communication shall be effective as of the date of actual delivery thereof. Either party may change such notice address by written notice as provided herein.

12.Total Compensation. The compensation to be paid to Employee under this Agreement shall be in full payment for all services rendered by Employee in any capacity to the Company or any affiliate of the Company.

13.Additional Potential Compensation. Nothing in this Agreement shall prohibit the Company from awarding additional compensation to Employee if it is determined that such compensation is warranted based on Employee's
performance.

14.Other Provisions. This Agreement shall be governed by the laws of the State of Missouri. This Agreement represents the entire agreement of the parties hereto and shall not be amended except by a written agreement signed
by all the parties hereto. This Agreement supersedes any prior oral or written agreements or understandings between the Company or any affiliate of the Company and Employee. This Agreement shall not be assignable by one party without the prior written
consent of the other party, except by the Company if it complies with Section 10 above. In the event one or more of the provisions contained in this Agreement or any application thereof shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions of this Agreement or any other application thereof shall not in any way be affected or impaired thereby. Section headings herein have no legal significance.

15.Arbitration. Any legal dispute related to this Agreement and/or any claim related to this Agreement, or breach thereof, shall, in lieu of being submitted to a court of law, be submitted to arbitration, in accordance with
the applicable dispute resolution procedures of the American Arbitration Association. The award of the arbitrators shall be final and binding upon the parties.

The parties hereto agree that (i) three arbitrators shall be selected pursuant to the rules and procedures of the American Arbitration Association, (ii) at least one arbitrator shall be a licensed attorney, (iii) the arbitrators shall
have the power to award injunctive relief or to direct specific performance, (iv) each of the parties, unless otherwise provided by applicable law and procedures, shall bear its own attorneys' fees, costs and expenses and an equal share of the
arbitrators' and administrative fees of arbitration, and (v) the arbitrators shall award to the prevailing party a sum equal to that party's share of the arbitrators' and administrative fees of arbitration.

Nothing in this section shall be construed as providing Employee a cause of action, remedy or procedure that Employee would not otherwise have under this Agreement or the law. Employee understands that in signing this Agreement he is
waiving any right that he may have to a jury trial or a court trial of any legal dispute or claim as set forth above.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year first above written.

AMC ENTERTAINMENT INC.,

a Delaware corporation

 

By: /s/ Peter C. Brown

Peter C. Brown, Chairman of the Board,

President and Chief Executive Officer
 

AMERICAN MULTI-CINEMA, INC.,

a Missouri corporation

 

By: /s/ Philip M. Singleton

Philip M. Singleton, President and

Chief Operating Officer
 

 

John D. McDonald 

JOHN D. MCDONALD, EMPLOYEEAMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                    BANKERS TRUST COMPANY OF CALIFORNIA, N.A.

                                     Trustee

                    _________________________________________

                         POOLING AND SERVICING AGREEMENT
                            Dated as of June 1, 2001
                    _________________________________________

                Floating Rate Mortgage Pass-Through Certificates

                                  Series 2001-1

<PAGE>

<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

SECTION                                                                                                        PAGE
-------                                                                                                  '      ----

                                                     ARTICLE I

                                                    DEFINITIONS

<S>      <C>                                                                                                   <C>
         1.01.     Defined Terms..................................................................................3
                   Accrued Certificate Interest...................................................................3
                   Addition Notice................................................................................3
                   Adjustable-Rate Mortgage Loan..................................................................3
                   Adjustment Date................................................................................3
                   Affiliate......................................................................................4
                   Agreement......................................................................................4
                   Assignment.....................................................................................4
                   Available Distribution Amount..................................................................4
                   Bankruptcy Code................................................................................5
                   Bankruptcy Loss................................................................................5
                   Book-Entry Certificate.........................................................................5
                   Book-Entry Custodian...........................................................................5
                   Business Day...................................................................................5
                   Certificate....................................................................................5
                   Certificate Factor.............................................................................5
                   Certificateholder" or "Holder..................................................................5
                   Certificate Margin.............................................................................6
                   Certificate Owner..............................................................................6
                   Certificate Principal Balance..................................................................6
                   Certificate Register" and "Certificate Registrar...............................................6
                   Class   .......................................................................................7
                   Class A Certificate............................................................................7
                   Class A Principal Distribution Amount..........................................................7
                   Class CE Certificate...........................................................................7
                   Class Exemption................................................................................7
                   Class M-1 Certificate..........................................................................7
                   Class M-1 Principal Distribution Amount........................................................7
                   Class M-2 Certificate..........................................................................8
                   Class M-2 Principal Distribution Amount........................................................8
                   Class P Certificate............................................................................8
                   Class R-I Interest.............................................................................8
                   Class R-II Interest............................................................................8
                   Closing Date...................................................................................8
                   Code    .......................................................................................8
                   Collection Account.............................................................................8
                   Commission.....................................................................................8
                   Corporate Trust Office.........................................................................9

                                                         i

<PAGE>

SECTION                                                                                                        PAGE

                   Corresponding Certificate......................................................................9
                   Credit Enhancement Percentage..................................................................9
                   Cumulative Loss Percentage.....................................................................9
                   Custodian......................................................................................9
                   Cut-off Date...................................................................................9
                   Debt Service Reduction.........................................................................9
                   Deficient Valuation............................................................................9
                   Definitive Certificates.......................................................................10
                   Deleted Mortgage Loan.........................................................................10
                   Delinquency Percentage........................................................................10
                   Depositor.....................................................................................10
                   Depository....................................................................................10
                   Depository Institution........................................................................10
                   Depository Participant........................................................................10
                   Determination Date............................................................................10
                   Directly Operate..............................................................................10
                   Disqualified Organization.....................................................................11
                   Distribution Account..........................................................................11
                   Distribution Date.............................................................................11
                   Due Date......................................................................................11
                   Due Period....................................................................................11
                   Eligible Account..............................................................................11
                   ERISA   ......................................................................................12
                   Estate in Real Property.......................................................................12
                   Excess Overcollateralized Amount..............................................................12
                   Expense Adjusted Mortgage Rate................................................................12
                   Expense Adjusted Maximum Mortgage Rate........................................................12
                   Extraordinary Trust Fund Expense..............................................................12
                   Fannie Mae....................................................................................12
                   Fixed Rate Mortgage Loan......................................................................12
                   Funding Period................................................................................12
                   FDIC    ......................................................................................12
                   Final Recovery Determination..................................................................12
                   Formula Rate..................................................................................13
                   Freddie Mac...................................................................................13
                   Gross Margin..................................................................................13
                   Independent...................................................................................13
                   Independent Contractor........................................................................13
                   Indenture.....................................................................................13
                   Index   ......................................................................................14
                   Initial Mortgage Loan.........................................................................14
                   Insurance Proceeds............................................................................14
                   Interest Accrual Period.......................................................................14
                   Interest Carry Forward Amount.................................................................14

                                                        ii

<PAGE>

SECTION                                                                                                        PAGE

                   Interest Coverage Account.....................................................................14
                   Interest Coverage Amount......................................................................14
                   Interest Determination Date...................................................................14
                   Interest Distribution Amount..................................................................14
                   Interest Remittance Amount....................................................................15
                   Late Collections..............................................................................15
                   Liquidation Event.............................................................................15
                   Liquidation Proceeds..........................................................................15
                   Loan-to-Value Ratio...........................................................................15
                   London Business Day...........................................................................15
                   Loss Mitigation Action Plan...................................................................15
                   Majority Class CE Certificateholder...........................................................15
                   Master Servicer...............................................................................15
                   Master Servicer Event of Default..............................................................15
                   Master Servicer Prepayment Charge Payment Amount..............................................16
                   Master Servicer Remittance Date...............................................................16
                   Master Servicer Termination Test..............................................................16
                   Maximum Cap Rate..............................................................................16
                   Maximum I-LT5 Uncertificated Interest Deferral Amount.........................................16
                   Maximum Mortgage Rate.........................................................................16
                   Mezzanine Certificate.........................................................................16
                   Minimum Mortgage Rate.........................................................................17
                   Monthly Payment...............................................................................17
                   Moody's ......................................................................................17
                   Mortgage......................................................................................17
                   Mortgage File.................................................................................17
                   Mortgage Loan.................................................................................17
                   Mortgage Loan Purchase Agreement..............................................................17
                   Mortgage Loan Schedule........................................................................17
                   Mortgage Note.................................................................................19
                   Mortgage Pool.................................................................................19
                   Mortgage Rate.................................................................................19
                   Mortgaged Property............................................................................19
                   Mortgagor.....................................................................................20
                   Net Monthly Excess Cashflow...................................................................20
                   Net Mortgage Rate.............................................................................20
                   Net WAC Pass-Through Rate.....................................................................20
                   Net WAC Rate Carryover Amount.................................................................20
                   New Lease.....................................................................................20
                   Nonrecoverable P&I Advance....................................................................20
                   Nonrecoverable Servicing Advance..............................................................21
                   Non-United States Person......................................................................21
                   Notional Amount...............................................................................21
                   Officers' Certificate.........................................................................21

                                                        iii

<PAGE>

SECTION                                                                                                        PAGE

                   One-Month LIBOR...............................................................................21
                   Opinion of Counsel............................................................................21
                   Original Pre-Funded Amount....................................................................22
                   Originator....................................................................................22
                   Overcollateralized Amount.....................................................................22
                   Overcollateralization Deficiency Amount.......................................................22
                   Overcollateralization Increase Amount.........................................................22
                   Overcollateralization Reduction Amount........................................................22
                   Ownership Interest............................................................................22
                   Pass-Through Rate.............................................................................22
                   Percentage Interest...........................................................................23
                   Periodic Rate Cap.............................................................................23
                   Permitted Investments.........................................................................24
                   Permitted Transferee..........................................................................25
                   Person  ......................................................................................25
                   P&I Advance...................................................................................25
                   Plan    ......................................................................................25
                   Pre-Funding Account...........................................................................25
                   Prepayment Assumption.........................................................................25
                   Prepayment Charge.............................................................................26
                   Prepayment Charge Schedule....................................................................26
                   Prepayment Interest Excess....................................................................26
                   Prepayment Interest Shortfall.................................................................26
                   Prepayment Period.............................................................................27
                   Principal Distribution Amount.................................................................27
                   Principal Prepayment..........................................................................28
                   PTCE    ......................................................................................28
                   Purchase Price................................................................................28
                   Qualified Substitute Mortgage Loan............................................................28
                   Rating Agency or Rating Agencies..............................................................29
                   Realized Loss.................................................................................29
                   Record Date...................................................................................30
                   Reference Banks...............................................................................30
                   Refinanced Mortgage Loan......................................................................30
                   Regular Certificate...........................................................................31
                   Regular Interest..............................................................................31
                   Relief Act....................................................................................31
                   Relief Act Interest Shortfall.................................................................31
                   REMIC   ......................................................................................31
                   REMIC I ......................................................................................31
                   REMIC I Interest Loss Allocation Amount.......................................................31
                   REMIC I Overcollateralized Amount.............................................................31
                   REMIC I Principal Loss Allocation Amount......................................................32
                   REMIC I Regular Interest......................................................................32

                                                        iv

<PAGE>

SECTION                                                                                                        PAGE

                   REMIC I Regular Interest I-LT1................................................................32
                   REMIC I Regular Interest I-LT2................................................................32
                   REMIC I Regular Interest I-LT3................................................................32
                   REMIC I Regular Interest I-LT4................................................................32
                   REMIC I Regular Interest I-LT5................................................................33
                   REMIC I Regular Interest I-LTP................................................................33
                   REMIC I Remittance Rate.......................................................................33
                   REMIC I Required Overcollateralization Amount.................................................33
                   REMIC II......................................................................................33
                   REMIC II Certificate..........................................................................33
                   REMIC II Certificateholder....................................................................33
                   REMIC Provisions..............................................................................33
                   Remittance Report.............................................................................33
                   Rents from Real Property......................................................................33
                   REO Account...................................................................................34
                   REO Disposition...............................................................................34
                   REO Imputed Interest..........................................................................34
                   REO Principal Amortization....................................................................34
                   REO Property..................................................................................34
                   Request for Release...........................................................................34
                   Required Overcollateralized Amount............................................................34
                   Reserve Fund..................................................................................34
                   Reserve Interest Rate.........................................................................34
                   Residential Dwelling..........................................................................35
                   Residual Certificate..........................................................................35
                   Residual Interest.............................................................................35
                   Responsible Officer...........................................................................35
                   Scheduled Principal Balance...................................................................35
                   Senior Interest Distribution Amount...........................................................36
                   Servicing Account.............................................................................36
                   Servicing Advances............................................................................36
                   Servicing Fee.................................................................................36
                   Servicing Fee Rate............................................................................36
                   Servicing Officer.............................................................................36
                   Single Certificate............................................................................36
                   S&P     ......................................................................................36
                   Startup Day...................................................................................37
                   Stated Principal Balance......................................................................37
                   Stayed Funds..................................................................................37
                   Stepdown Date.................................................................................37
                   Subsequent Cut-off Date.......................................................................38
                   Subsequent Mortgage Loan......................................................................38
                   Subsequent Mortgage Loan Purchase Agreement...................................................38
                   Subsequent Transfer Date......................................................................38

                                                         v

<PAGE>

SECTION                                                                                                        PAGE

                   Subsequent Transfer Instrument................................................................38
                   Sub-Servicer..................................................................................38
                   Sub-Servicing Account.........................................................................38
                   Sub-Servicing Agreement.......................................................................38
                   Substitution Shortfall Amount.................................................................38
                   Tax Returns...................................................................................38
                   Telerate Page 3750............................................................................38
                   Termination Price.............................................................................38
                   Terminator....................................................................................39
                   Transfer......................................................................................39
                   Transferee....................................................................................39
                   Transferor....................................................................................39
                   Trigger Event.................................................................................39
                   Trust Fund....................................................................................39
                   Trustee ......................................................................................39
                   Trustee's Fee.................................................................................39
                   Trustee's Fee Rate............................................................................39
                   Uncertificated Balance........................................................................39
                   Uncertificated Interest.......................................................................39
                   Underwriters' Exemption.......................................................................40
                   Uninsured Cause...............................................................................40
                   United States Person..........................................................................40
                   Value   ......................................................................................40
                   Voting Rights.................................................................................41
         1.02.     Allocation of Certain Interest Shortfalls.....................................................41
         1.03      Rights of the NIMs Insurer....................................................................41

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

         2.01.     Conveyance of Mortgage Loans..................................................................42
         2.02.     Acceptance of REMIC I by the Trustee..........................................................44
         2.03.     Repurchase or Substitution of Mortgage Loans by the Originator or the
                   Depositor; Payment of Master Servicer Prepayment Charge Payment
                   Amounts.......................................................................................46
         2.04.     [Reserved]....................................................................................49
         2.05.     Representations, Warranties and Covenants of the Master Servicer..............................49
         2.06.     Issuance of the REMIC I Regular Interests and the Class R-I Interest..........................52
         2.07.     Conveyance of the REMIC I Regular Interests; Acceptance of REMIC II by the
                   Trustee.......................................................................................52
         2.09.     Issuance of Class R Certificates..............................................................53
         2.10.     Conveyance of the Subsequent Mortgage Loans...................................................53

                                                        vi

<PAGE>

SECTION                                                                                                        PAGE

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         3.01.     Master Servicer to Act as Master Servicer.....................................................56
         3.02.     Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers........................57
         3.03.     Successor Sub-Servicers.......................................................................59
         3.04.     Liability of the Master Servicer..............................................................59
         3.05.     No Contractual Relationship Between Sub-Servicers and the NIMs Insurer,
                   Trustee or Certificateholders.................................................................59
         3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee..............................59
         3.07.     Collection of Certain Mortgage Loan Payments..................................................60
         3.08.     Sub-Servicing Accounts........................................................................61
         3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts........................61
         3.10.     Collection Account and Distribution Account...................................................62
         3.11.     Withdrawals from the Collection Account and Distribution Account..............................65
         3.12.     Investment of Funds in the Pre-Funding Account, the Interest Coverage Account,
                   the Collection Account and the Distribution Account...........................................67
         3.13.     [intentionally omitted].......................................................................68
         3.14.     Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
                   Coverage......................................................................................68
         3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................70
         3.16.     Realization Upon Defaulted Mortgage Loans.....................................................71
         3.17.     Trustee to Cooperate; Release of Mortgage Files...............................................73
         3.18.     Servicing Compensation........................................................................74
         3.19.     Reports to the Trustee; Collection Account Statements.........................................75
         3.20.     Statement as to Compliance....................................................................75
         3.21.     Independent Public Accountants' Servicing Report..............................................75
         3.22.     Access to Certain Documentation...............................................................76
         3.23.     Title, Management and Disposition of REO Property.............................................76
         3.24.     Obligations of the Master Servicer in Respect of Prepayment Interest
                   Shortfalls....................................................................................80
         3.25.     Obligations of the Master Servicer in Respect of Mortgage Rates and
                   Monthly Payments..............................................................................80
         3.26.     Advance Facility..............................................................................80
         3.27.     PMI Policy; Claims Under the PMI Policy.......................................................81
         3.28      Reserve Fund..................................................................................81

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS

                                                        vii

<PAGE>

SECTION                                                                                                        PAGE

         4.01.     Distributions.................................................................................84
         4.02.     Statements to Certificateholders..............................................................89
         4.03.     Remittance Reports; P&I Advances..............................................................93
         4.04.     Allocation of Realized Losses.................................................................95
         4.05.     Compliance with Withholding Requirements......................................................96
         4.06.     Commission Reporting..........................................................................96
         4.07.     Pre-Funding Account...........................................................................96
         4.08.     Interest Coverage Account.....................................................................98

                                                     ARTICLE V

                                                 THE CERTIFICATES

         5.01.     The Certificates..............................................................................99
         5.02.     Registration of Transfer and Exchange of Certificates........................................101
         5.03.     Mutilated, Destroyed, Lost or Stolen Certificates............................................106
         5.04.     Persons Deemed Owners........................................................................106
         5.05.     Certain Available Information................................................................106

                                                    ARTICLE VI

                                       THE DEPOSITOR AND THE MASTER SERVICER

         6.01.     Liability of the Depositor and the Master Servicer...........................................108
         6.02.     Merger or Consolidation of the Depositor or the Master Servicer..............................108
         6.03.     Limitation on Liability of the Depositor, the Master Servicer and Others.....................108
         6.04.     Limitation on Resignation of the Master Servicer.............................................109
         6.05.     Rights of the Depositor in Respect of the Master Servicer....................................110

                                                    ARTICLE VII

                                                      DEFAULT

         7.01.     Master Servicer Events of Default............................................................111
         7.02.     Trustee to Act; Appointment of Successor.....................................................113
         7.03.     Notification to Certificateholders...........................................................115
         7.04.     Waiver of Master Servicer Events of Default..................................................115

                                                   ARTICLE VIII

                                              CONCERNING THE TRUSTEE

         8.01.     Duties of Trustee............................................................................116
         8.02.     Certain Matters Affecting the Trustee........................................................117

                                                       viii

<PAGE>

SECTION                                                                                                        PAGE

         8.03.     Trustee Not Liable for Certificates or Mortgage Loans........................................118
         8.04.     Trustee May Own Certificates.................................................................118
         8.05.     Trustee's Fees and Expenses..................................................................118
         8.06.     Eligibility Requirements for Trustee.........................................................119
         8.07.     Resignation and Removal of the Trustee.......................................................119
         8.08.     Successor Trustee............................................................................120
         8.09.     Merger or Consolidation of Trustee...........................................................121
         8.10.     Appointment of Co-Trustee or Separate Trustee................................................121
         8.11.     Appointment of Custodians....................................................................122
         8.12.     Appointment of Office or Agency..............................................................122
         8.13.     Representations and Warranties of the Trustee................................................123

                                                    ARTICLE IX

                                                    TERMINATION

         9.01      Termination Upon Repurchase or Liquidation of All Mortgage Loans.............................124
         9.02      Additional Termination Requirements..........................................................126

                                                     ARTICLE X

                                                 REMIC PROVISIONS

         10.01.    REMIC Administration.........................................................................127
         10.02.    Prohibited Transactions and Activities.......................................................129
         10.03.    Master Servicer and Trustee Indemnification..................................................130

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS

         11.01.    Amendment....................................................................................131
         11.02.    Recordation of Agreement; Counterparts.......................................................132
         11.03.    Limitation on Rights of Certificateholders...................................................132
         11.04.    Governing Law................................................................................133
         11.05.    Notices......................................................................................133
         11.06.    Severability of Provisions...................................................................134
         11.07.    Notice to Rating Agencies and the NIMs Insurer...............................................134
         11.08.    Article and Section References...............................................................135
         11.09.    Grant of Security Interest...................................................................135
         11.10     Third Party Rights...........................................................................136
         11.11     NIMS Insurer's Rights........................................................................136

</TABLE>

                                                        ix

<PAGE>

<TABLE>
<CAPTION>

         Exhibits
         --------

<S>      <C>               <C>
         Exhibit A-1       Form of Class A Certificate
         Exhibit A-2       Form of Class M-1 Certificate
         Exhibit A-3       Form of Class M-2 Certificate
         Exhibit A-4       Form of Class CE Certificate
         Exhibit A-5       Form of Class P Certificate
         Exhibit A-6       Form of Class R Certificate
         Exhibit B         [Reserved]
         Exhibit C-1       Form of Trustee's Initial Certification
         Exhibit C-2       Form of Trustee's Interim Certification
         Exhibit C-2       Form of Trustee's Final Certification
         Exhibit D         Form of Mortgage Loan Purchase Agreement
         Exhibit E-1       Request for Release
         Exhibit E-2       Request for Release Mortgage Loans paid in full
         Exhibit F-1       Form of Transferor Representation Letter and Form of Transferee
                           Representation Letter in Connection with Transfer of Class CE  and Class P
                           Certificates Pursuant to Rule 144A Under the 1933 Act
         Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit
                           in Connection with Transfer of Residual Certificates
         Exhibit G         Form of Certification with respect to ERISA and the Code
         Exhibit H         [Reserved]
         Exhibit I         Form of Subsequent Transfer Instrument
         Exhibit J         Form of Addition Notice
         Exhibit O         Loss Mitigation Action Plan

         Schedule 1        Mortgage Loan Schedule
         Schedule 2        Prepayment Charge Schedule
         Schedule 3        PMI Mortgage Loans
</TABLE>

                                        x

<PAGE>

                   This Pooling and Servicing Agreement, is dated and effective
as of June 1, 2001, among AMERIQUEST MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master Servicer and BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee.

                             PRELIMINARY STATEMENT:

                   The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
each REMIC (as defined herein) created hereunder. The Trust Fund will consist of
a segregated pool of assets consisting of the Mortgage Loans, the Pre-Funding
Account and the Interest Coverage Account and certain other related assets
subject to this Agreement.

                   As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (other than any Master Servicer Prepayment Charge Payment
Amounts, the Pre-Funding Account, the Reserve Fund and the Interest Coverage
Account) subject to this Agreement as a REMIC for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC I." The Class
R-I Interest will be the sole class of "residual interests" in REMIC I for
purposes of the REMIC Provisions (as defined herein). The following table
irrevocably sets forth the designation, the REMIC I Remittance Rate, the initial
Uncertificated Balance and, solely for purposes of satisfying Treasury
regulation Section 1.860G- 1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC I Regular Interests (as defined herein). None of the REMIC I
Regular Interests will be certificated.

<TABLE>
<CAPTION>

                                       REMIC I                       Initial                    Latest Possible
        Designation                Remittance Rate            Uncertificated Balance            Maturity Date(1)
        -----------                ---------------            ----------------------            ----------------
<S>     <C>                          <C>                      <C>                               <C>
           I-LT1                     Variable(2)                  $293,999,902.00                June 25, 2031
           I-LT2                     Variable(2)                    $2,812,500.00                June 25, 2031
           I-LT3                     Variable(2)                       $67,500.00                June 25, 2031
           I-LT4                     Variable(2)                       $97,500.00                June 25, 2031
           I-LT5                     Variable(2)                    $3,022,498.00                June 25, 2031
I-LTP                                Variable(2)                          $100.00                June 25, 2031
</TABLE>
_____________________________

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

(2)  Calculated in accordance with the definition of "REMIC I Remittance Rate"
     herein.

<PAGE>

      As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the REMIC I Regular Interests as a REMIC for federal income
tax purposes, and such segregated pool of assets will be designated as "REMIC
II." The Class R-II Interest will evidence the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions under federal income
tax law. The following table irrevocably sets forth the designation, the
Pass-Through Rate, the initial aggregate Certificate Principal Balance and,
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated
classes of Certificates.
<TABLE>
<CAPTION>
                                                                  Initial Aggregate               Latest Possible
     Designation                       Pass-Through Rate    Certificate Principal Balance        Maturity Date(1)
     -----------                       -----------------    -----------------------------        ----------------
<S>                                     <C>                 <C>                                   <C>
    Class A                               Variable(2)             $281,250,000.00                 June 25, 2031
    Class M-1                             Variable(2)               $6,750,000.00                 June 25, 2031
    Class M-2                             Variable(2)               $9,750,000.00                 June 25, 2031
    Class CE                              Variable(3)               $2,249,900.00                 June 25, 2031
    Class P                                 N/A(4)                        $100.00                 June 25, 2031
</TABLE>
_____________________________

(1)   Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
      regulations, the Distribution Date immediately following the maturity date
      for the Mortgage Loans with the latest maturity date has been designated
      as the "latest possible maturity date" for each Class of Certificates.

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

(3)   The Class CE Certificates will accrue interest at their variable
      Pass-Through Rate on the Notional Amount of the Class CE Certificates
      outstanding from time to time which shall equal the Uncertificated Balance
      of REMIC I Regular Interests. The Class CE Certificates will not accrue
      interest on their Certificate Principal Balance.

(4)   The Class P Certificates will not accrue interest.

                  As of the Cut-off Date, the Initial Mortgage Loans had an
aggregate Scheduled Principal Balance equal to $239,276,376.74. The amount
deposited by the Depositor in the Pre- Funding Account on the Closing Date is
the Original Pre-Funded Amount.

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

                                        2

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01.             Defined Terms.

                  Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months and all calculations on each Regular Interest shall be made
on the basis of a 360-day year and the actual number of days in the month.

                  "Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount, in the case of the
Class CE Certificates, of such Certificate immediately prior to such
Distribution Date. The Class P Certificates and the Class R Certificates are not
entitled to distributions in respect of interest and, accordingly, will not
accrue interest. All distributions of interest on the Class A Certificates, the
Mezzanine Certificates and the Class CE Certificates will be calculated on the
basis of a 360-day year and the actual number of days in the applicable Interest
Accrual Period. Accrued Certificate Interest with respect to each Distribution
Date, as to any Class A Certificate, Mezzanine Certificate or Class CE
Certificate, shall be reduced by an amount equal to the portion allocable to
such Certificate pursuant to Section 1.02 hereof of the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the extent
not covered by payments pursuant to Section 3.24 and (b) the aggregate amount of
any Relief Act Interest Shortfall, if any, for such Distribution Date. In
addition, Accrued Certificate Interest with respect to each Distribution Date,
as to any Class CE Certificate, shall be reduced by an amount equal to the
portion allocable to such Class CE Certificate of Realized Losses, if any,
pursuant to Section 4.04 hereof.

                  "Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.11, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the related Subsequent Cut-off Date. The Addition Notice shall be given not
later than three Business Days prior to the related Subsequent Transfer Date and
shall be substantially in the form of Exhibit J.

                  "Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to adjustment.

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

                                        3

<PAGE>

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

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

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom if applicable,
the mortgage recordation information which has not been returned by the
applicable recorder's office and/or the assignee's name), which is sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect of record the sale of the Mortgage.

                  "Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Determination Date, (b) the aggregate of any
amounts received in respect of an REO Property withdrawn from any REO Account
and deposited in the Distribution Account for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any amounts deposited in the Distribution
Account by the Master Servicer in respect of Prepayment Interest Shortfalls for
such Distribution Date pursuant to Section 3.24, (d) the aggregate of any P&I
Advances made by the Master Servicer for such Distribution Date pursuant to
Section 4.03, (e) the aggregate of any advances made by the Trustee for such
Distribution Date pursuant to Section 7.02(b), (f) with respect to the
Distribution Date immediately following the end of the Funding Period, any
amounts in the Pre-Funding Account after giving effect to any purchase of
Subsequent Mortgage Loans and (g) with respect to each Distribution Date during
the Funding Period and on the Distribution Date immediately following the end of
the Funding Period, any amounts withdrawn by the Trustee from the Interest
Coverage Account for distribution on the Certificates, reduced (to not less than
zero) by (2) the sum of (x) the portion of the amount described in clause (1)(a)
above that represents (i) Monthly Payments on the Mortgage Loans received from a
Mortgagor on or prior to the Determination Date but due during any Due Period
subsequent to the related Due Period, (ii) Principal Prepayments on the Mortgage
Loans received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Originator or any Sub-Servicer pursuant to Section
3.11 or Section 3.12 or otherwise payable in respect of Extraordinary Trust Fund
Expenses, (v) Stayed Funds, (vi) the PMI Insurer Fee payable from the
Distribution Account, (vii) the Trustee Fee payable from the Distribution
Account pursuant to Section 8.05, (viii) amounts deposited in the Collection
Account or the Distribution Account in error

                                        4

<PAGE>

and (ix) the amount of any Prepayment Charges collected by the Master Servicer
and the amount of any Master Servicer Prepayment Charge Payment Amounts and (y)
amounts reimbursable to the Trustee for an advance made pursuant to Section
7.02(b) which advance the Trustee has determined to be nonrecoverable from the
Stayed Funds in respect of which it was made.

                  "Bankruptcy Code":  The Bankruptcy Reform Act of 1978 (Title
11 of the United States Code), as amended.

                  "Bankruptcy Loss":  With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.

                  "Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee. Initially, the Book-Entry Certificates
will be the Class A Certificates and the Mezzanine Certificates.

                  "Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.

                  "Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of
California, the State of New York, or in the city in which the Corporate Trust
Office of the Trustee is located, are authorized or obligated by law or
executive order to be closed.

                  "Certificate": Any one of the Depositor's Floating Rate
Mortgage Pass-Through Certificates, Series 2001-1, Class A, Class M-1, Class
M-2, Class CE, Class P and Class R, issued under this Agreement.

                  "Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance (and in the case of the Class CE Certificates, the Notional
Amount) of such Class of Certificates on such Distribution Date (after giving
effect to any distributions of principal and allocations of Realized Losses in
reduction of the Certificate Principal Balance (and in the case of the Class CE
Certificates, the Notional Amount) of such Class of Certificates to be made on
such Distribution Date), and the denominator of which is the initial aggregate
Certificate Principal Balance (and in the case of the Class CE Certificates, the
Notional Amount) of such Class of Certificates as of the Closing Date.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee and the NIMs Insurer may
conclusively rely upon a certificate of the Depositor or the Master Servicer in
determining whether a Certificate is held by an Affiliate thereof. All
references herein to "Holders" or "Certificateholders" shall reflect the

                                        5

<PAGE>

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

                  "Certificate Margin": With respect to the Class A Certificates
and REMIC I Regular Interest I-LT2, 0.29% in the case of each Distribution Date
through and including the Distribution Date on which the aggregate principal
balance of the Mortgage Loans (and properties acquired in respect thereof)
remaining in the Trust is reduced to less than 10% of the sum of the aggregate
principal balance of the Initial Mortgage Loans as of the Cut-off Date and the
Original Pre-Funded Amount, or 0.58%, in the case of any Distribution Date
thereafter.

                  With respect to the Class M-1 Certificates and REMIC I Regular
Interest I-LT3, 0.70% in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust is reduced to less than 10% of the sum of the aggregate principal balance
of the Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded
Amount, or 1.05%, in the case of any Distribution Date thereafter.

                  With respect to the Class M-2 Certificates and REMIC I Regular
Interest I-LT4, 1.15% in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust is reduced to less than 10% of the sum of the aggregate principal balance
of the Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded
Amount, or 1.725%, in the case of any Distribution Date thereafter.

                  "Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, minus all
distributions allocable to principal made thereon and in the case of a Mezzanine
Certificate, Realized Losses allocated thereto on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the first Distribution Date, the initial Certificate Principal Balance
of such Certificate, as stated on the face thereof). With respect to each Class
CE Certificate as of any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate times the excess, if any, of
(A) the then aggregate Uncertificated Balances of the REMIC I Regular Interests
over (B) the then aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates then
outstanding.

                  "Certificate Register" and "Certificate Registrar":  The
register maintained and the registrar appointed pursuant to Section 5.02.

                                        6

<PAGE>

                  "Class":  Collectively, all of the Certificates bearing the
same class designation.

                  "Class A Certificate": Any one of the Class A Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 87.50% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$1,500,000.00.

                  "Class CE Certificate": Any one of the Class CE Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class Exemption": A class exemption granted by the DOL, which
provides relief from certain of the prohibited transaction provisions of ERISA
and the related excise tax provisions of the Code.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
92.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus $1,500,000.00.

                                        7

<PAGE>

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 98.50% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$1,500,000.00.

                  "Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC II for purposes of the REMIC Provisions.

                  "Class R Certificate": Any one of the Class R Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6 and
evidencing the ownership of the Class R-I Interest and the Class R-II Interest.

                  "Class R-I Interest":  The uncertificated Residual Interest in
REMIC I.

                  "Class R-II Interest":  The uncertificated Residual Interest
in REMIC II.

                  "Closing Date":  June 25, 2001.

                  "Code":  The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "Ameriquest Mortgage Company, as Master Servicer for Bankers Trust
Company of California, N.A., as Trustee, in trust for the registered holders of
Ameriquest Mortgage Securities Inc., Floating Rate Mortgage Pass-Through
Certificates, Series 2001-1" The Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                                        8

<PAGE>

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 1761 East St. Andrew Place,
Santa Ana, CA 92705-4934, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders, the Depositor and the
Master Servicer.

                  "Corresponding Certificate": With respect to (i) REMIC I
Regular Interest I-LT2, (ii) REMIC I Regular Interest I-LT3, (iii) REMIC I
Regular Interest I-LT4 and (iv) REMIC I Regular Interest I-LTP, (i) the Class A
Certificates, (ii) Class M-1 Certificates, (iii) Class M-2 Certificates and (iv)
Class P Certificates, respectively.

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, calculated after taking into account
distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates and the
Class CE Certificates, and the denominator of which is the sum of (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (ii) the amount on deposit in the Pre-Funding Account exclusive of
investment earnings therein.

                  "Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Initial Mortgage Loans as of the
Cut-off Date and the Original Pre-Funded Amount.

                  "Custodian":  A Custodian, which shall initially be Bankers
Trust Company of California, N.A.

                  "Cut-off Date": With respect to each Initial Mortgage Loan,
June 1, 2001. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

                  "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.

                  "Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.

                                        9

<PAGE>

                  "Definitive Certificates":  As defined in Section 5.01(b).

                  "Deleted Mortgage Loan":  A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.

                  "Delinquency Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate Stated Principal Balance of all Mortgage Loans as of the last day of
the previous calendar month that, as of such last day of the previous calendar
month, are 60 or more days delinquent, are in foreclosure, have been converted
to REO Properties or have related borrowers that are the subject of bankruptcy
proceedings, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans and REO Properties as of the last day of the
previous calendar month; provided, however, that any Mortgage Loan purchased by
the Master Servicer pursuant to Section 3.16(c) shall not be included in either
the numerator or the denominator for purposes of calculating the Delinquency
Percentage.

                  "Depositor": Ameriquest Mortgage Securities Inc., a Delaware
corporation, or its successor in interest.

                  "Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Moody's and A-1 by S&P (or comparable ratings if Moody's and
S&P are not the Rating Agencies).

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

                  "Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 1st day is not a Business Day, the Business Day immediately preceding such
15th day.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because

                                       10

<PAGE>

the Trustee (or the Master Servicer on behalf of the Trustee) renews leases,
deals with taxes and insurance, or maintains and/or prepares such REO Property
for sale.

                  "Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Freddie Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any of REMIC I or REMIC II or any
Person having an Ownership Interest in any Class of Certificates (other than
such Person) to incur a liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the Transfer of an Ownership
Interest in a Residual Certificate to such Person. The terms "United States,"
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.

                  "Distribution Account":  The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Bankers Trust Company of California, N.A., as Trustee, in trust for
the registered holders of Ameriquest Mortgage Securities Inc., Floating Rate
Mortgage Pass-Through Certificates, Series 2001-1." The Distribution Account
must be an Eligible Account.

                  "Distribution Date":  The 25th day of any month, or if such
25th day is not a Business Day, the next succeeding Business Day, commencing in
July 2001.

                  "Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.

                  "Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month immediately preceding the month
in which such Distribution Date occurs and ending on the related Due Date.

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution or trust company the short-term
unsecured debt obligations of which are rated P-1 by Moody's and A-1+ by S&P (or
comparable ratings if Moody's and S&P are not the Rating Agencies) at the time
any amounts are held on deposit therein, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity. Eligible Accounts may bear interest.

                                       11

<PAGE>

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

                  "Estate in Real Property":  A fee simple estate in a parcel of
land.

                  "Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
over (ii) the Required Overcollateralization Amount for such Distribution Date.

                  "Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Mortgage Rate thereon as of the first
day of the month preceding the month in which the Distribution Date occurs minus
the sum of (i) the Trustee Fee Rate, (ii) the Servicing Fee Rate and (iii) the
PMI Insurer Fee Rate, if applicable.

                  "Expense Adjusted Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Maximum Mortgage Rate (in the
case any Adjustable-Rate Mortgage Loan) or Mortgage Rate (in the case of any
Fixed Rate Mortgage Loan) thereon as of the first day of the month preceding the
month in which the Distribution Date occurs minus the sum of (i) the Trustee Fee
Rate, (ii) the Servicing Fee Rate and (iii) the PMI Insurer Fee Rate, if
applicable.

                  "Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee, or any director, officer, employee or agent of the Trustee, from
the Trust Fund pursuant to Section 8.05, any amounts payable from the
Distribution Account in respect of taxes pursuant to Section 10.01(g)(iii) and
any amounts payable by the Trustee for the recording of the assignments of
mortgage pursuant to Section 2.01.

                  "Fannie Mae":  Fannie Mae, formally known as the Federal
National Mortgage Association, or any successor thereto.

                  "Fixed Rate Mortgage Loan": A first lien Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto. The Fixed Rate
Mortgage Loans are identified as such on the Mortgage Loan Schedule.

                  "Funding Period": The period beginning on the Closing Date and
ending on the earlier of the date on which (a) the amount on deposit in the
Pre-Funding Account is reduced to zero or (b) 2:00 p.m., New York City time, on
July 24, 2001.

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

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator, the Depositor or the Master Servicer pursuant to or
as contemplated by Section 2.03, Section 3.16(c) or Section 9.01), a
determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith

                                       12

<PAGE>

judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Master Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.

                  "Formula Rate": For any Distribution Date and the Class A
Certificates, the Mezzanine Certificates, REMIC I Regular Interest I-LT2, REMIC
I Regular Interest I-LT3 and REMIC I Regular Interest I-LT4, the lesser of (i)
One-Month LIBOR plus the related Certificate Margin and (ii) the Maximum Cap
Rate.

                  "Freddie Mac":  Freddie Mac, formally known as the Federal
Home Loan Mortgage Corporation, or any successor thereto.

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

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Originator and their respective Affiliates, (b) does not have any
direct financial interest in or any material indirect financial interest in the
Depositor, the Originator, the Master Servicer or any Affiliate thereof, and (c)
is not connected with the Depositor, the Originator, the Master Servicer or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Originator,
the Master Servicer or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any class of securities issued by the
Depositor or the Master Servicer or any Affiliate thereof, as the case may be.

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I were a
real estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Master Servicer) if the Trustee has received an Opinion of
Counsel to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.

                  "Indenture":  An indenture relating to the issuance of notes
guaranteed by the NIMs Insurer.

                                       13

<PAGE>

                  "Index": With respect to each Adjustable-Rate Mortgage Loan
and each related Adjustment Date, the average of the interbank offered rates for
six-month United States dollar deposits in the London market as published in THE
WALL STREET JOURNAL and as most recently available as of the first business day
45 days or more prior to such Adjustment Date, as specified in the related
Mortgage Note.

                  "Initial Mortgage Loan": Any of the Mortgage Loans included in
REMIC I as of the Closing Date.

                  "Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan (including the PMI
Policy), to the extent such proceeds are not to be applied to the restoration of
the related Mortgaged Property or released to the Mortgagor in accordance with
the procedures that the Master Servicer would follow in servicing mortgage loans
held for its own account, subject to the terms and conditions of the related
Mortgage Note and Mortgage.

                  "Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates, the Mezzanine Certificates and each
uncertificated Regular Interest, the period commencing on the Distribution Date
of the month immediately preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, commencing on the
Closing Date) and ending on the day preceding such Distribution Date.

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

                  "Interest Coverage Account":  The account established and
maintained pursuant to Section 4.08.

                  "Interest Coverage Amount": The amount to be paid by the
Depositor to the Trustee for deposit into the Interest Coverage Account on the
Closing Date pursuant to Section 4.08, which amount is $211,368.00.

                  "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates and any uncertificated Regular
Interest, and any Interest Accrual Period therefor, the second London Business
Day preceding the commencement of such Interest Accrual Period.

                  "Interest Distribution Amount": With respect to any
Distribution Date, any Class A Certificate, any Mezzanine Certificate and any
Class CE Certificate, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.

                                       14

<PAGE>

                  "Interest Remittance Amount":  With respect to any
Distribution Date, that portion of the Available Distribution Amount for such
Distribution Date allocable to interest.

                  "Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 9.01.

                  "Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Master Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.

                  "Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.

                  "London Business Day":  Any day on which banks in the City of
London are open and conducting transactions in United States dollars.

                  "Loss Mitigation Action Plan": The policies and procedures set
forth in Exhibit O hereto relating to the realization on delinquent Mortgage
Loans, which are incorporated by reference into this Agreement shall be deemed a
part hereof.

                  "Majority Class CE Certificateholder": Any single Holder or
group of Holders of Class CE Certificates representing a greater than 50%
Percentage Interest in such Class.

                  "Master Servicer":  Ameriquest Mortgage Company ("Ameriquest")
or any successor master servicer appointed as herein provided, in its capacity
as Master Servicer hereunder.

                  "Master Servicer Event of Default":  One or more of the events
described in Section 7.01.

                                       15

<PAGE>

                  "Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC I Remittance Rate for each of the REMIC I Regular
Interests, with the rate on each REMIC I Regular Interest (other than REMIC I
Regular Interest I-LT5) subject to a cap equal to (A) with respect to the
Distribution Date in July 2001, 6.9491%, and (B) with respect to each
Distribution Date thereafter, the lesser of (i) the related Formula Rate and
(ii) the Net WAC Pass-Through Rate for the purpose of this calculation for such
Distribution Date and with the rate on REMIC I Regular Interest I-LT5 subject to
a cap of zero for the purpose of this calculation.

                  "Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer in respect of any waived Prepayment
Charges pursuant to Section 2.03(b).

                  "Master Servicer Remittance Date":  With respect to any
Distribution Date, 3:00 p.m. New York time on the last Business Day preceding
the related Distribution Date.

                  "Master Servicer Reporting Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the 18th day of the calendar month
in which such Distribution Date occurs or, if such 18th day is not a Business
Day, the Business Day immediately succeeding such 18th day.

                  "Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds 4.0%.

                  "Maximum Cap Rate": For any Distribution Date a per annum rate
equal to the product of (x) the weighted average of the Expense Adjusted Maximum
Mortgage Rates of the Mortgage Loans, weighted based on their Scheduled
Principal Balances as of the first day of the calendar month preceding the month
in which the Distribution Date occurs (after giving effect to unscheduled
collections of principal received during the related Prepayment Period) and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period.

                  "Maximum I-LT5 Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LT5 for such
Distribution Date on a balance equal to (a) the Uncertificated Balance of REMIC
I Regular Interest I-LT5 minus (b) the REMIC I Overcollateralization Amount, in
each case for such Distribution Date, over (ii) Uncertificated Interest on REMIC
I Regular Interest I-LT2, REMIC I Regular Interest I-LT3 and REMIC I Regular
Interest I-LT4 for such Distribution Date, with the rate on each of REMIC I
Regular Interest I-LT2, REMIC I Regular Interest I-LT3 and REMIC I Regular
Interest I-LT4 subject to a cap equal to (A) with respect to the Distribution
Date in July 2001, 6.9491%, and (B) with respect to each Distribution Date
thereafter, the lesser of (i) the related Formula Rate and (ii) the Net Wac
Pass- Through Rate.

                  "Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.

                  "Mezzanine Certificate":  Any Class M-1 Certificates or Class
M-2 Certificates.

                                       16

<PAGE>

                  "Minimum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

                  "Moody's":   Moody's Investors Service, or its successor in
interest.

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

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

                  "Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as
held from time to time held as a part of REMIC I, the Mortgage Loans so held
being identified in the Mortgage Loan Schedule.

                  "Mortgage Loan Purchase Agreement": The agreement between the
Originator and the Depositor, regarding the transfer of the Mortgage Loans by
the Originator to or at the direction of the Depositor, substantially in the
form of Exhibit D annexed hereto.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, attached hereto as Schedule 1 as
supplemented by each schedule of Subsequent Mortgage Loans attached to a
Subsequent Transfer Instrument. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:

               (i)  the Originator's Mortgage Loan identifying number;

               (ii) the Mortgagor's name;

              (iii) the street address of the Mortgaged Property including the
                    state and zip code;

               (iv) a code indicating whether the Mortgaged Property is
                    owner-occupied;

               (v)  the type of Residential Dwelling constituting the Mortgaged
                    Property;

               (vi) the original months to maturity;

                                       17

<PAGE>

              (vii) the Loan-to-Value Ratio at origination;

             (viii) the Mortgage Rate in effect immediately following the
                    Cut-off Date (or the related Subsequent Cut-off Date, with
                    respect to a Subsequent Mortgage Loan);

               (ix) the date on which the first Monthly Payment was due on the
                    Mortgage Loan;

               (x)  the stated maturity date;

               (xi) the amount of the Monthly Payment due on the first Due Date
                    after the Cut-off Date (or the related Subsequent Cut-off
                    Date, with respect to a Subsequent Mortgage Loan);

              (xii) the last Due Date on which a Monthly Payment was actually
                    applied to the unpaid Stated Principal Balance;

             (xiii) the original principal amount of the Mortgage Loan;

              (xiv) the Scheduled Principal Balance of the Mortgage Loan as of
                    the close of business on the Cut-off Date (or the related
                    Subsequent Cut-off Date, with respect to a Subsequent
                    Mortgage Loan);

               (xv) with respect to each Adjustable-Rate Mortgage Loan, the
                    Gross Margin;

              (xvi) a code indicating the purpose of the Mortgage Loan (I.E.,
                    purchase financing, rate/term refinancing, cash-out
                    refinancing);

             (xvii) with respect to each Adjustable-Rate Mortgage Loan, the
                    Maximum Mortgage Rate;

            (xviii) with respect to each Adjustable-Rate Mortgage Loan, the
                    Minimum Mortgage Rate;

              (xix) the Mortgage Rate at origination;

               (xx) with respect to each Adjustable-Rate Mortgage Loan, the
                    Periodic Rate Cap and the maximum first Adjustment Date
                    Mortgage Rate adjustment;

              (xxi) a code indicating the documentation program (I.E., Full
                    Documentation, Fast Trac or Stated Income);

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

            (xxiii) the risk grade;

                                       18

<PAGE>

              (xxiv) the Value of the Mortgaged Property;

               (xxv) the sale price of the Mortgaged Property, if applicable;

              (xxvi) whether such Mortgage Loan is covered under the PMI
                     Policy; and

             (xxvii) a code indicating the underwriting program (i.e. Standard
                     or LTV Plus).

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan): (1) the number of Mortgage Loans; (2) the current principal balance of
the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. The Mortgage
Loan Schedule shall be amended from time to time by the Depositor in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, the Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.

                  "Mortgage Note":  The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.

                  "Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 from time to time, and any REO Properties acquired in respect
thereof.

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate with
respect to the Adjustable-Rate Mortgage Loans, (A) as of any date of
determination until the first Adjustment Date following the Cut-off Date (or
Subsequent Cut-off Date, with respect to a Subsequent Mortgage Loan) shall be
the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect
immediately following the Cut-off Date (or Subsequent Cut-off Date, with respect
to a Subsequent Mortgage Loan) and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date
equal to the sum, rounded to the nearest 0.125% as provided in the Mortgage
Note, of the Index, as most recently available as of a date prior to the
Adjustment Date as set forth in the related Mortgage Note, plus the related
Gross Margin; provided that the Mortgage Rate on such Adjustable-Rate Mortgage
Loan on any Adjustment Date shall never be more than the lesser of (i) the sum
of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate,
and shall never be less than the greater of (i) the Mortgage Rate in effect
immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and
(ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that
becomes an REO Property, as of any date of determination, the annual rate
determined in accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.

                  "Mortgaged Property": The underlying property identified in
the related Mortgage as securing a Mortgage Loan, including any REO Property,
consisting of an Estate in Real Property improved by a Residential Dwelling
(excluding, for purposes of construing the representations or

                                       19

<PAGE>

warranties made in the Mortgage Loan Purchase Agreement, any improvements
thereupon not considered by the appraiser in determining the value of such
Mortgaged Property).

                  "Mortgagor":  The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Senior Interest Distribution Amount payable to the holders of the Class
A Certificates and the Interest Distribution Amounts payable to the Mezzanine
Certificates and (B) the sum of the amounts described in clauses (b)(i) through
(iii) of the definition of Principal Distribution Amount.

                  "Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.

                  "Net WAC Pass-Through Rate": With respect to REMIC I Regular
Interest I-LT2, REMIC I Regular Interest I-LT3 and REMIC I Regular Interest
I-LT4, the Class A Certificates and the Mezzanine Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates of the Mortgage Loans, weighted
based on their Scheduled Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs (after giving
effect to unscheduled collections of principal received during the related
Prepayment Period) and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period.

                  "Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest payable to such Class
of Certificates on such Distribution Date calculated at the related Pass-Through
Rate for such Distribution Date and (B) the related Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the related Pass-Through Rate for such Class
of Certificates for such Distribution Date.

                  "New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.

                  "NIMs Insurer": Any insurer that is guaranteeing certain
payments under notes issued by a trust, the principal assets of which include
all or a portion of the Class CE Certificates, the Class P Certificates and/or
the Class R Certificates.

                  "Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately

                                       20

<PAGE>

recoverable from related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

                  "Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, will
not or, in the case of a proposed Servicing Advance, would not be ultimately
recoverable from related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

                  "Non-United States Person": Any Person other than a United
States Person.

                  "Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC I Regular
Interests for such Distribution Date.

                  "Officers' Certificate": With respect to the Depositor, a
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or a vice president (however denominated), and by the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries. With
respect to the Master Servicer, any officer who is authorized to act for the
Master Servicer in matters relating to this Agreement, and whose action is
binding upon the Master Servicer, initially including those individuals whose
names appear on the list of authorized officers delivered at the closing.

                  "One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, REMIC I Regular Interest I-LT2, REMIC I Regular
Interest I-LT3, and REMIC I Regular Interest I-LT4 and any Interest Accrual
Period therefor, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such Interest Determination Date; provided that if such rate does not
appear on Telerate Page 3750, the rate for such date will be determined on the
basis of the offered rates of the Reference Banks for one-month U.S. dollar
deposits, as of 11:00 a.m. (London time) on such Interest Determination Date. In
such event, the Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If on such Interest
Determination Date, two or more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic
mean of such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) One-Month LIBOR as determined
on the previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above,
One-Month LIBOR for an Interest Determination Date would be based on One-Month
LIBOR for the previous Interest Determination Date for the third consecutive
Interest Determination Date, the Trustee shall select, after consultation with
the NIMS Insurer, an alternative comparable index (over which the Trustee has no
control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.

                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master Servicer
acceptable to the Trustee, except that

                                       21

<PAGE>

any opinion of counsel relating to (a) the qualification of any of REMIC I or
REMIC II as a REMIC or (b) compliance with the REMIC Provisions must be an
opinion of Independent counsel.

                  "Original Pre-Funded Amount": The amount deposited by the
Depositor in the Pre- Funding Account on the Closing Date, which amount is
$60,723,623.26.

                  "Originator": Ameriquest Mortgage Company, or its successor in
interest, in its capacity as originator under the Mortgage Loan Purchase
Agreement.

                  "Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the sum of the aggregate Stated Principal
Balances of the Mortgage Loans and REO Properties immediately following such
Distribution Date and the amount on deposit in the Pre- Funding Account as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period), exclusive of any investment earnings therein over
(b) the sum of the aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates as of such
Distribution Date (after taking into account the payment of the amounts
described in clauses (b)(i) through (iv) of the definition of Principal
Distribution Amount on such Distribution Date).

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Required Overcollateralization
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date prior to taking into account the
payment of any Overcollateralization Increase Amount on such Distribution Date.

                  "Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date (after taking into account the payment of the
Principal Distribution Amount on such Distribution Date, exclusive of the
payment of any Overcollateralization Increase Amount) and (b) the amount of
Accrued Certificate Interest payable on the Class CE Certificates on such
Distribution Date as reduced by Realized Losses allocated thereto with respect
to such Distribution Date pursuant to Section 4.04.

                  "Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the sum of the amounts available for
distribution specified in clauses (b)(i) through (iii) of the definition of
Principal Distribution Amount.

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

                  "Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution Date and (y) the Net WAC Pass-Through
Rate for such Distribution Date. With respect to the Class CE Certificates and
any Distribution Date, a rate per annum equal to the percentage equivalent of a
fraction, the numerator of which is the sum of the amounts calculated pursuant
to

                                       22

<PAGE>

clauses (A) through (F) below, and the denominator of which is the
Uncertificated Balance of the REMIC I Regular Interests. For purposes of
calculating the Pass-Through Rate for the Class CE Certificates, the numerator
is equal to the sum of the following components:

                  (A) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT1 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LT1;

                  (B) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT2 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LT2;

                  (C) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT3 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LT3;

                  (D) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT4 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LT4;

                  (E) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LT5 minus the Marker Rate, applied to an amount equal to the Uncertificated
Balance of REMIC I Regular Interest I-LT5; and

                  (F) 100% of the Uncertificated Interest on REMIC I Regular
Interest I-LTP

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance of all of the Certificates of such Class.
The Class A Certificates and the Mezzanine Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof.
The Class P Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $20 and
integral multiples thereof. The Class CE Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof;
provided, however, that a single Certificate of such Class of Certificates may
be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance of such Class or to an otherwise
authorized denomination for such Class plus such remainder. With respect to any
Residual Certificate, the undivided percentage ownership in such Class evidenced
by such Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and multiples thereof.

                  "Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the

                                       23

<PAGE>

maximum amount by which the Mortgage Rate for such Mortgage Loan may increase or
decrease (without regard to the Maximum Mortgage Rate or the Minimum Mortgage
Rate) on such Adjustment Date from the Mortgage Rate in effect immediately prior
to such Adjustment Date.

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the NIMs
Insurer, the Trustee or any of their respective Affiliates:

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

                           (ii) demand and time deposits in, certificates of
         deposit of, or bankers' acceptances (which shall each have an original
         maturity of not more than 90 days and, in the case of bankers'
         acceptances, shall in no event have an original maturity of more than
         365 days or a remaining maturity of more than 30 days) denominated in
         United States dollars and issued by, any Depository Institution;

                           (iii) repurchase obligations with respect to any
         security described in clause (i) above entered into with a Depository
         Institution (acting as principal);

                           (iv) securities bearing interest or sold at a
         discount that are issued by any corporation incorporated under the laws
         of the United States of America or any state thereof and that are rated
         by each Rating Agency that rates such securities in its highest
         long-term unsecured rating categories at the time of such investment or
         contractual commitment providing for such investment;

                           (v) commercial paper (including both
         non-interest-bearing discount obligations and interest-bearing
         obligations payable on demand or on a specified date not more than 30
         days after the date of acquisition thereof) that is rated by each
         Rating Agency that rates such securities in its highest short-term
         unsecured debt rating available at the time of such investment;

                           (vi) units of money market funds, including money
         market funds advised by the Trustee or an Affiliate thereof, that have
         been rated "Aaa" by Moody's and "AAA" by S & P; and

                           (viii) if previously confirmed in writing to the
         Trustee and consented to by the NIMS Insurer, any other demand, money
         market or time deposit, or any other obligation, security or
         investment, as may be acceptable to the Rating Agencies as a permitted
         investment of funds backing securities having ratings equivalent to its
         highest initial rating of the Class A Certificates;

provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal

                                       24

<PAGE>

payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.

                  "Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.

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

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure of deed in lieu of foreclosure as
determined pursuant to Section 4.03.

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA and Section 4975 of the Code.

                  "PMI Insurer": Mortgage Guaranty Insurance Corporation, a
monoline private insurance company organized and created under the laws of the
State of Wisconsin, or its successors in interest.

                  "PMI Insurer Fee": The amount payable to the PMI Insurer on
each Distribution Date, which amount shall equal the product of (i) the PMI
Insurer Fee Rate, multiplied by (ii) the aggregate Scheduled Principal Balance
of the PMI Mortgage Loans and any related REO Properties as of the first day of
the related Due Period.

                  "PMI Insurer Fee Rate": 1.18% per annum.

                  "PMI Mortgage Loans": The list of Mortgage Loans insured by
the PMI Insurer attached hereto as Schedule 3.

                  "PMI Policy": The Primary Mortgage Insurance Policy
No.04-690-4-4160 with respect to the PMI Mortgage Loans and all endorsements
thereto dated the Closing Date, issued by the PMI Insurer.

                  "Pre-Funding Account": The account established and maintained
pursuant to Section 4.07.

                  "Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 28% CPR. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on

                                       25

<PAGE>

the Certificates for federal income tax purposes. A CPR (or Constant Prepayment
Rate) represents an annualized constant assumed rate of prepayment each month of
a pool of mortgage loans relative to its outstanding principal balance for the
life of such pool.

                  "Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, penalty or charge payable by a Mortgagor in connection
with any Principal Prepayment pursuant to the terms of the related Mortgage Note
as from time to time held as a part of the Trust Fund, the Prepayment Charges so
held being identified in the Prepayment Charge Schedule (other than any Master
Servicer Prepayment Charge Payment Amount).

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto) as
supplemented by each schedule of Subsequent Mortgage Loans which by their terms
have related Prepayment Charges. The Prepayment Charge Schedule shall set forth
the following information with respect to each Prepayment Charge:

               (i)  the Master Servicer's Mortgage Loan identifying number;

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

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

               (iv) the term of the Prepayment Charge;

               (v)  the original principal balance of the related Mortgage Loan;

               (vi) the principal balance of the related Mortgage Loan as of the
                    Cut-off Date (or the related Subsequent Cut-off Date, with
                    respect to a Subsequent Mortgage Loan);

                  The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance with the provisions of this Agreement
and a copy of such amended Prepayment Charge Schedule shall be furnished by the
Master Servicer to the NIMs Insurer.

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

              "Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day of the related Prepayment Period and the last day of the calendar
month preceding the month in which such Distribution Date occurs, an amount
equal

                                       26

<PAGE>

to interest at the applicable Net Mortgage Rate on the amount of such Principal
Prepayment for the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the calendar month preceding the month
in which such Distribution Date occurs. The obligations of the Master Servicer
in respect of any Prepayment Interest Shortfall are set forth in Section 3.24.

              "Prepayment Period": With respect to any Distribution Date, the
period commencing on the day after the Determination Date in the calendar month
preceding the calendar month in which such Distribution Date occurs (or, in the
case of the first Distribution Date, commencing on the Cut-Off Date) and ending
on the Determination Date of the calendar month in which such Distribution Date
occurs.

                  "Principal Distribution Amount": With respect to any
Distribution Date, the lesser of:

               (a)  the excess of the Available Distribution Amount over the
                    amount payable on the Class A Certificates and the Mezzanine
                    Certificates pursuant to Section 4.01(a)(2); and

               (b)  the sum of:

                  (i) the principal portion of each Monthly Payment on the
                  Mortgage Loans due during the related Due Period, whether or
                  not received on or prior to the related Determination Date;

                  (ii) the Stated Principal Balance of any Mortgage Loan that
                  was purchased during the related Prepayment Period pursuant to
                  or as contemplated by Section 2.03, Section 3.16(c) or Section
                  9.01 and the amount of any shortfall deposited in the
                  Collection Account in connection with the substitution of a
                  Deleted Mortgage Loan pursuant to Section 2.03 during the
                  related Prepayment Period;

                  (iii) the principal portion of all other unscheduled
                  collections (including, without limitation, Principal
                  Prepayments, Insurance Proceeds, Liquidation Proceeds and REO
                  Principal Amortization) received during the related Prepayment
                  Period, net of any portion thereof that represents a recovery
                  of principal for which an advance was made by the Master
                  Servicer pursuant to Section 4.03 in respect of a preceding
                  Distribution Date, and with respect to the Distribution Date
                  immediately following the end of the Funding Period, any
                  amounts in the Pre-Funding Account after giving effect to the
                  purchase of any Subsequent Mortgage Loans;

                  (iv) the principal portion of any Realized Losses incurred on
                  the Mortgage Loans in the calendar month preceding such
                  Distribution Date; and

                  (v) the amount of any Overcollateralization Increase Amount
                  for such Distribution Date;

                  minus:

                                       27

<PAGE>

                  (vi) the amount of any Overcollateralization Reduction
                  Amount for such Distribution Date.

              "Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.

              "PTCE":  A Prohibited Transaction Class Exemption issued by the
United States Department of Labor.

              "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Master Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing Advances and P&I Advances and any unpaid
Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.11(ix) and 3.16(b), and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer, the NIMs
Insurer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation.

              "Qualified Substitute Mortgage Loan": A mortgage loan substituted
for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must,
on the date of such substitution, (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Scheduled Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Rate not less than
(and not more than one percentage point in excess of) the Mortgage Rate of the
Deleted Mortgage Loan, (iii) with respect to any Adjustable- Rate Mortgage Loan,
have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the
Deleted Mortgage Loan, (iv) with respect to any Adjustable-Rate Mortgage Loan,
have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the
Deleted Mortgage Loan,

                                       28

<PAGE>

(v) with respect to any Adjustable-Rate Mortgage Loan, have a Gross Margin equal
to the Gross Margin of the Deleted Mortgage Loan, (vi) with respect to any
Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two
months later than the next Adjustment Date on the Deleted Mortgage Loan, (vii)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Deleted Mortgage Loan, (viii) have the same Due Date as
the Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of
the date of substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date, (x) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan, (xi) be covered by the PMI Policy if the Deleted Mortgage Loan was covered
by the PI Policy, (xii) have been underwritten or reunderwritten by the
Originator in accordance with the same underwriting criteria and guidelines as
the Deleted Mortgage Loan, (xiii) have a Prepayment Charge provision at least
equal to the Prepayment Charge provision of the Deleted Mortgage Loan and (xiv)
conform to each representation and warranty set forth in Section 6 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the risk gradings described in clause (x) hereof shall be satisfied as to
each such mortgage loan, the terms described in clause (vii) hereof shall be
determined on the basis of weighted average remaining terms to maturity, the
Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xi) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.

              "Rating Agency or Rating Agencies": Moody's and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Master Servicer.

              "Realized Loss": With respect to each Mortgage Loan as to which a
Final Recovery Determination has been made, an amount (not less than zero) equal
to (i) the unpaid principal balance of such Mortgage Loan as of the commencement
of the calendar month in which the Final Recovery Determination was made, plus
(ii) accrued interest from the Due Date as to which interest was last paid by
the Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the calendar
month in which such Final Recovery Determination was made, net of amounts that
are payable therefrom to the Master Servicer with respect to such Mortgage Loan
pursuant to Section 3.11(a)(iii).

              With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage

                                       29

<PAGE>

Loan as of the date of acquisition of such REO Property on behalf of REMIC I,
plus (ii) accrued interest from the Due Date as to which interest was last paid
by the Mortgagor in respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, calculated in the case of each calendar month during such
period (A) at an annual rate equal to the annual rate at which interest was then
accruing on the related Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of the related Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) REO
Imputed Interest for such REO Property for each calendar month commencing with
the calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(v) the aggregate of all P&I Advances made by the Master Servicer in respect of
such REO Property or the related Mortgage Loan for which the Master Servicer has
been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.23.

              With respect to each Mortgage Loan which has become the subject of
a Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.

              With respect to each Mortgage Loan which has become the subject of
a Debt Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.

              "Record Date": With respect to each Distribution Date and any
Book-Entry Certificate, the Business Day immediately preceding such Distribution
Date. With respect to each Distribution Date and any other Class of
Certificates, including any Definitive Certificates, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs.

              "Reference Banks": Deutsche Bank, Barclay's Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Trustee
(after consultation with the NIMS Insurer) which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Depositor or any Affiliate thereof and (iii)
which have been designated as such by the Trustee.

              "Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which
were not used to purchase the related Mortgaged Property.

                                       30

<PAGE>

              "Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class P Certificate or Class CE Certificate.

              "Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.

              "Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.

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

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

              "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies, including the
PMI Policy, required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby) to the extent
conveyed pursuant to Section 2.01 and (v) the Collection Account (other than any
amounts representing any Master Servicer Prepayment Charge Payment Amounts), the
Distribution Account (other than any amounts representing any Master Servicer
Prepayment Charge Payment Amounts) and any REO Account and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto. Notwithstanding
the foregoing, however, REMIC I specifically excludes any Master Servicer
Prepayment Charge Payment Amounts, the Pre- Funding Account, the Interest
Coverage Account, the Reserve Fund, all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date
and all Prepayment Charges payable in connection with Principal Prepayments made
before the Cut-off Date.

              "REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Interest Accrual Periods for the indicated
Regular Interests for such Distribution Date) equal to (a) the product of (i)
the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then outstanding and any amounts remaining on deposit in the Pre-Funding Account
and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest I-LT1 minus
the Marker Rate, divided by (b) 12.

              "REMIC I Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Balances of the REMIC I
Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LT2, REMIC I Regular Interest I-LT3 and REMIC I
Regular Interest I-LT4, in each case as of such date of determination.

                                       31

<PAGE>

              "REMIC I Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Balances of REMIC I Regular Interest I-LT2, REMIC I Regular
Interest I-LT3, REMIC I Regular Interest I-LT4 and any amounts remaining on
deposit in the Pre- Funding Account (other than amounts attributable to
investment income earned thereon) and the denominator of which is the aggregate
of the Uncertificated Balances of REMIC I Regular Interest I-LT2, REMIC I
Regular Interest I-LT3, REMIC I Regular Interest I-LT4 and REMIC I Regular
Interest I-LT5.

              "REMIC I Regular Interest": Any of the six separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LT4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                                       32

<PAGE>

              "REMIC I Regular Interest I-LT5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

              "REMIC I Regular Interest I-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time and shall be entitled to any Prepayment Charges collected by the Master
Servicer and to a distribution of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.

              "REMIC I Remittance Rate": With respect to each REMIC I Regular
Interest, (i) for the July 2001 Distribution Date, 6.9491% and (ii) for each
Distribution Date thereafter, the Net WAC Pass-Through Rate.

              "REMIC I Required Overcollateralization Amount": 1% of the
Required Overcollateralization Amount.

              "REMIC II": The segregated pool of assets consisting of all of the
REMIC I Regular Interests conveyed in trust to the Trustee for the benefit of
the REMIC II Certificateholders pursuant to Section 2.09, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

              "REMIC II Certificate": Any Regular Certificate or Class R
Certificate.

              "REMIC II Certificateholder": The Holder of any REMIC II
Certificate.

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

              "Remittance Report": A report in form and substance that is
acceptable to the Trustee and the NIMs Insurer on a magnetic disk or tape
prepared by the Master Servicer pursuant to Section 4.03 with such additions,
deletions and modifications as agreed to by the Trustee and the Master Servicer.

              "Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."

                                       33

<PAGE>

              "REO Account": Each of the accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23 which account
may be the Collection Account subject to Section 3.23..

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

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

              "REO Principal Amortization": With respect to any REO Property,
for any calendar month, the excess, if any, of (a) the aggregate of all amounts
received in respect of such REO Property during such calendar month, whether in
the form of rental income, sale proceeds (including, without limitation, that
portion of the Termination Price paid in connection with a purchase of all of
the Mortgage Loans and REO Properties pursuant to Section 9.01 that is allocable
to such REO Property) or otherwise, net of any portion of such amounts (i)
payable pursuant to Section 3.23(c) in respect of the proper operation,
management and maintenance of such REO Property or (ii) payable or reimbursable
to the Master Servicer pursuant to Section 3.23(d) for unpaid Servicing Fees in
respect of the related Mortgage Loan and unreimbursed Servicing Advances and P&I
Advances in respect of such REO Property or the related Mortgage Loan, over (b)
the REO Imputed Interest in respect of such REO Property for such calendar
month.

              "REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.

              "Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E-1 or Exhibit E-2 attached hereto.

              "Required Overcollateralized Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $2,249,900.00, (ii) on or
after the Stepdown Date provided a Trigger Event is not in effect, the greater
of (x) 1.50% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (y) $1,500,000.00, and (iii) on or after the
Stepdown Date and a Trigger Event is in effect, the Required Overcollateralized
Amount for the immediately preceding Distribution Date.

              "Reserve Fund": The Reserve Fund established and maintained
pursuant to Section 3.28.

              "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which New York

                                       34

<PAGE>

City banks selected by the Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month U.S. dollar lending rate which New
York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.

              "Residential Dwelling": Any one of the following: (i) an attached
or detached one- family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a condominium project or (iv) a detached or
attached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (unless such mobile or manufactured
home is defined as real property under applicable state law).

              "Residual Certificate":  Any one of the Class R Certificates.

              "Residual Interest": The sole class of "residual interests" in a
REMIC within the meaning of Section 860G(a)(2) of the Code.

              "Responsible Officer": When used with respect to the Trustee, any
director, any vice president, any assistant vice president, any associate, any
assistant secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and, with respect to a particular matter, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.

              "Scheduled Principal Balance": With respect to any Mortgage Loan:
(a) as of the Cut- off Date (or the related Subsequent Cut-off Date, with
respect to a Subsequent Mortgage Loan), the outstanding principal balance of
such Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if

                                       35

<PAGE>

any, in respect of such REO Property for all previously ended calendar months;
and (b) as of any Due Date subsequent to the occurrence of a Liquidation Event
with respect to such REO Property, zero.

              "Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount with respect to the Class A Certificates.

              "Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.

              "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.14, Section 3.16 and Section 3.23. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

              "Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the applicable Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

              "Servicing Fee Rate":  0.50% per annum.

              "Servicing Officer": Any employee of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans,
whose name and specimen signature appear on a list of Servicing Officers
furnished by the Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.

              "Single Certificate": With respect to any Class of Certificates
(other than the Class P Certificates and the Residual Certificates), a
hypothetical Certificate of such Class evidencing a Percentage Interest for such
Class corresponding to an initial Certificate Principal Balance or Notional
Amount of $1,000. With respect to the Class P Certificates and the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 20%
Percentage Interest in such Class.

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

                                       36

<PAGE>

              "Startup Day": With respect to each of REMIC I or REMIC II, the
day designated as such pursuant to Section 10.01(b) hereof.

              "Stated Principal Balance": With respect to any Mortgage Loan: (a)
as of any date of determination up to but not including the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, the Scheduled Principal Balance of such Mortgage Loan
as of the Cut-off Date (or the related Subsequent Cut-off Date, with respect to
a Subsequent Mortgage Loan), as shown in the Mortgage Loan Schedule, minus the
sum of (i) the principal portion of each Monthly Payment due on a Due Date
subsequent to the Cut-off Date, to the extent received from the Mortgagor or
advanced by the Master Servicer and distributed pursuant to Section 4.01 on or
before such date of determination, (ii) all Principal Prepayments received after
the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.16, to the extent distributed pursuant to
Section 4.01 on or before such date of determination and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation made during
or prior to the Prepayment Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 on or before such date of determination; and (b) as of any date of
determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such REO Property
would be distributed, zero.

              "Stayed Funds": If the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of a Remittance (as
defined in Section 7.02(b)) is prohibited by Section 362 of the federal
Bankruptcy Code, funds that are in the custody of the Master Servicer, a trustee
in bankruptcy or a federal bankruptcy court and should have been the subject of
such Remittance absent such prohibition.

              "Stepdown Date": The later to occur of (i) the Distribution Date
occurring in July 2004 and (ii) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Mortgage Loans but prior to any
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date) is equal to or
greater than 12.50%.

                                       37

<PAGE>

              "Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the first day of the month in which the related Subsequent Transfer
Date occurs.

              "Subsequent Mortgage Loan": A Mortgage Loan sold by the Depositor
to the Trust Fund pursuant to Section 2.11, such Mortgage Loan being identified
on the Mortgage Loan Schedule attached to a Subsequent Transfer Instrument.

              "Subsequent Mortgage Loan Purchase Agreement": The agreement
between the Depositor and the Seller regarding the transfer of the Subsequent
Mortgage Loans by the Seller to the Depositor.

              "Subsequent Transfer Date": With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
sold to the Trust Fund.

              "Subsequent Transfer Instrument": Each subsequent transfer
instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form of Exhibit I, by which Subsequent
Mortgage Loans are sold to the Trust Fund.

              "Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.

              "Sub-Servicing Account": An account established by a Sub-Servicer
which meets the requirements set forth in Section 3.08 and is otherwise
acceptable to the Master Servicer.

              "Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.

              "Substitution Shortfall Amount":  As defined in Section 2.03(d).

              "Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.

              "Telerate Page 3750": The display designated as page "3750" on the
Dow Jones Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).

              "Termination Price":  As defined in Section 9.01.

                                       38

<PAGE>

              "Terminator":  As defined in Section 9.01.

              "Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.

              "Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.

              "Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.

              "Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if the Delinquency Percentage exceeds 15.00%.

              "Trust Fund": Collectively, all of the assets of REMIC I and REMIC
II.

              "Trustee": Bankers Trust Company of California, N.A., a national
banking association, or its successor in interest, or any successor trustee
appointed as herein provided.

              "Trustee's Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee's Fee Rate,
multiplied by (ii) the aggregate Scheduled Principal Balance of the Mortgage
Loans and any REO Properties and any amount in the Pre-Funding Account as of the
second preceding Due Date (or, in the case of the initial Distribution Date, as
of the Cut-off Date).

              "Trustee's Fee Rate":  0.01% per annum.

              "Uncertificated Balance": The amount of any REMIC I Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be reduced by all distributions of principal
made on such REMIC I Regular Interest on such Distribution Date pursuant to
Section 4.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 4.04. The Uncertificated Balance of REMIC I Regular Interest I-LT5 shall
be increased by interest deferrals as provided in Section 4.01(a)(1)(A)(i). The
Uncertificated Balance of each REMIC I Regular Interest shall never be less than
zero.

              "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of any REMIC
I Regular Interest shall accrue on the basis of a 360-day year and the actual
number of days in the month. Uncertificated Interest with respect to each
Distribution Date, as to any REMIC I Regular

                                       39

<PAGE>

Interest shall be reduced by an amount equal to the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the extent
not covered by payments pursuant to Section 3.24 and (b) the aggregate amount of
any Relief Act Interest Shortfall, if any allocated, in each case, to such REMIC
I Regular Interest pursuant to Section 1.02. In addition, Uncertificated
Interest with respect to each Distribution Date, as to any REMIC I Regular
Interest shall be reduced by Realized Losses, if any, allocated to such REMIC I
Regular Interest pursuant to Section 1.02 and Section 4.04.

              "Underwriters' Exemption": An individual exemption issued by the
United States Department of Labor, Prohibited Transaction Exemption 91-23 (56
Fed. Reg. 15936, April 19, 1991), as amended, to Salomon Smith Barney Inc.
(formerly known as Smith Barney Inc.), for specific offerings in which Salomon
Smith Barney Inc. or any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with Salomon
Smith Barney Inc. is an underwriter, placement agent or a manager or co-manager
of the underwriting syndicate or selling group where the trust and the offered
certificates meet specified conditions. The Underwriters' Exemption, as amended,
provides a partial exemption for transactions involving certificates
representing a beneficial interest in a trust and entitling the holder to
pass-through payments of principal, interest and/or other payments with respect
to the trust's assets.

              "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.

              "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations) or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust. To the extent prescribed in regulations by
the Secretary of the Treasury, which have not yet been issued, a trust which was
in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence. The term "United States" shall have the meaning set forth in Section
7701 of the Code.

              "Value": With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, and (ii) the purchase price paid for the related
Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan,
provided, however, in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property is based solely upon the value determined by an appraisal
made for the originator of such Refinanced Mortgage Loan at the time of
origination of such Refinanced Mortgage Loan by an appraiser who met the minimum
requirements of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989.

                                       40

<PAGE>

              "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights will be allocated among the holders of
the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated to the holders of the Class P Certificates and 1% of all Voting Rights
will be allocated among the holders of each Class of Residual Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date.

              SECTION 1.02.         Allocation of Certain Interest Shortfalls.

              For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24) and any Relief Act Interest Shortfall incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class CE Certificates on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount of each such Certificate and thereafter,
among the Class A Certificates and the Mezzanine Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance of each such Certificate and (2) the aggregate amount of any Realized
Losses incurred for any Distribution Date and Net WAC Rate Carryover Amounts
incurred for any Distribution Date shall be allocated among the Class CE
Certificates on a PRO RATA basis based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the respective
Notional Amount of each such Certificate.

              For purposes of calculating the amount of Uncertificated Interest
for the REMIC I Regular Interests for any Distribution Date, the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24) and Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Interest payable
to REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LT5 up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC I Regular Interest I- LT1, REMIC I
Regular Interest I-LT2, REMIC I Regular Interest I-LT3, REMIC I Regular Interest
I-LT4 and REMIC I Regular Interest I-LT5 PRO RATA based on, and to the extent
of, one month's interest at the then applicable respective Pass-Through Rate on
the respective Uncertificated Balance of each such REMIC I Regular Interest.

              SECTION 1.03          Rights of the NIMs Insurer.

              Each of the rights of the NIMs Insurer set forth in this Agreement
shall exist so long as the notes issued pursuant to the Indenture remain
outstanding or the NIMs Insurer is owed amounts in respect of its guarantee of
payment on such notes.

                                       41

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

              SECTION 2.01.         Conveyance of Mortgage Loans.

              The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement (except Section 17 thereof), and all other
assets included or to be included in REMIC I. Such assignment includes all
interest and principal received by the Depositor or the Master Servicer on or
with respect to the Mortgage Loans (other than payments of principal and
interest due on such Mortgage Loans on or before the Cut-off Date). The
Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan
Purchase Agreement, the Original Pre-Funded Amount, the required deposit to the
Interest Coverage Account and the PMI Policy.

              In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee, or to one or more
Custodians as the agent or agents of the Trustee, the following documents or
instruments with respect to each Initial Mortgage Loan so transferred and
assigned and the Depositor shall, in accordance with Section 2.11, deliver or
cause to be delivered to the Trustee with respect to each Subsequent Mortgage
Loan, the following documents or instruments (a "Mortgage File"):

                (i) the original Mortgage Note, endorsed in blank or in the
              following form: "Pay to the order of Bankers Trust Company of
              California, N.A., as Trustee under the applicable agreement,
              without recourse," with all prior and intervening endorsements
              showing a complete chain of endorsement from the originator to the
              Person so endorsing to the Trustee;

               (ii) the original Mortgage with evidence of recording thereon,
              and a copy, certified by the appropriate recording office, of the
              recorded power of attorney, if the Mortgage was executed pursuant
              to a power of attorney, with evidence of recording thereon;

              (iii)   an original Assignment of the Mortgage in blank;

               (iv) the original recorded Assignment or Assignments of the
              Mortgage showing a complete chain of assignment from the
              originator to the Person assigning the Mortgage to the Trustee as
              contemplated by the immediately preceding clause (iii);

               (v) the original or copies of each assumption, modification,
              written assurance or substitution agreement, if any; and

                                       42

<PAGE>

               (vi) the original lenders's title insurance policy or an
              attorney's opinion of title or similar guarantee of title
              acceptable to mortgage lenders generally in the jurisdiction where
              the Mortgaged Property is located, together with all endorsements
              or riders which were issued with or subsequent to the issuance of
              such policy, insuring the priority of the Mortgage as a first lien
              on the Mortgaged Property represented therein as a fee interest
              vested in the Mortgagor, or in the event such original title
              policy is unavailable, a written commitment or uniform binder or
              preliminary report of title issued by the title insurance or
              escrow company.

              The Trustee agrees to execute and deliver (or cause the Custodian
to execute and deliver) to the Depositor and the NIMs Insurer on or prior to the
Closing Date an acknowledgment of receipt of the Mortgage Note (with any
exceptions noted), substantially in the form attached as Exhibit C-1 hereto.

              The Master Servicer (in its capacity as Originator) shall promptly
(and in no event later than thirty (30) Business Days, subject to extension upon
a mutual agreement between the Master Servicer and the Trustee, following the
later of (i) the Closing Date (or the related Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans), (ii) the date on which the Originator
receives the Assignment from the Custodian and (iii) the date of receipt by the
Master Servicer of the recording information for a Mortgage) submit or cause to
be submitted for recording, at no expense to the Trust Fund or the Trustee, in
the appropriate public office for real property records, each Assignment
referred to in Sections 2.01(iii) and (iv) above and shall execute each original
Assignment referred to in section 2.01(iii) above in the following form:
"Bankers Trust Company of California, N.A., as Trustee under the applicable
agreement". In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Master Servicer (in its capacity as Originator)
shall promptly prepare or cause to be prepared a substitute Assignment or cure
or cause to be cured such defect, as the case may be, and thereafter cause each
such Assignment to be duly recorded. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan only if the NIMs
Insurer, Trustee and each Rating Agency has received an opinion of counsel,
satisfactory in form and substance to the Trustee and each Rating Agency, to the
effect that the recordation of such assignments in any specific jurisdiction is
not necessary to protect the Trustee's interest in the related Mortgage Note;
provided further, however, notwithstanding the delivery of any opinion of
counsel, each assignment of Mortgage shall be submitted for recording by the
Originator in the manner described above, at no expense to the Trust Fund or
Trustee, upon the earliest to occur of: (i) reasonable direction by Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii) failure of the
Master Servicer Termination Test, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Originator, (iv) the occurrence of a
servicing transfer as described in Section 7.02 hereof and (v) if the Originator
is not the Master Servicer and with respect to any one assignment of Mortgage,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the
Master Servicer is unable to pay the cost of recording the Assignments of
Mortgage, such expense will be paid by the Trustee.

                                       43

<PAGE>

              If any of the documents referred to in Sections 2.01(ii), (iii) or
(iv) above has as of the Closing Date (or the related Subsequent Transfer Date,
with respect to the Subsequent Mortgage Loans) been submitted for recording but
either (x) has not been returned from the applicable public recording office or
(y) has been lost or such public recording office has retained the original of
such document, the obligations of the Depositor to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, of a copy of each such document
certified by the Originator in the case of (x) above or the applicable public
recording office in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is certified by
the Originator, delivery to the Trustee, or to the appropriate Custodian on
behalf of the Trustee, promptly upon receipt thereof of either the original or a
copy of such document certified by the applicable public recording office to be
a true and complete copy of the original. If the original lender's title
insurance policy was not delivered pursuant to Section 2.01(vi) above, the
Depositor shall deliver or cause to be delivered to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, promptly after receipt thereof,
the original lender's title insurance policy. The Depositor shall deliver or
cause to be delivered to the Trustee, or to the appropriate Custodian on behalf
of the Trustee, promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.

                  All original documents relating to the Mortgage Loans that are
not delivered to the Trustee, or to the appropriate Custodian on behalf of the
Trustee, are and shall be held by or on behalf of the Originator, the Depositor
or the Master Servicer, as the case may be, in trust for the benefit of the
Trustee on behalf of the Certificateholders. In the event that any such original
document is required pursuant to the terms of this Section to be a part of a
Mortgage File, such document shall be delivered promptly to the Trustee, or to
the appropriate Custodian on behalf of the Trustee. Any such original document
delivered to or held by the Depositor that is not required pursuant to the terms
of this Section to be a part of a Mortgage File, shall be delivered promptly to
the Master Servicer.

                  SECTION 2.02.      Acceptance of REMIC I by the Trustee.

                  Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to
a Custodial Agreement, receipt by the respective Custodian as the duly appointed
agent of the Trustee) of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(v)) above and all other assets included
in the definition of "REMIC I" under clauses (i), (iii), (iv) and (v) (to the
extent of amounts deposited into the Distribution Account) and declares that it,
or such Custodian as its agent, holds and will hold such documents and the other
documents delivered to it constituting the Mortgage File, and that it holds or
will hold all such assets and such other assets included in the definition of
"REMIC I" in trust for the exclusive use and benefit of all present and future
Certificateholders.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review (or cause a Custodian on its behalf to review) each Mortgage Note on
or before the Closing Date (or the related Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans) and to certify in

                                       44

<PAGE>

substantially the form attached hereto as Exhibit C-1 (or cause the Custodian to
certify in the form of the Initial Certification attached to the Custodial
Agreement) that, as to each Initial Mortgage Loan or Subsequent Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in the exception report annexed
thereto as not being covered by such certification), the Trustee is in
possession of the Mortgage Note. Within 30 days following the Closing Date, the
Trustee agrees, for the benefit of the Certificateholders, to review (or cause a
Custodian on its behalf to review) each Mortgage File on or before the Closing
Date and to certify in substantially the form attached hereto as Exhibit C-2 (or
cause the Custodian to certify in the form of the Interim Certification attached
to the Custodial Agreement) that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.01(v))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii) such documents have been reviewed by it or such Custodian and are not
mutilated, torn or defaced unless initialed by the related borrower and relate
to such Mortgage Loan, (iii) based on its or the Custodian's examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (i) through (iii), (vi), (ix), (x), (xiii),
(xv) and (xvii) through (xx) of the definition of "Mortgage Loan Schedule"
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trustee or such Custodian was
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face or (ii) to determine whether any Mortgage File should
include any of the documents specified in clause (v) of Section 2.01.

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the Master Servicer and the NIMs Insurer
a final certification in the form annexed hereto as Exhibit C-3 (or shall cause
the Custodian to deliver to the Trustee, the Depositor, the Master Servicer and
the NIMs Insurer a final certification in the form attached to the Custodial
Agreement) evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon, with respect to all of the Initial Mortgage
Loans and the Subsequent Mortgage Loans.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee or any Custodian finds any document or documents constituting a part of
a Mortgage File to be missing or defective in any material respect, at the
conclusion of its review the Trustee (or a Custodian on behalf of the Trustee)
shall so notify the Depositor, the NIMs Insurer and the Master Servicer. In
addition, upon the discovery by the Depositor, the NIMs Insurer, the Master
Servicer or the Trustee of a breach of any of the representations and warranties
made by the Originator in the Mortgage Loan Purchase Agreement in respect of any
Mortgage Loan which materially adversely affects such Mortgage Loan or the
interests of the related Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.

                                       45

<PAGE>

                  The Trustee (or a Custodian on behalf of the Trustee) shall,
at the written request and expense of any Certificateholder, provide a written
report to such Certificateholder, of all Mortgage Files released to the Master
Servicer for servicing purposes.

                  SECTION 2.03.      Repurchase or Substitution of Mortgage
                                     Loans by the Originator or the Depositor;
                                     Payment of Master Servicer Prepayment
                                     Charge Payment Amounts.

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, the Mortgage File or
of the breach by the Originator of any representation, warranty or covenant
under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly notify the
Originator, the NIMs Insurer and the Master Servicer of such defect, missing
document or breach and request that the Originator deliver such missing document
or cure such defect or breach within 90 days from the date the Originator was
notified of such missing document, defect or breach, and if the Originator does
not deliver such missing document or cure such defect or breach in all material
respects during such period, the Master Servicer (or, in accordance with Section
3.02(b), the Trustee) shall enforce the obligations of the Originator under the
Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from REMIC I
at the Purchase Price within 90 days after the date on which the Originator was
notified (subject to Section 2.03(d)) of such missing document, defect or
breach, if and to the extent that the Originator is obligated to do so under the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Trustee,
upon receipt of written certification from the Master Servicer of such deposit,
shall release to the Originator the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator shall furnish to it and as shall be necessary to
vest in the Originator any Mortgage Loan released pursuant hereto, and the
Trustee shall have no further responsibility with regard to such Mortgage File.
In lieu of repurchasing any such Mortgage Loan as provided above, if so provided
in the Mortgage Loan Purchase Agreement, the Originator may cause such Mortgage
Loan to be removed from REMIC I (in which case it shall become a Deleted
Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in
the manner and subject to the limitations set forth in Section 2.03(c). It is
understood and agreed that the obligation of the Originator to cure or to
repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such
a breach has occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the Trustee on behalf of
the Certificateholders.

                  (b) (i) Promptly upon the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.

                           (ii)     Notwithstanding the provisions of Section
                                    2.03(b)(i) above,

                                       46

<PAGE>

                  (A) on the later of (x) the Master Servicer Remittance Date
                  next following the earlier of discovery by the Master Servicer
                  or receipt of notice by the Master Servicer of the breach of
                  the representation made by the Master Servicer in Section
                  2.05(vii), which breach materially and adversely affects the
                  interests of the Holders of the Class P Certificates to any
                  Prepayment Charge and (y) the Master Servicer Remittance Date
                  next following the Prepayment Period relating to such a
                  breach, the Master Servicer shall deposit into the Collection
                  Account the amount of the scheduled Prepayment Charge, less
                  any amount collected and deposited by the Master Servicer into
                  the Collection Account in respect of such Prepayment Charge;
                  and

                  (B) on the later of (x) the Master Servicer Remittance Date
                  next following the earlier of discovery by the Master Servicer
                  or receipt of notice by the Master Servicer of the breach of
                  the covenant made by the Master Servicer in Section
                  2.05(viii), which breach materially and adversely affects the
                  interests of the Holders of the Class P Certificates to any
                  Prepayment Charge and (y) the Master Servicer Remittance Date
                  next following the Prepayment Period relating to such a
                  breach, the Master Servicer shall deposit into the Collection
                  Account, as a Master Servicer Prepayment Charge Payment
                  Amount, the amount of the waived Prepayment Charge, but only
                  to the extent required under Section 2.03(b)(iii) below.

                           (iii)    If with respect to any Prepayment Period

                                    (x) the dollar amount of Prepayment Charges
                                    that are the subject of breaches by the
                                    Master Servicer of the covenant made by the
                                    Master Servicer in Section 2.05(viii), which
                                    breaches materially and adversely affects
                                    the interests of the Holders of the Class P
                                    Certificates to such Prepayment Charges,
                                    exceeds

                                    (y) 5% of the total the dollar amount of
                                    Prepayment Charges (exclusive of (A)
                                    Prepayment Charges not enforced or collected
                                    upon because (i) the enforceability thereof
                                    shall have been limited by bankruptcy,
                                    insolvency, moratorium, receivership and
                                    other similar laws relating to creditors'
                                    rights generally or (ii) the collectability
                                    thereof shall have been limited due to
                                    acceleration in connection with a
                                    foreclosure or other involuntary payment and
                                    (B) Prepayment Charges waived by the Master
                                    Servicer where such waiver does not breach
                                    the covenant set forth in Section
                                    2.05(viii)) payable by Mortgagors in
                                    connection with Principal Prepayments on the
                                    related Mortgage Loans that occurred during
                                    such Prepayment Period,

then the amount required to be paid by the Master Servicer pursuant to Section
2.03(b)(ii)(B) above shall be limited to an amount, that when added to the
amount of Prepayment Charges actually collected by the Master Servicer in
respect of Prepayment Charges relating to Principal Prepayments on the related
Mortgage Loans that occurred during such Prepayment Period, will yield a sum
equal to 95% of the total the dollar amount of Prepayment Charges (exclusive of
(A) Prepayment Charges not enforced or collected upon because (i) the
enforceability thereof shall have been limited by

                                       47

<PAGE>

bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally or (ii) the collectability thereof shall have
been limited due to acceleration in connection with a foreclosure or other
involuntary payment and (B) Prepayment Charges waived by the Master Servicer
where such waiver does not breach the covenant set forth in Section 2.05(viii))
payable by Mortgagors in connection with Principal Prepayments on the related
Mortgage Loans that occurred during such Prepayment Period.

                  (c) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a), in the case of the
Originator, or Section 2.03(b), in the case of the Depositor, must be effected
prior to the date which is two years after the Startup Day for REMIC I.

                  As to any Deleted Mortgage Loan for which the Originator or
the Depositor substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Originator or the Depositor, as the case
may be, delivering to the Trustee (or a Custodian on behalf of the Trustee), for
such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in connection with
such substitution. The Trustee (or a Custodian on behalf of the Trustee) shall
acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter, review such documents as specified in
Section 2.02 and deliver to the Depositor, the NIMs Insurer and the Master
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit C-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor, the NIMs Insurer and
the Master Servicer a certification substantially in the form of Exhibit C-2
hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC I and will be retained by the Depositor or the Originator, as the case may
be. For the month of substitution, distributions to Certificateholders will
reflect the Monthly Payment due on such Deleted Mortgage Loan on or before the
Due Date in the month of substitution, and the Depositor or the Originator, as
the case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders and the NIMS Insurer
that such substitution has taken place, shall amend the Mortgage Loan Schedule
to reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee and the NIMS Insurer. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by the Originator, the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof.

                  For any month in which the Depositor or the Originator
substitutes one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Master Servicer

                                       48

<PAGE>

will determine the amount (the "Substitution Shortfall Amount"), if any, by
which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds
the aggregate of, as to each such Qualified Substitute Mortgage Loan, the
Scheduled Principal Balance thereof as of the date of substitution, together
with one month's interest on such Scheduled Principal Balance at the applicable
Net Mortgage Rate. On the date of such substitution, the Depositor or the
Originator, as the case may be, will deliver or cause to be delivered to the
Master Servicer for deposit in the Collection Account an amount equal to the
Substitution Shortfall Amount, if any, and the Trustee, upon receipt of the
related Qualified Substitute Mortgage Loan or Loans and certification by the
Master Servicer of such deposit, shall release to the Depositor or the
Originator, as the case may be, the related Mortgage File or Files and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Depositor or the Originator, as the case may be, shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.

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

                  (d) Upon discovery by the Depositor, the NIMs Insurer, the
Originator, the Master Servicer or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the
Originator or the Depositor shall repurchase or, subject to the limitations set
forth in Section 2.03(c), substitute one or more Qualified Substitute Mortgage
Loans for the affected Mortgage Loan within 90 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. Such
repurchase or substitution shall be made by the Originator. Any such repurchase
or substitution shall be made in the same manner as set forth in Section
2.03(a). The Trustee shall reconvey to the Depositor or the Originator, as the
case may be, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.

                  SECTION 2.04.             [Reserved].

                  SECTION 2.05.             Representations, Warranties and
                                            Covenants of the Master Servicer.

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

                         (i)        The Master Servicer is a corporation duly
                  organized, validly existing and in good standing under the
                  laws of the State of Delaware and is duly authorized

                                       49

<PAGE>

                  and qualified to transact any and all business contemplated by
                  this Agreement to be conducted by the Master Servicer in any
                  state in which a Mortgaged Property is located or is otherwise
                  not required under applicable law to effect such qualification
                  and, in any event, is in compliance with the doing business
                  laws of any such State, to the extent necessary to ensure its
                  ability to enforce each Mortgage Loan and to service the
                  Mortgage Loans in accordance with the terms of this Agreement;

                        (ii) The Master Servicer has the full corporate power
                  and authority to service each Mortgage Loan, and to execute,
                  deliver and perform, and to enter into and consummate the
                  transactions contemplated by this Agreement and has duly
                  authorized by all necessary corporate action on the part of
                  the Master Servicer the execution, delivery and performance of
                  this Agreement; and this Agreement, assuming the due
                  authorization, execution and delivery thereof by the Depositor
                  and the Trustee, constitutes a legal, valid and binding
                  obligation of the Master Servicer, enforceable against the
                  Master Servicer in accordance with its terms, except to the
                  extent 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 the equitable
                  defenses and to the discretion of the court before which any
                  proceeding therefor may be brought;

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

                        (iv) The Master Servicer is an approved seller/servicer
                  for Fannie Mae or Freddie Mac in good standing and is a HUD
                  approved mortgagee pursuant to Section 203 and Section 211 of
                  the National Housing Act;

                                       50

<PAGE>

                         (v) Except as disclosed in the Prospectus Supplement,
                  no litigation is pending against the Master Servicer that
                  would materially and adversely affect the execution, delivery
                  or enforceability of this Agreement or the ability of the
                  Master Servicer to service the Mortgage Loans or to perform
                  any of its other obligations hereunder in accordance with the
                  terms hereof;

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

                       (vii) The information set forth in the Prepayment Charge
                  Schedule attached hereto as Schedule 2 (including the
                  prepayment charge summary attached thereto) is complete, true
                  and correct in all material respects at the date or dates
                  respecting which such information is furnished and each
                  Prepayment Charge is permissible and enforceable in accordance
                  with its terms (except to the extent that (i) the
                  enforceability thereof may be limited by bankruptcy,
                  insolvency, moratorium, receivership and other similar laws
                  relating to creditors' rights generally and (ii) the
                  collectability thereof may be limited due to acceleration in
                  connection with a foreclosure or other involuntary payment);

                      (viii) The Master Servicer will not waive any Prepayment
                  Charge or part of a Prepayment Charge unless, in the Master
                  Servicer's reasonable judgment as described in Section 3.01
                  hereof, (x) such waiver relates to a default or a reasonably
                  foreseeable default, (y) such waiver would maximize recovery
                  of total proceeds taking into account the value of such
                  Prepayment Charge and related Mortgage Loan and (z) doing so
                  is standard and customary in servicing similar Mortgage Loans
                  (including any waiver of a Prepayment Charge in connection
                  with a refinancing of a Mortgage Loan that is related to a
                  default or a reasonably foreseeable default) and in no event
                  will it waive a Prepayment Charge in connection with a
                  refinancing of a Mortgage Loan that is not related to a
                  default or a reasonably foreseeable default;

                        (ix)        The information set forth in the "monthly
                  tape" provided to the Trustee or any of its affiliates is true
                  and correct in all material respects; and

                         (x) With respect to each Mortgage Loan, the Assignment
                  is in recordable form; (except that the name of the assignee
                  and the recording information with respect to such Mortgage
                  Loan is blank) and each Mortgage Loan was originated in the
                  name of the Master Servicer or an affiliate thereof.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee or to a Custodian, as the case may be, and
shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders. Upon discovery by any of the Depositor, the NIMs Insurer,
the Master Servicer

                                       51

<PAGE>

or the Trustee of a breach of any of the foregoing representations, warranties
and covenants which materially and adversely affects the value of any Mortgage
Loan, Prepayment Charge or the interests therein of the Certificateholders, the
party discovering such breach shall give prompt written notice (but in no event
later than two Business Days following such discovery) to the NIMs Insurer and
the Trustee. Subject to Section 7.01, the obligation of the Master Servicer set
forth in Section 2.03(b) to cure breaches (or in the case of the
representations, warranties and covenants set forth in Section 2.05(vii) and
Section 2.05(viii) above, to otherwise remedy such breaches pursuant to Section
2.03(b)) shall constitute the sole remedies against the Master Servicer
available to the Certificateholders, the Depositor or the Trustee on behalf of
the Certificateholders respecting a breach of the representations, warranties
and covenants contained in this Section 2.05. The preceding sentence shall not,
however, limit any remedies available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders (other than in the case of
the representations, warranties and covenants set forth in Section 2.05(vii) and
Section 2.05(viii) above) pursuant to the Mortgage Loan Purchase Agreement
signed by the Master Servicer in its capacity as Originator, respecting a breach
of the representations, warranties and covenants of the Master Servicer in its
capacity as Originator contained in such Mortgage Loan Purchase Agreement.

                  SECTION 2.06. Issuance of the REMIC I Regular Interests and
                                the Class R-I Interest.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Section 2.01 and Section 2.02, together with the assignment to it of all other
assets included in REMIC I, the receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Class R-I Interest in authorized denominations. The
interests evidenced by the Class R-I Interest, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in REMIC I. The
rights of the Class R Certificateholders and REMIC II (as holder of the REMIC I
Regular Interests) to receive distributions from the proceeds of REMIC I in
respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-I Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.

                  SECTION 2.07. Conveyance of the REMIC I Regular Interests;
                                Acceptance of REMIC II by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R
Certificateholders (as holder of the Class R-I Interest and Class R-II Interest)
and REMIC II (as holder of the REMIC I Regular Interest). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Class R Certificateholders (as holder of the Class R-I Interests and
Class R- II Interests) and REMIC II (as holder of the REMIC I Regular
Interests). The rights of the Class R Certificateholders (as holder of the Class
R-I Interests and Class R-II Interest) and REMIC II (as holder of the REMIC I
Regular Interest) to receive distributions from the proceeds of REMIC II in

                                       52

<PAGE>

respect of the Class R-II Interests and REMIC II Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-II Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.

                  SECTION 2.09.      Issuance of Class R Certificates.

                  The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the Class R Certificates in authorized denominations. The
interests evidenced by the Class R Certificates and the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in REMIC II.

                  SECTION 2.10.    Conveyance of the Subsequent Mortgage Loans.

                  (a) Subject to the conditions set forth in paragraph (b)
below, in consideration of the Trustee's delivery on the Subsequent Transfer
Dates to or upon the order of the Depositor of all or a portion of the balance
of funds in the Pre-Funding Account, the Depositor shall on any Subsequent
Transfer Date sell, transfer, assign, set over and convey without recourse to
the Trust Fund but subject to the other terms and provisions of this Agreement
all of the right, title and interest of the Depositor in and to (i) the
Subsequent Mortgage Loans identified on the Mortgage Loan Schedule attached to
the related Subsequent Transfer Instrument delivered by the Depositor on such
Subsequent Transfer Date, (ii) principal due and interest accruing on the
Subsequent Mortgage Loans after the related Subsequent Cut-off Date and (iii)
all items with respect to such Subsequent Mortgage Loans to be delivered
pursuant to Section 2.01 and the other items in the related Mortgage Files;
provided, however, that the Depositor reserves and retains all right, title and
interest in and to principal due and interest accruing on the Subsequent
Mortgage Loans prior to the related Subsequent Cut-off Date. The transfer to the
Trustee for deposit in the Mortgage Pool by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Agreement shall be absolute and is intended by the
Depositor, the Master Servicer, the Trustee and the Certificateholders to
constitute and to be treated as a sale of the Subsequent Mortgage Loans by the
Depositor to the Trust Fund. The related Mortgage File for each Subsequent
Mortgage Loan shall be delivered to the Trustee or the Custodian at least three
Business Days prior to the related Subsequent Transfer Date.

                  The purchase price paid by the Trustee from amounts released
from the Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor). This Agreement shall constitute a fixed-price purchase contract in
accordance with Section 860G(a)(3)(A)(ii) of the Code.

                  (b) The Depositor shall transfer to the Trustee for deposit in
the Trust the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Trustee shall
release funds from the Pre-Funding Account only upon

                                       53

<PAGE>

the satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:

                  (i)      the Depositor shall have provided the Trustee and the
         NIMs Insurer with a timely Addition Notice;

                  (ii) the Depositor shall have delivered to the Trustee and the
         NIMs Insurer a duly executed Subsequent Transfer Instrument, which
         shall include a Mortgage Loan Schedule listing the Subsequent Mortgage
         Loans, and the Master Servicer, in its capacity as Originator, shall
         have delivered a computer file containing such Mortgage Loan Schedule
         to the Trustee and each Rating Agency at least three Business Days
         prior to the related Subsequent Transfer Date;

                  (iii) as of each Subsequent Transfer Date, as evidenced by
         delivery of the Subsequent Transfer Instrument, substantially in the
         form of Exhibit I, the Depositor shall not be insolvent nor shall it
         have been rendered insolvent by such transfer nor shall it be aware of
         any pending insolvency;

                  (iv)     such sale and transfer shall not result in a material
         adverse tax consequence to the Trust Fund or the Certificateholders;

                  (v)      the Funding Period shall not have terminated;

                  (vi)     the Depositor shall not have selected the Subsequent
         Mortgage Loans in a manner that it believed to be adverse to the
         interests of the Certificateholders;

                  (vii) the Depositor shall have delivered to the Trustee and
         the NIMs Insurer a Subsequent Transfer Instrument confirming the
         satisfaction of the conditions precedent specified in this Section 2.11
         and, pursuant to the Subsequent Transfer Instrument, assigned to the
         Trustee without recourse for the benefit of the Certificateholders all
         the right, title and interest of the Depositor, in, to and under the
         Subsequent Mortgage Loan Purchase Agreement, to the extent of the
         Subsequent Mortgage Loans;

                  (viii) the Depositor shall have delivered to the Trustee and
         the NIMs Insurer a letter from an Independent accountant (with copies
         provided to each Rating Agency) stating that the characteristics of the
         Subsequent Mortgage Loans conform to the characteristics set forth in
         paragraphs (c) and (d) below;

                  (ix) the Depositor shall have delivered to the Trustee and the
         NIMs Insurer an Opinion of Counsel addressed to the Trustee and the
         Rating Agencies with respect to the transfer of the Subsequent Mortgage
         Loans substantially in the form of the Opinion of Counsel delivered to
         the Trustee on the Closing Date regarding the true sale of the
         Subsequent Mortgage Loans; and

                  (x) the Depositor shall have delivered to the Trustee the
         consent of the NIMS Insurer to the transfer of such Subsequent Mortgage
         Loans.

                                       54

<PAGE>

                  (c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in paragraph (d) below and the accuracy of the
following representations and warranties with respect to such Subsequent
Mortgage Loan determined as of the related Subsequent Cut-off Date: (i) the
Subsequent Mortgage Loan may not be 30 or more days delinquent as of the related
Subsequent Cut-off Date; (ii) the term to stated maturity of the Subsequent
Mortgage Loan will not be less than 180 months and will not exceed 360 months
from its first payment date; (iii) the Subsequent Mortgage Loan may not provide
for negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Loan-to-Value Ratio greater than 95%; (v) the Subsequent Mortgage Loans will
have, as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 15 months; (vi) no Subsequent Mortgage Loan shall
have a Mortgage Rate less than 6.88% or greater than 14.99%; (vii) the
Subsequent Mortgage Loan shall have been serviced by the Master Servicer since
origination or purchased by the Originator in accordance with its underwriting
guidelines; (viii) the Subsequent Mortgage Loan must have a first payment date
occurring on or before September 1, 2001 and (ix) the Subsequent Mortgage Loan
shall have been be underwritten in accordance with the criteria set forth under
the section "The Mortgage Pool--Underwriting Standards; Representations" in the
Prospectus Supplement.

                  (d) Following the purchase of the Subsequent Mortgage Loans by
the Trust Fund, the Mortgage Loans (including the Subsequent Mortgage Loans)
will, as of the related Subsequent Cut-off Date: (i) have a weighted average
original term to stated maturity of not more than 360 months from the first
payment date thereon; (ii) have a weighted average Mortgage Rate of not less
than 9.15% and not more than 9.40%, by aggregate principal balance of the
Mortgage Loans; (iii) have a weighted average Loan-to-Value Ratio of not less
than 70.00% and more than 90.00%; (iv) have no Mortgage Loan with a principal
balance in excess of $650,000 and (v) have a weighted average Gross Margin of
not less than 6.37%, in each case, as applicable, by aggregate principal balance
of the Mortgage Loans as of the related Subsequent Cut-off Date.

                  (e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by the NIMs Insurer or each Rating Agency if the inclusion
of any such Subsequent Mortgage Loan would adversely affect the ratings of any
class of Certificates. At least one Business Day prior to the related Subsequent
Transfer Date, the Depositor shall obtain confirmation from each Rating Agency
which Subsequent Mortgage Loans, if any, shall not be included in the transfer
on the related Subsequent Transfer Date and deliver such confirmation to the
Trustee and the Master Servicer; provided, however, that the Master Servicer, in
its capacity as Originator, shall have delivered to each Rating Agency at least
three Business Days prior to such Subsequent Transfer Date a computer file
reasonably acceptable to each Rating Agency describing the characteristics
specified in paragraphs (c) and (d) above.

                                       55

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

         The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:

                         (i)        any relationship that the Master Servicer,
                  any Sub-Servicer or any Affiliate of the Master Servicer or
                  any Sub-Servicer may have with the related Mortgagor;

                        (ii)        the ownership of any Certificate by the
                  Master Servicer or any Affiliate of the Master Servicer;

                       (iii)        the Master Servicer's obligation to make P&I
                  Advances or Servicing Advances; or

                        (iv) the Master Servicer's or any Sub-Servicer's right
                  to receive compensation for its services hereunder or with
                  respect to any particular transaction.

         To the extent consistent with the foregoing, the Master Servicer shall
also seek the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above- described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee, in accordance with the servicing
standards set forth above, to execute and deliver, on behalf of the
Certificateholders and the Trustee, and upon notice to the Trustee, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee and the Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under the
PMI Policy and any standard hazard insurance policy. Subject to Section 3.17,
the

                                       56

<PAGE>

Trustee shall execute, at the written request of the Master Servicer, and
furnish to the Master Servicer and any Sub-Servicer such documents as are
necessary or appropriate to enable the Master Servicer or any Sub-Servicer to
carry out their servicing and administrative duties hereunder, and by execution
of this Agreement, the Trustee hereby grants to the Master Servicer a power of
attorney to carry out such duties (including the taking of and transferring
title of REO Properties held in the name of the Trustee for the benefit of the
Trust). The Trustee shall not be liable for the actions of the Master Servicer
or any Sub-Servicers under such powers of attorney.

                  Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the Master Servicer shall advance or cause
to be advanced funds as necessary for the purpose of effecting the timely
payment of taxes and assessments on the Mortgaged Properties, which advances
shall be Servicing Advances reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Master Servicer or by
Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause any of REMIC I or REMIC II to fail to qualify as a REMIC under the
Code or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.

                  SECTION 3.02. Sub-Servicing Agreements Between the Master
                                Servicer and Sub-Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the ratings on any Class of Certificates and
the the NIMs Insurer shall have consented to such Sub- Servicing Agreement) with
Sub-Servicers, for the servicing and administration of the Mortgage Loans.

                  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

                                       57

<PAGE>

applicable law to enable the Sub-Servicer to perform its obligations hereunder
and under the Sub- Servicing Agreement, (ii) an institution approved as a
mortgage loan originator by the Federal Housing Administration or an institution
the deposit accounts in which are insured by the FDIC and (iii) a Freddie Mac or
Fannie Mae approved mortgage servicer. Each Sub-Servicing Agreement must impose
on the Sub-Servicer requirements conforming to the provisions set forth in
Section 3.08 and provide for servicing of the Mortgage Loans consistent with the
terms of this Agreement. The Master 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 Master 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 entered
into which could be reasonably expected to be materially adverse to the
interests of the Certificateholders, without the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any variation
without the consent of the Holders of Certificates entitled to at least 66% of
the Voting Rights from the provisions set forth in Section 3.08 relating to
insurance or priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub- Servicing Accounts or the timing and amount of remittances
by the Sub-Servicers to the Master Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Master Servicer
shall deliver to the Trustee and the NIMs Insurer copies of all Sub-Servicing
Agreements, and any amendments or modifications thereof, promptly upon the
Master Servicer's execution and delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Originator under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). 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 Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, 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.
Enforcement of the Mortgage Loan Purchase Agreement against the Originator shall
be effected by the Master Servicer to the extent it is not the Originator, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.

                                       58

<PAGE>

                  SECTION 3.03.             Successor Sub-Servicers.

                  The Master Servicer, with the consent of the NIMs Insurer,
shall be entitled to terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such Sub-
Servicer shall be assumed simultaneously by the Master Servicer without any act
or deed on the part of such Sub-Servicer or the Master Servicer, and the Master
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies
under Section 3.02.

                  Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Default).

                  SECTION 3.04.             Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub- Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.

                  SECTION 3.05.             No Contractual Relationship Between
                                            Sub-Servicers and the NIMs Insurer,
                                            Trustee or Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the NIMs Insurer, the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer except as
set forth in Section 3.06. The Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.

                  SECTION 3.06.             Assumption or Termination of
                                            Sub-Servicing Agreements by Trustee.

                                       59

<PAGE>

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including termination due to a Master Servicer
Event of Default), the Trustee or its designee shall thereupon assume (or cause
its designee or the successor servicer for the Trustee appointed pursuant to
Section 7.02 to assume) all of the rights and obligations of the Master Servicer
under each Sub- Servicing Agreement that the Master Servicer may have entered
into, unless the Trustee elects to terminate any Sub-Servicing Agreement in
accordance with its terms as provided in Section 3.03. Upon such assumption, the
Trustee, its designee or the successor servicer for the Trustee appointed
pursuant to Section 7.02 shall be deemed, subject to Section 3.03, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Sub-Servicing Agreement to the same extent as
if each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its
designee or any successor Master Servicer shall be deemed to have assumed any
liability or obligation of the Master Servicer that arose before it ceased to be
the Master Servicer.

                  The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.

                  SECTION 3.07. Collection of Certain Mortgage Loan Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest, or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; provied further that the NIMs
Insurer's prior written consent shall be required for any modification, waiver
or amendment if the amendment if the aggregate number of outstanding Mortgage
Loans which have been modified, waived or amended exceeds 5% of the number of
Mortgage Loans as of the Cut-off Date and any Subsequent Cut-off Date. In the
event of any such arrangement pursuant to clause (ii) above, the Master Servicer
shall make timely advances on such Mortgage Loan during such extension pursuant
to Section 4.03 and in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Master Servicer, such default is reasonably
foreseeable, the Master Servicer, consistent with the standards set forth in
Section 3.01, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any

                                       60

<PAGE>

such term or otherwise grant indulgence to any Mortgagor (any and all such
waivers, modifications, variances, forgiveness of principal or interest,
postponements, or indulgences collectively referred to herein as "forbearance"),
provided, however, that in determining which course of action permitted by this
sentence it shall pursue, the Master Servicer shall adhere to the Loss
Mitigation Action Plan. The Master Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 and the Loss Mitigation Action Plan shall be reflected in writing
in the Mortgage File.

                  SECTION 3.08. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer
less its servicing compensation to the extent permitted by the Sub-Servicing
Agreement, and shall thereafter deposit such amounts in the Sub-Servicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Sub- Servicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Master 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 Master Servicer shall be deemed to have received payments on the
Mortgage Loans when the Sub-Servicer receives such payments.

                  SECTION 3.09.             Collection of Taxes, Assessments and
                                            Similar Items; Servicing Accounts.

                  The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"). Servicing Accounts shall be Eligible
Accounts. The Master Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Master Servicer's receipt thereof, all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
hazard insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Servicing Accounts, in no event
more than two Business Days after the deposit of such funds in the clearing
account, for the purpose of effecting the payment of any such items as required
under the terms of this Agreement. Withdrawals of amounts from a Servicing
Account may be made only to (i) effect payment of taxes, assessments, hazard
insurance premiums, and comparable items; (ii) reimburse the Master Servicer (or
a Sub- Servicer to the extent provided in the related Sub-Servicing Agreement)
out of related collections for any advances made pursuant to Section 3.01 (with
respect to taxes and assessments) and Section 3.14 (with respect to hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in

                                       61

<PAGE>

the Servicing Account; (v) clear and terminate the Servicing Account at the
termination of the Master Servicer's obligations and responsibilities in respect
of the Mortgage Loans under this Agreement in accordance with Article IX or (vi)
recover amounts deposited in error. As part of its servicing duties, the Master
Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in
Servicing Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Servicing Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement therefor. To the
extent that a Mortgage does not provide for Escrow Payments, the Master Servicer
shall determine whether any such payments are made by the Mortgagor in a manner
and at a time that avoids the loss of the Mortgaged Property due to a tax sale
or the foreclosure of a tax lien. The Master Servicer assumes full
responsibility for the payment of all such bills and shall effect payments of
all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances
from its own funds to effect such payments.

                  SECTION 3.10.   Collection Account and Distribution Account.

                  (a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date with respect to the Initial Mortgage Loans, or
the related Subsequent Cut-off Date with respect to the Subsequent Mortgage
Loans (other than in respect of principal or interest on the related Mortgage
Loans due on or before the Cut-off Date or Subsequent Cut-off Date, as the case
may be) or payments (other than Principal Prepayments) received by it on or
prior to the Cut-off Date but allocable to a Due Period subsequent thereto:

                         (i)        all payments on account of principal,
                  including Principal Prepayments, on the Mortgage Loans;

                        (ii)        all payments on account of interest (net of
                  the related Servicing Fee) on each Mortgage Loan;

                       (iii) all Insurance Proceeds and Liquidation Proceeds
                  (other than proceeds collected in respect of any particular
                  REO Property and amounts paid by the Master Servicer in
                  connection with a purchase of Mortgage Loans and REO
                  Properties pursuant to Section 9.01);

                        (iv) any amounts required to be deposited pursuant to
                  Section 3.12 in connection with any losses realized on
                  Permitted Investments with respect to funds held in the
                  Collection Account;

                                       62

<PAGE>

                         (v) any amounts required to be deposited by the Master
                  Servicer pursuant to the second paragraph of Section 3.14(a)
                  in respect of any blanket policy deductibles;

                         (vi) all proceeds of any Mortgage Loan repurchased or
                  purchased in accordance with Section 2.03 or Section 9.01;

                         (vii) all amounts required to be deposited in
                  connection with shortfalls in principal amount of Qualified
                  Substitute Mortgage Loans pursuant to Section 2.03;

                      (viii) all Prepayment Charges collected by the Master
                  Servicer, all Prepayment Charges payable by the Master
                  Servicer pursuant to Section 2.03(b)(ii)(A) and all Master
                  Servicer Prepayment Charge Payment Amounts payable by the
                  Master Servicer pursuant to Section 2.03(b)(ii)(B), subject to
                  Section 2.03(b)(iii); and

                         (ix) without duplication, all payments of claims
                  received by the Master Servicer under the PMI Policy.

For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date
of substitution.

                  The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, NSF fees, reconveyance fees or assumption fees and other similar fees
and charges need not be deposited by the Master Servicer in the Collection
Account and shall, upon collection, belong to the Master Servicer as additional
compensation for its servicing activities. In the event the Master Servicer
shall deposit in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account,
any provision herein to the contrary notwithstanding.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 3:00 p.m.
New York time (i) on the Master Servicer Remittance Date, (A) that portion of
the Available Distribution Amount (calculated without regard to the references
in clause (2) of the definition thereof to amounts that may be withdrawn from
the Distribution Account) for the related Distribution Date then on deposit in
the Collection Account and (B) the sum of all Prepayment Charges collected by
the Master Servicer, all Prepayment Charges payable by the Master Servicer
pursuant to Section 2.03(b)(ii)(A) and all Master Servicer Prepayment Charge
Payment Amounts payable by the Master Servicer pursuant to Section
2.03(b)(ii)(B), subject to Section 2.03(b)(iii) (in each case to the extent not
related to Principal Prepayments occurring after the related Prepayment Period)
and (ii) on each Business Day as of the commencement of which the balance on
deposit in the Collection Account exceeds $75,000 following any withdrawals
pursuant to the next succeeding sentence, the amount of such excess, but only if
the Collection Account constitutes an Eligible

                                       63

<PAGE>

Account solely pursuant to clause (ii) of the definition of "Eligible Account."
If the balance on deposit in the Collection Account exceeds $75,000 as of the
commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Master Servicer shall, on or before 3:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Depositor, the Master Servicer, the
Trustee or any Sub-Servicer pursuant to Section 3.11 and shall pay such amounts
to the Persons entitled thereto.

                  (c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee, the NIMs Insurer and the Depositor of the location of the
Collection Account maintained by it when established and prior to any change
thereof. The Trustee shall give notice to the Master Servicer, the NIMs Insurer
and the Depositor of the location of the Distribution Account when established
and prior to any change thereof.

                  (d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer shall deliver to the Trustee from time to time for
deposit, and the Trustee shall so deposit, in the Distribution Account:

                         (i) any P&I Advances, as required pursuant to Section
                  4.03;

                         (ii) any amounts required to be deposited pursuant to
                  Section 3.23(d) or (f) in connection with any REO Property;

                         (iii) any amounts to be paid by the Master Servicer in
                  connection with a purchase of Mortgage Loans and REO
                  Properties pursuant to Section 9.01;

                         (iv) any amounts required to be deposited pursuant to
                  Section 3.24 in connection with any Prepayment Interest
                  Shortfalls;

                         (v) any Stayed Funds, as soon as permitted by the
                  federal bankruptcy court having jurisdiction in such matters;
                  and

                         (vi) any amounts required to be paid by the Master
                  Servicer pursuant to Section 3.12(b) in connection with any
                  losses realized on Permitted Investments with respect to funds
                  held in the Collection Account.

                                       64

<PAGE>

                  (e) Promptly upon receipt of any Stayed Funds, whether from
the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder. In addition, the Trustee shall deposit in the Distribution
Account any amounts required to be deposited pursuant to Section 3.12(c) in
connection with losses realized on Permitted Investments with respect to funds
held in the Distribution Account.

                  SECTION 3.11.    Withdrawals from the Collection Account and
                                   Distribution Account.

                  (a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.03:

                         (i) to remit to the Trustee for deposit in the
                  Distribution Account the amounts required to be so remitted
                  pursuant to Section 3.10(b) or permitted to be so remitted
                  pursuant to the first sentence of Section 3.10(d);

                        (ii) subject to Section 3.16(d), to reimburse the Master
                  Servicer for P&I Advances, but only to the extent of amounts
                  received which represent Late Collections (net of the related
                  Servicing Fees) of Monthly Payments on Mortgage Loans with
                  respect to which such P&I Advances were made in accordance
                  with the provisions of Section 4.03;

                       (iii) subject to Section 3.16(d), to pay the Master
                  Servicer or any Sub- Servicer (a) any unpaid Servicing Fees,
                  (b) any unreimbursed Servicing Advances with respect to each
                  Mortgage Loan, but only to the extent of any Liquidation
                  Proceeds, Insurance Proceeds or other amounts as may be
                  collected by the Master Servicer from a Mortgagor, or
                  otherwise received with respect to such Mortgage Loan and (c)
                  any Nonrecoverable Servicing Advances with respect to the
                  final liquidation of a Mortgage Loan, but only to the extent
                  that Late Collections, Liquidation Proceeds and Insurance
                  Proceeds received with respect to such Mortgage Loan are
                  insufficient to reimburse the Master Servicer or any
                  Sub-Servicer for Servicing Advances;

                        (iv) to pay to the Master Servicer as servicing
                  compensation (in addition to the Servicing Fee) on the Master
                  Servicer Remittance Date any interest or investment income
                  earned on funds deposited in the Collection Account or the
                  Interest Coverage Account (other than interest or investment
                  income earned on funds deposited in the Pre-Funding Account
                  and transferred to the Interest Coverage Account pursuant to
                  Section 4.07(c)(iv));

                         (v) to pay to the Master Servicer, the Depositor or the
                  Originator, as the case may be, with respect to each Mortgage
                  Loan that has previously been purchased or replaced pursuant
                  to Section 2.03 or Section 3.16(c) all amounts received
                  thereon subsequent to the date of purchase or substitution, as
                  the case may be;

                                       65

<PAGE>

                        (vi) to reimburse the Master Servicer for any P&I
                  Advance previously made which the Master Servicer has
                  determined to be a Nonrecoverable P&I Advance in accordance
                  with the provisions of Section 4.03;

                         (vii) to reimburse the Master Servicer or the Depositor
                  for expenses incurred by or reimbursable to the Master
                  Servicer or the Depositor, as the case may be, pursuant to
                  Section 6.03;

                      (viii) to reimburse the NIMs Insurer, the Master Servicer
                  or the Trustee, as the case may be, for enforcement expenses
                  reasonably incurred in respect of the breach or defect giving
                  rise to the purchase obligation under Section 2.03 of this
                  Agreement that were included in the Purchase Price of the
                  Mortgage Loan, including any expenses arising out of the
                  enforcement of the purchase obligation;

                         (ix) to pay, or to reimburse the Master Servicer for
                  advances in respect of, expenses incurred in connection with
                  any Mortgage Loan pursuant to Section 3.16(b);

                         (x) to pay itself any Prepayment Interest Excess; and

                         (xi) to clear and terminate the Collection Account
                  pursuant to Section 9.01.

                  The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee and the NIMs Insurer on or prior to the next succeeding Master Servicer
Reporting Date, upon making any withdrawals from the Collection Account pursuant
to subclause (vii) above.

                  (b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:

                         (i) to make distributions to Certificateholders in
                  accordance with Section 4.01;

                         (ii) to pay to itself the Trustee's Fee and expenses
                  pursuant to Section 8.05;

                         (iii) to pay itself any interest income earned on funds
                  deposited in the Distribution Account pursuant to Section
                  3.12(c);

                         (iv) to reimburse itself pursuant to Section 7.01 and
                  Section 7.02;

                         (v) to pay any amounts in respect of taxes pursuant to
                  Section 10.01(g)(iii);

                                       66

<PAGE>

                         (vi) to clear and terminate the Distribution Account
                  pursuant to Section 9.01; and

                         (vii) to pay the PMI Insurer the PMI Insurer Fee based
                  on information received from the Master Servicer.

                  SECTION 3.12. Investment of Funds in the Pre-Funding Account,
                                the Interest Coverage Account, the Collection
                                Account and the Distribution Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Pre- Funding Account, the Interest Coverage Account or the
Collection Account (for purposes of this Section 3.12, an "Investment Account"),
and the Trustee, in its individual capacity, may direct any depository
institution maintaining the Distribution Account (for purposes of this Section
3.12, also an "Investment Account"), to invest the funds in such Investment
Account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee is the obligor thereon and (ii) no later than the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if the Trustee is the obligor thereon. All such Permitted Investments shall be
held to maturity, unless payable on demand. Any investment of funds in an
Investment Account shall be made in the name of the Trustee (in its capacity as
such) or in the name of a nominee of the Trustee. The Trustee shall be entitled
to sole possession (except with respect to investment direction of funds held in
the Pre-Funding Account, the Interest Coverage Account and the Collection
Account and any income and gain realized thereon) over each such investment, and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall:

                  (x)      consistent with any notice required to be given
                           thereunder, demand that payment thereon be made on
                           the last day such Permitted Investment may otherwise
                           mature hereunder in an amount equal to the lesser of
                           (1) all amounts then payable thereunder and (2) the
                           amount required to be withdrawn on such date; and

                  (y)      demand payment of all amounts due thereunder promptly
                           upon determination by a Responsible Officer of the
                           Trustee that such Permitted Investment would not
                           constitute a Permitted Investment in respect of funds
                           thereafter on deposit in the Investment Account.

                  (b) All income and gain realized from the investment of funds
deposited in the the Interest Coverage Account, the Pre-Funding Account and the
Collection Account held by or on behalf of the Master Servicer, shall be for the
benefit of the Master Servicer and shall be subject to its withdrawal in
accordance with Section 3.11. The Master Servicer shall deposit in the Pre-
Funding Account, the Interest Coverage Account and the Collection Account the
amount of any loss

                                       67

<PAGE>

of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.

                  (c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.

                  (d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(v), upon the request of the NIMs Insurer or the Holders of Certificates
representing more than 50% of the Voting Rights allocated to any Class of
Certificates, shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.

                  SECTION 3.13.             [intentionally omitted]

                  SECTION 3.14.             Maintenance of Hazard Insurance and
                                            Errors and Omissions and Fidelity
                                            Coverage.

                  (a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage
Loan, plus accrued interest at the Mortgage Rate and related Servicing Advances
(each measured at the time it became an REO Property). The Master Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to be
collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing loans held for its
own account, subject to the terms and conditions of the related Mortgage and
Mortgage Note) shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11, if received in respect of a Mortgage Loan,
or in the REO Account, subject to withdrawal pursuant to Section 3.23, if
received in respect of an REO Property. Any cost incurred by the Master Servicer
in maintaining any such insurance shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid principal balance of
the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan
so permit. It is understood and agreed that

                                       68

<PAGE>

no earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, the Master Servicer will cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the unpaid principal balance of the related Mortgage Loan;
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program) and
(iii) the maximum insurable value of the improvements which are a part of the
related Mortgaged Property.

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of A:V
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating) insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first two sentences of this Section 3.14, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.

                  (b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall
provide the Trustee and the NIMs Insurer (upon reasonable request) with copies
of any such insurance policies and fidelity bond. The Master Servicer shall be
deemed to have complied with this provision if an Affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancelable without thirty days'
prior written notice to the Trustee. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.

                                       69

<PAGE>

                  SECTION 3.15.  Enforcement of Due-On-Sale Clauses; Assumption
                                 Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so. If the Master Servicer reasonably believes it
is unable under applicable law to enforce such "due-on-sale" clause, or if any
of the other conditions set forth in the proviso to the preceding sentence
apply, the Master Servicer is authorized to enter into an assumption and
modification agreement from or with the person to whom such property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. The Master Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Master Servicer. In connection with
any assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of the PMI Policy and any applicable
hazard insurance policy, or a new policy meeting the requirements of this
Section is obtained. Any fee collected by the Master Servicer in respect of an
assumption or substitution of liability agreement will be retained by the Master
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Monthly Payment) may be amended
or modified, except as otherwise required pursuant to the terms thereof or
otherwise permitted under Section 3.01. The Master Servicer shall notify the
Trustee and any respective Custodian that any such substitution or assumption
agreement has been completed by forwarding to the Trustee or to such Custodian,
as the case may be, the executed original of such substitution or assumption
agreement, which document shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

                                       70

<PAGE>

                  SECTION 3.16.  Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01 and the Loss Mitigation Action Plan,
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07. The Master Servicer shall be responsible for
all costs and expenses incurred by it in any such proceedings; provided,
however, that such costs and expenses will be recoverable as Servicing Advances
by the Master Servicer as contemplated in Section 3.11 and Section 3.23. The
foregoing is subject to the provision that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its discretion that such restoration will
increase the proceeds of liquidation of the related Mortgage Loan after
reimbursement to itself for such expenses.

                  (b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:

                         (1) such Mortgaged Property is in compliance with
                  applicable environmental laws or, if not, that it would be in
                  the best economic interest of the Trust Fund to take such
                  actions as are necessary to bring the Mortgaged Property into
                  compliance therewith; and

                         (2) there are no circumstances present at such
                  Mortgaged Property relating to the use, management or disposal
                  of any hazardous substances, hazardous materials, hazardous
                  wastes, or petroleum-based materials for which investigation,
                  testing, monitoring, containment, clean-up or remediation
                  could be required under any federal, state or local law or
                  regulation, or that if any such materials are present for
                  which such action could be required, that it would be in the
                  best economic interest of the Trust Fund to take such actions
                  with respect to the affected Mortgaged Property.

                                       71

<PAGE>

                  Notwithstanding the foregoing, if such environmental audit
reveals, or if the Master Servicer has actual knowledge or notice, that such
Mortgaged Property contains such toxic or hazardous wastes or substances, the
Master Servicer shall not foreclose or accept a deed in lieu of foreclosure
without the prior written consent of the NIMs Insurer.

                  The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into 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 Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

                  (c) (i) The NIMS Insurer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16(c)(i), the Master Servicer shall be required to
continue to make Advances pursuant to Section 4.04. The NIMS Insurer shall not
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The NIMS Insurer
shall purchase such delinquent Mortgage Loan at a price equal to the Purchase
Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to
this Section 3.16(c)(i) shall be accomplished by remittance to the Master
Servicer for deposit in the Collection Account of the amount of the Purchase
Price. The Trustee shall immediately effectuate the conveyance of such
delinquent Mortgage Loan to the NIMS Insurer to the extent necessary, including
the prompt delivery of all documentation to the NIMS Insurer.

                           (ii)     During the first full calender month (but
excluding the last Business Day thereof) following a Mortgage Loan or related
REO Property becoming 90 days or more delinquent, the Master Servicer shall have
the option, but not the obligation to purchase from the Trust Fund any such
Mortgage Loan or related REO Property that is then still 90 days or more
delinquent, which the Master Servicer determines in good faith will otherwise
become subject to foreclosure proceedings (evidence of such determination to be
delivered in writing to the Trustee prior to purchase), at a price equal to the
Purchase Price. The Purchase Price for any Mortgage Loan or related REO Property
purchased hereunder shall be deposited in the Collection Account, and the
Trustee, upon written certification of such deposit, shall release or cause to
be released to the Master Servicer the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Master Servicer shall furnish and as shall be

                                       72

<PAGE>

necessary to vest in the Master Servicer title to any Mortgage Loan or related
REO Property released pursuant hereto.

                  If with respect to any delinquent Mortgage Loan or related REO
Property, the option of the Master Servicer set forth in the preceding paragraph
shall have arisen but the Master Servicer shall have failed to exercise such
option on or before the Business Day preceding the last Business Day of the
calender month following the calender month during which such Mortgage Loan or
related REO Property first became 90 days or more delinquent, then such option
shall automatically expire; provided, however, that if any such Mortgage Loan or
related REO Property shall cease to be 90 days or more delinquent but then
subsequently shall again become 90 days or more delinquent, then the Master
Servicer shall be entitled to another repurchase option with respect to such
Mortgage Loan or REO Property as provided in the preceding paragraph.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second,
to accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Master Servicer as follows: first, to
unpaid Servicing Fees; and second, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid Servicing Fees shall
be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).

                  SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
promptly notify the Trustee and any related Custodian by a certification in the
form of Exhibit E-2 (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such certification and
request, the Trustee or such Custodian, as the case may be, shall promptly
release the related Mortgage File to the Master Servicer. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Collection Account or the Distribution Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the form of
Exhibit E-l, release the related Mortgage File to the Master Servicer, and the
Trustee shall,

                                       73

<PAGE>

at the direction of the Master Servicer, execute such documents as shall be
necessary to the prosecution of any such proceedings and the Master Servicer
shall retain such Mortgage File in trust for the benefit of the
Certificateholders. Such Request for Release shall obligate the Master Servicer
to return each and every document previously requested from the Mortgage File to
the Trustee or to such Custodian when the need therefor by the Master Servicer
no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered to the Trustee a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee or such Custodian to the Master Servicer.

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such certification shall include a request that such
pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.

                  SECTION 3.18.             Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement.

                  Additional servicing compensation in the form of assumption
fees, late payment charges, NSF fees, reconveyance fees and other similar fees
and charges (other than Prepayment Charges) shall be retained by the Master
Servicer (subject to Section 3.24) only to the extent such fees or charges are
received by the Master Servicer. The Master Servicer shall also be entitled
pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account, and
pursuant to Section 3.23(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other

                                       74

<PAGE>

income earned on deposits therein, subject to Section 3.12 and Section 3.24. The
Master Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including premiums for the
insurance required by Section 3.14, to the extent such premiums are not paid by
the related Mortgagors or by a Sub-Servicer, servicing compensation of each
Sub-Servicer, and to the extent provided herein in Section 8.05, the fees and
expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.

                  SECTION 3.19. Reports to the Trustee; Collection Account
                                Statements.

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, the NIMS Insurer and the Depositor
a statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.10(a) and each category of withdrawal specified
in Section 3.11. Such statement may be in the form of the then current Fannie
Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as to
the aggregate of the outstanding principal balances of all of the Mortgage Loans
as of the last day of the calendar month immediately preceding such Distribution
Date. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Trustee.

                  SECTION 3.20.             Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the NIMs
Insurer, the Depositor and each Rating Agency on or before April 30th of each
calendar year commencing in 2002, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding year and of performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of any such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon the request and at the expense of the requesting party, provided that such
statement is delivered by the Master Servicer to the Trustee.

                  SECTION 3.21.    Independent Public Accountants' Servicing
                                   Report.

                  Not later than April 30th of each calendar year commencing in
2002, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of

                                       75

<PAGE>

residential mortgage loans during the most recently completed fiscal year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
residential mortgage loans by Sub- Servicers, upon comparable reports of firms
of independent certified public accountants rendered on the basis of
examinations conducted in accordance with the same standards (rendered within
one year of such report) with respect to those Sub-Servicers. Immediately upon
receipt of such report, the Master Servicer shall furnish a copy of such report
to the Trustee, the NIMs Insurer and each Rating Agency. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided that such statement is delivered by
the Master Servicer to the Trustee. In the event such firm of independent
certified public accountants requires the Trustee to agree to the procedures
performed by such firm, the Master Servicer shall direct the Trustee in writing
to so agree; it being understood and agreed that the Trustee will deliver such
letter of agreement in conclusive reliance upon the direction of the Master
Servicer, and the Trustee has not made any independent inquiry or investigation
as to, and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.

                  SECTION 3.22.             Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee, the NIMs Insurer and to any Person identified to the Master Servicer as
a prospective transferee of a Certificate, upon reasonable request during normal
business hours at the offices of the Master Servicer designated by it at the
expense of the Person requesting such access. In each case, access to any
documentation regarding the Mortgage Loans may be conditioned upon the
requesting party's acknowledgment in writing of a confidentiality agreement
regarding any information that is required to remain confidential under the
Gramm-Leach-Bliley Act of 1999.

                  SECTION 3.23.      Title, Management and Disposition of REO
                                     Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. Pursuant to the power of attorney granted in Section
3.01, the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.23 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of REMIC I (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year REMIC I acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMs Insurer and the

                                       76

<PAGE>

Depositor an Opinion of Counsel, addressed to the Trustee, the NIMs Insurer and
the Depositor, to the effect that the holding by REMIC I of such REO Property
subsequent to three years after its acquisition will not result in the
imposition on REMIC I or REMIC II of taxes on "prohibited transactions" thereof,
as defined in Section 860F of the Code, or cause any of REMIC I or REMIC II to
fail to qualify as a REMIC under Federal law at any time that any Certificates
are outstanding. The Master Servicer shall manage, conserve, protect and operate
each REO Property for the benefit of the Certificateholders and solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by REMIC I or REMIC II
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions.

                  (b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.

                  (c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement
(including the Loss Mitigation Action Plan), to do any and all things in
connection with any REO Property as are consistent with the manner in which the
Master Servicer manages and operates similar property owned by the Master
Servicer or any of its Affiliates, all on such terms and for such period as the
Master Servicer deems to be in the best interests of Certificateholders and
appropriate to effect the prompt disposition and sale of the REO Property. In
connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof,
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:

                         (i) all insurance premiums due and payable in respect
                  of such REO Property;

                         (ii) all real estate taxes and assessments in respect
                  of such REO Property that may result in the imposition of a
                  lien thereon; and

                         (iii) all costs and expenses necessary to maintain such
                  REO Property.

                                       77

<PAGE>

To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.

                  Notwithstanding the Master Servicer's obligation to the
Certificateholders to manage and operate (including the collection of rents from
existing tenants and management of any leases acquired with the REO property to
the extent applicable) the REO Property from the date of acquisition until the
date of sale, neither the Master Servicer nor the Trustee shall:

                         (i) authorize the Trust Fund to renew or extend any New
                  Lease with respect to any REO Property, if the New Lease by
                  its terms will give rise to any income that does not
                  constitute Rents from Real Property;

                        (ii) authorize any amount to be received or accrued
                  under any New Lease other than amounts that will constitute
                  Rents from Real Property; or

                       (iii) authorize any Person to Directly Operate any REO
                  Property on any date more than 90 days after its date of
                  acquisition by the Trust Fund;

unless, in any such case, (A) the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the NIMs Insurer, to the effect that such
action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by REMIC I, and (B) the Master Servicer has received written
instructions from the Trustee authorizing the specific action to be taken.

                  The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:

                         (i) the terms and conditions of any such contract shall
                  not be inconsistent herewith;

                        (ii) any such contract shall require, or shall be
                  administered to require, that the Independent Contractor pay
                  all costs and expenses incurred in connection with the
                  operation and management of such REO Property, including those
                  listed above and remit all related revenues (net of such costs
                  and expenses) to the Master Servicer as soon as practicable,
                  but in no event later than thirty days following the receipt
                  thereof by such Independent Contractor;

                       (iii) none of the provisions of this Section 3.23(c)
                  relating to any such contract or to actions taken through any
                  such Independent Contractor shall be deemed to relieve the
                  Master Servicer of any of its duties and obligations to the
                  Trustee on behalf of the Certificateholders with respect to
                  the operation and management of any such REO Property; and

                                       78

<PAGE>

                        (iv) the Master Servicer shall be obligated with respect
                  thereto to the same extent as if it alone were performing all
                  duties and obligations in connection with the operation and
                  management of such REO Property.

The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees. The Master Servicer shall not engage an Independent Contractor to
engage in any activities that the Master Servicer would not be permitted to
engage in itself in accordance with the other provisions of this Agreement
(including the Loss Mitigation Action Plan).

                  (d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).

                  (e) Subject to the time constraints set forth in Section
3.23(a), (including the constraint that the Master Servicer hold and manage each
REO Property "solely for the purpose of its prompt disposition") each REO
disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as shall be in conformity with the requirements of the
Loss Mitigation Action Plan and as shall be normal and usual in its general
servicing activities for similar properties.

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

                  (g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.

                                       79

<PAGE>

                  SECTION 3.24.    Obligations of the Master Servicer in Respect
                                   of Prepayment Interest Shortfalls.

                  The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting solely from Principal Prepayments during the related Prepayment
Period and (ii) the amount of its aggregate Servicing Fee for the most recently
ended calendar month. The Master Servicer shall not have the right to
reimbursement for any amounts remitted to the Trustee in respect of Prepayment
Interest Shortfalls. Such amounts so remitted shall be included in the Available
Funds and distributed therewith on the next Distribution Date. The Master
Servicer shall not be obligated to pay any amounts with respect to Relief Act
Interest Shortfalls.

                  SECTION 3.25.             Obligations of the Master Servicer
                                            in Respect of Mortgage Rates and
                                            Monthly Payments.

                  In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the
Trustee, the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement.

                  SECTION 3.26.             Advance Facility.

                  (a) The Master Servicer, with the consent of the NIMs Insurer,
is hereby authorized to enter into a facility with any Person which provides
that such Person (an "Advancing Person") may fund P&I Advances and/or Servicing
Advances under this Agreement, although no such facility shall reduce or
otherwise affect the Master Servicer's obligation to fund such P&I Advances
and/or Servicing Advances. To the extent that an Advancing Person funds any P&I
Advance or any Servicing Advance and provides the Trustee with notice
acknowledged by the Master Servicer that such Advancing Person is entitled to
reimbursement directly from the Trustee pursuant to the terms of the Advance
Facility, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Agreement for such amount to the extent provided in Section
3.26(b). Such notice from the Advancing Person must specify the amount of the
reimbursement, the Section of this Agreement that permits the applicable P&I
Advance or Servicing Advance to be reimbursed and the section(s) of the Advance
Facility that entitle the Advancing Person to request reimbursement from the
Trustee, rather than the Master Servicer, and include the Master Servicer's
acknowledgment thereto or proof of an Event of Default under the Advance
Facility. The Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall be
entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.26. An Advancing Person whose
obligations hereunder are limited to the funding of P&I Advances and/or
Servicing Advances shall not be

                                       80

<PAGE>

required to meet the qualifications of a Sub-Servicer pursuant to Section 3.02
hereof.. If the terms of a facility proposed to be entered into with an
Advancing Servicer by the Trust Fund would not materially and adversely affect
the interests of any Certificateholder, then the NIMs Insurer shall not withhold
its consent to the Trust Fund's entering such facility.

                  (b) If an Advancing Person is entitled to reimbursement for
any particular P&I Advance or Servicing Advance as set forth in Section 3.26(a),
then the Master Servicer shall not be permitted to reimburse itself therefor
under Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi) or Section
3.11(a)(ix), but instead the Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.10(b) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to an
Advancing Person reimbursements for P&I Advances and Servicing Advances from the
Distribution Account to the same extent the Master Servicer would have been
permitted to reimburse itself for such P&I Advances and/or Servicing Advances in
accordance with Section 3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(vi)
or Section 3.11(a)(ix), as the case may be, had the Master Servicer made such
Advance or Servicing Advance.

                  SECTION 3.27. PMI Policy; Claims Under the PMI Policy.

                  Notwithstanding anything to the contrary elsewhere in this
Article III, the Master Servicer shall not agree to any modification or
assumption of a PMI Mortgage Loan or take any other action with respect to a PMI
Mortgage Loan that could result in denial of coverage under the PMI Policy. The
Master Servicer shall notify the PMI Insurer that the Trustee, on behalf of the
Certificateholders, is the insured, as that term is defined in the PMI Policy,
of each PMI Mortgage Loan. The Master Servicer shall, on behalf of the Trustee,
prepare and file on a timely basis with the PMI Insurer, with a copy to the
Trustee, all claims which may be made under the PMI Policy with respect to the
PMI Mortgage Loans. The Master Servicer shall take all actions required under
the PMI Policy as a condition to the payment of any such claim. Any amount
received from the PMI Insurer with respect to any such PMI Mortgage Loan shall
be deposited by the Master Servicer into the Collection Account in accordance
with Section 3.10.

                  SECTION 3.28              Reserve Fund.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain with itself a separate, segregated trust account titled,
"Reserve Fund, Bankers Trust Company of California, N.A., as Trustee, in trust
for the registered holders of Ameriquest Mortgage Securities Inc., Floating Rate
Mortgage Pass-Through Certificates, Series 2001-1." On the Closing Date, the
Depositor will deposit, or cause to be deposited, into the Reserve Fund $1,000.

                  (b) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class CE Certificateholders
to, and therefore will, deposit into the Reserve Fund the amounts described in
Section 4.01(a)(4)(viii), rather than distributing such amounts to the Class CE
Certificateholders. On each such Distribution Date, the Trustee shall hold all
such amounts for the benefit of the Holders of the Class A Certificates and the
Mezzanine Certificates, and will distribute such amounts to the Holders of the
Class A Certificates and the Mezzanine Certificates in the

                                       81

<PAGE>

amounts and priorities set forth in Section 4.01(a). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Trustee shall deposit
into the Reserve Fund on behalf of the Class CE Certificateholders, from amounts
otherwise distributable to the Class CE Certificateholders, an amount such that
when added to other amounts already on deposit in the Reserve Fund, the
aggregate amount on deposit therein is equal to $1,000.

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

                  (d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Reserve Fund the amounts described above on each
Distribution Date as to which there is any Net WAC Rate Carryover Amount rather
than distributing such amounts to the Class CE Certificateholders. By accepting
a Class CE Certificate, each Class CE Certificateholder further agrees that such
direction is given for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by such acceptance.

                  (e) At the direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the Reserve Fund to invest the funds in such
account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class CE Certificates with respect to the Reserve
Fund is received by the Trustee, the Trustee shall invest the funds in such
account in Permitted Investments managed by the Trustee or an Affiliate of the
kind described in clause (vi) of the definition of Permitted Investments.
Notwithstanding the foregoing, any funds in the Reserve Fund shall be invested
in Deutsche Bank Institutional Cash Reserves/Fund 1687 for so long as such
investment complies with clause (vi) of the definition of Permitted Investments.
All income and gain earned upon such investment shall be deposited into the
Reserve Fund.

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

                                       82

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01.             Distributions.

                  (a)(1)(A) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Interest, as the case may
be:

                         (i) first, to Holders of REMIC I Regular Interest
                  I-LT1, REMIC Regular Interest I-LT2, REMIC I Regular Interest
                  I-LT3, REMIC I Regular Interest I-LT4, REMIC I Regular
                  Interest I-LT5 and REMIC I Regular Interest I-LTP, PRO RATA,
                  in an amount equal to (A) the Uncertificated Interest for such
                  Distribution Date, plus (B) any amounts in respect thereof
                  remaining unpaid from previous Distribution Dates. Amounts
                  payable as Uncertificated Interest in respect of REMIC I
                  Regular Interest I-LT5 shall be reduced when the REMIC I
                  Overcollateralized Amount is less than the REMIC I Required
                  Overcollateralization Amount, by the lesser of (x) the amount
                  of such difference and (y) the Maximum I-LT5 Uncertificated
                  Interest Deferral Amount;

                        (ii) second, to the Holders of REMIC I Regular
                  Interests, in an amount equal to the remainder of the
                  Available Funds for such Distribution Date after the
                  distributions made pursuant to clause (i) above, allocated as
                  follows:

                           (a) to the Holders of REMIC I Regular Interest I-LT1,
                           98.00% of such remainder, until the Uncertificated
                           Balance of such REMIC I Regular Interest is reduced
                           to zero;

                           (b) to the Holders of REMIC I Regular Interest I-LT2,
                           REMIC I Regular Interest I-LT3 and REMIC I Regular
                           Interest I-LT4, 1.00% of such remainder, in the same
                           proportion as principal payments are allocated to the
                           Corresponding Certificates, until the Uncertificated
                           Balances of such REMIC I Regular Interests are
                           reduced to zero;

                           (c) to the Holders of REMIC I Regular Interest I-LT5,
                           1.00% of such remainder, until the Uncertificated
                           Balance of such REMIC I Regular Interest is reduced
                           to zero; then

                           (d) to the Holders of REMIC I Regular Interest I-LTP,
                           on the Distribution Date immediately following the
                           expiration of the latest Prepayment Charge as
                           identified on the Prepayment Charge Schedule or any
                           Distribution Date thereafter until $100 has been
                           distributed pursuant to this clause; and

                                       83

<PAGE>

                            (e) any remaining amount to the Holders of the Class
                            R Certificates (as Holder of the Class R-I
                            Interest);

provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated to
Holders of REMIC I Regular Interest I-LT1 and REMIC I Regular Interest I-LT5,
respectively.

                  (2) On each Distribution Date other than the first
Distribution Date, prior to making the distributions set forth below, the
Trustee shall withdraw the PMI Insurer Fee from the Distribution Account (to the
extent not previously paid on the Trustee's behalf by the Master Servicer) and
pay such amount to the PMI Insurer, based on information received from the
Master Servicer. On each Distribution Date, the Trustee shall withdraw from the
Distribution Account an amount equal to the Interest Remittance Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority:

                         (i) to the Holders of the Class A Certificates, an
                  amount equal to the Senior Interest Distribution Amount
                  allocable to the Class A Certificates;

                         (ii) to the Holders of the Class M-1 Certificates, an
                  amount equal to the Interest Distribution Amount allocable to
                  the Class M-1 Certificates; and

                         (iii) to the Holders of the Class M-2 Certificates, an
                  amount equal to the Interest Distribution Amount allocable to
                  the Class M-2 Certificates.

                  (3) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account an amount equal to the Principal Distribution Amount
and distribute to the Certificateholders the following amounts, in the following
order of priority:

                         (i) On each Distribution Date (a) prior to the Stepdown
                  Date or (b) on which a Trigger Event is in effect, the
                  Principal Distribution Amount shall be distributed in the
                  following order of priority;

                           first, to the Holders of the Class A Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero;

                           second, to the Holders of the Class M-1 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero; and

                           third, to the Holders of the Class M-2 Certificates,
                           until the Certificate Principal Balance of such Class
                           has been reduced to zero.

                        (ii) On each Distribution Date (a) on or after the
                  Stepdown Date and (b) on which a Trigger Event is not in
                  effect, the Principal Distribution Amount shall be distributed
                  in the following order of priority;

                                       84

<PAGE>

                           first, the lesser of (x) the Principal Distribution
                           Amount and (y) the Class A Principal Distribution
                           Amount shall be distributed to the Holders of the
                           Class A Certificates, until the Certificate Principal
                           Balance of such Class has been reduced to zero;

                           second, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the amount
                           distributed to the Holders of the Class A
                           Certificates pursuant to clause first above and (y)
                           the Class M-1 Principal Distribution Amount shall be
                           distributed to the Holders of the Class M-1
                           Certificates, until the Certificate Principal Balance
                           of such Class has been reduced to zero; and

                           third, the lesser of (x) the excess of (i) the
                           Principal Distribution Amount over (ii) the sum of
                           the amounts distributed to the Holders of the Class A
                           Certificates pursuant to clause first above and to
                           the Holders of the Class M-1 Certificates pursuant to
                           clause second above and (y) the Class M-2 Principal
                           Distribution Amount shall be distributed to the
                           Holders of the Class M-2 Certificates, until the
                           Certificate Principal Balance of such Class has been
                           reduced to zero.

                  (4) On each Distribution Date, the Net Monthly Excess Cashflow
(or, in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive
of any Overcollateralization Reduction Amount) shall be distributed as follows:

                           (i) to the Holders of the Class or Classes of
                           Certificates then entitled to receive distributions
                           in respect of principal, in an amount equal to the
                           principal portion of any Realized Losses incurred or
                           deemed to have been incurred on the Mortgage Loans,
                           applied to reduce the Certificate Principal Balance
                           of such Certificates until the aggregate Certificate
                           Principal Balance of such Certificates is reduced to
                           zero;

                           (ii) to the Holders of the Class or Classes of
                           Certificates then entitled to receive distributions
                           in respect of principal, in an amount equal to the
                           Overcollateralization Increase Amount, applied to
                           reduce the Certificate Principal Balance of such
                           Certificates until the aggregate Certificate
                           Principal Balance of such Certificates is reduced to
                           zero;

                           (iii) to the Holders of the Class M-1 Certificates,
                           in an amount equal to the Interest Carry Forward
                           Amount allocable to such Class of Certificates;

                           (iv) to the Holders of the Class M-2 Certificates, in
                           an amount equal to the Interest Carry Forward Amount
                           allocable to such Class of Certificates;

                           (v) to the Holders of the Class A Certificates in an
                           amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (to the extent not covered by

                                       85

<PAGE>

                           payments pursuant to Section 3.24) and any Relief Act
                           Interest Shortfall allocated to such Certificates;

                           (vi) to the Holders of the Class M-1 Certificates, in
                           an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (to the extent not covered by
                           payments pursuant to Section 3.24) and any Relief Act
                           Interest Shortfall allocated to such Certificates;

                           (vii) to the Holders of the Class M-2 Certificates,
                           in an amount equal to the aggregate of any Prepayment
                           Interest Shortfalls (to the extent not covered by
                           payments pursuant to Section 3.24) and any Relief Act
                           Interest Shortfall allocated to such Certificates;

                           (viii)   to the Reserve Fund, the amount required by
                           Section 3.28(b);

                           (ix)     [reserved]

                           (x) to the Holders of the Class CE Certificates the
                           Interest Distribution Amount and any
                           Overcollateralization Reduction Amount for such
                           Distribution Date; and

                           (xi) to the Holders of the Class R Certificates (as
                           Holder of the Class R-II Interests), any remaining
                           amounts; provided that if such Distribution Date is
                           the Distribution Date immediately following the
                           expiration of the latest Prepayment Charge term as
                           identified on the Mortgage Loan Schedule or any
                           Distribution Date thereafter, then any such remaining
                           amounts will be distributed FIRST, to the Holders of
                           the Class P Certificates, until the Certificate
                           Principal Balance thereof has been reduced to zero;
                           and SECOND, to the Holders of the Class R
                           Certificates (as Holder of the Class R-II Interest).

                  (b) On each Distribution Date, after making the distributions
of the Available Funds as set forth above, the Trustee will FIRST, withdraw from
the Reserve Fund all income from the investment of funds in the Reserve Fund and
distribute such amount to the Holders of the Class CE Certificates, and SECOND,
withdraw from the Reserve Fund, to the extent of amounts remaining on deposit
therein, the amount of any Net WAC Rate Carryover Amount for such Distribution
Date and distribute such amount first, to the Class A Certificates; second, to
the Class M-1 Certificates and third, to the Class M-2 Certificates, in each
case to the extent the Net WAC Carryover Amount is allocable to each such Class.

                  On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer, Prepayment Charges payable by the
Master Servicer pursuant to Section 2.03(b)(ii)(A) and Master Servicer
Prepayment Charge Payment Amounts payable by the Master Servicer pursuant to
Section 2.03(b)(ii)(B), subject to Section 2.03(b)(iii), in each case to the
extent not related to Principal Prepayments occurring after the related
Prepayment Period, and the Trustee shall distribute such

                                       86

<PAGE>

amounts to the Holders of the Class P Certificates. For federal income tax
purposes, such amounts shall first be deemed distributed to REMIC I Regular
Interest I-LTP, with 100% of such amount payable to the Class P Certificates.
Such distributions shall not be applied to reduce the Certificate Principal
Balance of the Class P Certificates.

                  (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Principal Balance that is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the initial Certificate Principal Balance of
such Class of Certificates, or otherwise by check mailed by first class mail to
the address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
distribution.

                  Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.

                  (d) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. Neither the Holders of any Class of Certificates nor the Trustee nor
the Master Servicer shall in any way be responsible or liable to the Holders of
any other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.

                  (e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five (5) days after the related Determination Date, mail to each
Holder on such date of such Class of Certificates a notice to the effect that:

                         (i) the Trustee expects that the final distribution
                  with respect to such Class of Certificates will be made on
                  such Distribution Date, but only upon presentation and
                  surrender of such Certificates at the office of the Trustee
                  therein specified, and

                                       87

<PAGE>

                         (ii) no interest shall accrue on such Certificates from
                  and after the end of the related Interest Accrual Period.

Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non- tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 4.01(e) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining
non-tendering Certificateholders concerning surrender of their Certificates but
shall continue to hold any remaining funds for the benefit of non-tendering
Certificateholders. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in such trust fund. If within one year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to Salomon Smith Barney Inc. all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 4.01(e).

                  (f) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate or a
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Certificate in respect of Realized Losses
pursuant to Section 4.04 and (b) distributed to the Holder of such Certificate
in reduction of the Certificate Principal Balance thereof pursuant to this
Section 4.01 from Net Monthly Excess Cashflow and (ii) in no event shall the
Uncertificated Balance of a REMIC I Regular Interest be reduced more than once
in respect of any particular amount both (a) allocated to such REMIC I Regular
Interest in respect of Realized Losses pursuant to Section 4.04 and (b)
distributed on such REMIC I Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 4.01.

                  SECTION 4.02.             Statements to Certificateholders.

                  On each Distribution Date, the Trustee shall prepare and make
available to each Holder of the Regular Certificates and the NIMs Insurer, a
statement as to the distributions made on such Distribution Date setting forth:

                         (i) the amount of the distribution made on such
                  Distribution Date to the Holders of the Certificates of each
                  Class allocable to principal, and the amount of distribution
                  made on such Distribution Date to the Holders of the Class P
                  Certificates allocable to Prepayment Charges or Master
                  Servicer Prepayment Charge Payment Amounts;

                                       88

<PAGE>

                         (ii) the amount of the distribution made on such
                  Distribution Date to the Holders of the Certificates of each
                  Class allocable to interest;

                         (iii) the aggregate Servicing Fee received by the
                  Master Servicer during the related Due Period and such other
                  customary information as the Trustee deems necessary or
                  desirable, or which a Certificateholder reasonably requests,
                  to enable Certificateholders to prepare their tax returns;

                         (iv) the aggregate amount of P&I Advances for such
                  Distribution Date;

                         (v) the aggregate Stated Principal Balance of the
                  Mortgage Loans and any REO Properties as of the close of
                  business on such Distribution Date;

                         (vi) the number, aggregate principal balance, weighted
                  average remaining term to maturity and weighted average
                  Mortgage Rate of the Mortgage Loans as of the related Due Date
                  and the number and aggregate principle balance of all
                  Subsequent Mortgage Loans added during the preceding Due
                  Period;

                         (vii) the number and aggregate unpaid principal balance
                  of Mortgage Loans (a) delinquent 30-59 days, (b) delinquent
                  60-89 days, (c) delinquent 90 or more days in each case, as of
                  the last day of the preceding calendar month; provided,
                  however, that the aggregate unpaid principal balance of
                  Mortgage Loans shall be as of the last day of the related Due
                  Period, (d) as to which foreclosure proceedings have been
                  commenced, (e) with respect to which the related Mortgagor has
                  filed for protection under applicable bankruptcy laws, with
                  respect to whom bankruptcy proceedings are pending or with
                  respect to whom bankruptcy protection is in force and (f) the
                  Delinquency Percentage;

                         (viii) with respect to any Mortgage Loan that became an
                  REO Property during the preceding calendar month, the loan
                  number of such Mortgage Loan, the unpaid principal balance and
                  the Stated Principal Balance of such Mortgage Loan as of the
                  date it became an REO Property;

                         (ix) the book value and the Stated Principal Balance of
                  any REO Property as of the close of business on the last
                  Business Day of the calendar month preceding the Distribution
                  Date;

                         (x) the aggregate amount of Principal Prepayments made
                  during the related Prepayment Period;

                         (xi) the aggregate amount of Realized Losses incurred
                  during the related Prepayment Period (or, in the case of
                  Bankruptcy Losses allocable to interest, during the related
                  Due Period), separately identifying whether such Realized
                  Losses constituted Bankruptcy Losses and the aggregate amount
                  of Realized Losses incurred since the Closing Date;

                                       89

<PAGE>

                         (xii) the aggregate amount of Extraordinary Trust Fund
                  Expenses withdrawn from the Collection Account or the
                  Distribution Account for such Distribution Date;

                         (xiii) the aggregate Certificate Principal Balance of
                  the each Class of Certificates, after giving effect to the
                  distributions, and allocations of Realized Losses, made on
                  such Distribution Date, separately identifying any reduction
                  thereof due to allocations of Realized Losses;

                         (xiv) the Certificate Factor for each such Class of
                  Certificates applicable to such Distribution Date;

                         (xv) the Interest Distribution Amount in respect of the
                  Class A Certificates, the Mezzanine Certificates and the Class
                  CE Certificates for such Distribution Date and the Interest
                  Carry Forward Amount, if any, with respect to the Class A
                  Certificates and the Mezzanine Certificates on such
                  Distribution Date, and in the case of the Class A
                  Certificates, the Mezzanine Certificates and the Class CE
                  Certificates, separately identifying any reduction thereof due
                  to allocations of Realized Losses, Prepayment Interest
                  Shortfalls and Relief Act Interest Shortfalls;

                         (xvi) the aggregate amount of any Prepayment Interest
                  Shortfall for such Distribution Date, to the extent not
                  covered by payments by the Master Servicer pursuant to Section
                  3.24;

                         (xvii) the aggregate amount of Relief Act Interest
                  Shortfalls for such Distribution Date;

                         (xviii) the Required Overcollateralized Amount and the
                  Credit Enhancement Percentage for such Distribution Date;

                         (xix) the Overcollateralization Increase Amount, if
                  any, for such Distribution Date;

                         (xx) the Overcollateralization Reduction Amount, if
                  any, for such Distribution Date;

                         (xxi) with respect to any Mortgage Loan as to which
                  foreclosure proceedings have been concluded, the loan number
                  and unpaid principal balance of such Mortgage Loan as of the
                  date of such conclusion of foreclosure proceedings;

                         (xxii) with respect to Mortgage Loans as to which a
                  Final Liquidation has occurred, the number of Mortgage Loans,
                  the unpaid principal balance of such Mortgage Loans as of the
                  date of such Final Liquidation and the amount of proceeds
                  (including Liquidation Proceeds and Insurance Proceeds)
                  collected in respect of such Mortgage Loans;

                                       90

<PAGE>

                         (xxiii) the respective Pass-Through Rates applicable to
                  the Class A Certificates, the Mezzanine Certificates and the
                  Class CE Certificates for such Distribution Date and the
                  Pass-Through Rate applicable to the Class A Certificates and
                  the Mezzanine Certificates for the immediately succeeding
                  Distribution Date;

                         (xxiv) the amount on deposit in the Pre-Funding
                  Account, the Reserve Account and the Interest Coverage Account
                  as of the Determination Date;

                         (xxv) for the distribution occurring on the
                  Distribution Date immediately following the end of the Funding
                  Period, the current balance on deposit in the Pre- Funding
                  Account that has not been used to purchase Subsequent Mortgage
                  Loans and that is being distributed to the Class A
                  Certificateholders as a mandatory prepayment of principal, if
                  any, on such Distribution Date;

                         (xxvi) (A) the amount of payments received related to
                  claims under the PMI Policy during the related Prepayment
                  Period (and the number of Mortgage Loans to which such
                  payments related) and (B) the cumulative amount of payments
                  received related to claims under the PMI Policy since the
                  Closing Date (and the number of Mortgage Loans to which such
                  payments related);

                         (xxvii) (A) the dollar amount of claims made under the
                  PMI Policy that were denied during the Prepayment Period (and
                  the number of Mortgage Loans to which such denials related)
                  and (B) the dollar amount of the cumulative claims made under
                  the PMI Policy that were denied since the Closing Date (and
                  the number of Mortgage Loans to which such denials related);
                  and

                         (xxviii) the Net WAC Rate Carryover Amount for the
                  Class A Certificates and the Mezzanine Certificates, if any,
                  for such Distribution Date and the amount remaining unpaid
                  after reimbursements therefor on such Distribution Date.

         The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the NIMs Insurer, the Master
Servicer, the Trustee and the Rating Agencies via the Trustee's internet
website. The Trustee's internet website shall initially be located at
http:\\www-apps.gis.deutsche-bank.com/invr and assistance in using the website
can be obtained by calling the Trustee's investor relations desk at
1-800-735-7777. Parties that are unable to use the above distribution method are
entitled to have a paper copy mailed to them via first class mail by calling the
investor relations desk and indicating such. The Trustee 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
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.

                  In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.

                                       91

<PAGE>

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMs Insurer and each Person who
at any time during the calendar year was a Holder of a Regular Certificate a
statement containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMs Insurer and each Person who
at any time during the calendar year was a Holder of a Residual Certificate a
statement setting forth the amount, if any, actually distributed with respect to
the Residual Certificates, as appropriate, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared by the
Trustee and furnished to such Holders pursuant to the rules and regulations of
the Code as are in force from time to time.

                  The Trustee shall, upon request, furnish to each
Certificateholder and the NIMs Insurer, during the term of this Agreement, such
periodic, special, or other reports or information, whether or not provided for
herein, as shall be reasonable with respect to the Certificateholder, or
otherwise with respect to the purposes of this Agreement, all such reports or
information to be provided at the expense of the Certificateholder in accordance
with such reasonable and explicit instructions and directions as the
Certificateholder may provide. For purposes of this Section 4.02, the Trustee's
duties are limited to the extent that the Trustee receives timely reports as
required from the Master Servicer.

                  On each Distribution Date the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.

                  SECTION 4.03.             Remittance Reports; P&I Advances.

                  (a) On the Master Servicer Reporting Date, the Master Servicer
shall deliver to the Trustee and the NIMs Insurer by telecopy (or by such other
means as the Master Servicer, the Trustee and the NIMs Insurer may agree from
time to time) a Remittance Report with respect to the related Distribution Date.
Such Remittance Report will include (i) the amount of P&I Advances to be made by
the Master Servicer in respect of the related Distribution Date, the aggregate
amount of P&I Advances outstanding after giving effect to such P&I Advances, and
the aggregate amount of Nonrecoverable P&I Advances in respect of such
Distribution Date and (ii) such other information with respect to the Mortgage
Loans as the Trustee may reasonably require to perform the calculations
necessary to make the distributions contemplated by Section 4.01 and to prepare
the statements to Certificateholders contemplated by Section 4.02. The Trustee
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Master Servicer.

                  (b)      The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of (i) the aggregate amount of

                                       92

<PAGE>

Monthly Payments (with each interest portion thereof net of the related
Servicing Fee), due on the related Due Date in respect of the Mortgage Loans,
which Monthly Payments were delinquent as of the close of business on the
related Determination Date and (ii) with respect to each REO Property, which REO
Property was acquired during or prior to the related Prepayment Period and as to
which such REO Property an REO Disposition did not occur during the related
Prepayment Period, an amount equal to the excess, if any, of the Monthly
Payments (with each interest portion thereof net of the related Servicing Fee)
that would have been due on the related Due Date in respect of the related
Mortgage Loans, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date.

                  On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such P&I Advance) or (iii) in the form of
any combination of (i) and (ii) aggregating the total amount of P&I Advances to
be made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Distribution
Amount for the related Distribution Date (determined without regard to P&I
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make P&I Advances. The Trustee will
provide notice to the Master Servicer and the NIMs Insurer by telecopy by the
close of business on any Master Servicer Remittance Date in the event that the
amount remitted by the Master Servicer to the Trustee on such date is less than
the P&I Advances required to be made by the Master Servicer for the related
Distribution Date.

                  (c) The obligation of the Master Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from REMIC I pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.

                  (d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such P&I Advance or Servicing Advance would, if made,
constitute a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or a Nonrecoverable Servicing Advance or that any proposed P&I Advance
or Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Trustee and the
NIMs Insurer.

                                       93

<PAGE>

                  SECTION 4.04.             Allocation of Realized Losses.

                  (a) On or before each Determination Date, the Master Servicer
shall determine as to each Mortgage Loan and REO Property: (i) the total amount
of Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses and (iii) the
respective portions of such Realized Losses allocable to interest and allocable
to principal. On or before each Determination Date, the Master Servicer shall
also determine as to each Mortgage Loan: (A) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period and (B) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Master Servicer shall be
evidenced by an Officers' Certificate delivered to the Trustee by the Master
Servicer on the Master Servicer Reporting Date immediately following the end of
(x) in the case of Bankruptcy Losses allocable to interest, the Due Period
during which any such Realized Loss was incurred, and (y) in the case of all
other Realized Losses, the Prepayment Period during which any such Realized Loss
was incurred.

                  (b) All Realized Losses on the Mortgage Loans shall be
allocated to any REMIC II Regular Interest pursuant to Section 4.04(c), shall be
allocated by the Trustee on each Distribution Date as follows: first, to Net
Monthly Excess Cashflow; second, to the Class CE Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class M-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; and fourth, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class CE Certificate shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(a)(4)(x). No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates or the Class P Certificates.

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

                                       94

<PAGE>

                  (c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following REMIC I
Regular Interests in the specified percentages, as follows: first, to
Uncertificated Interest payable to the REMIC I Regular Interest I-LT1 and REMIC
I Regular Interest I-LT5 up to an aggregate amount equal to the REMIC I Interest
Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
Balances of the REMIC I Regular Interest I-LT1 and REMIC I Regular Interest
I-LT5 up to an aggregate amount equal to the REMIC I Principal Loss Allocation
Amount, 98% and 2%, respectively; third, to the Uncertificated Balances of REMIC
I Regular Interest I-LT1, REMIC I Regular Interest I-LT4 and REMIC I Regular
Interest I-LT5, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LT4 has been reduced to zero; and fourth to the
Uncertificated Balances of REMIC I Regular Interest I-LT1, REMIC I Regular
Interest I-LT3 and REMIC I Regular Interest I-LT5, 98%, 1% and 1%, respectively,
until the Uncertificated Balance of REMIC I Regular Interest I-LT3 has been
reduced to zero.

                  SECTION 4.05.        Compliance with Withholding Requirements.

                  Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.

                  SECTION 4.06.             Commission Reporting.

                  Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System,
a Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30, 2001, the Trustee
shall file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. Prior to March 31, 2001, the Trustee shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust Fund. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. Promptly after filing any Form 8-K or Form 10-K
pursuant to this Section 4.06, the Trustee shall deliver a copy of such Form 8-K
or Form 10-K, as the case may be, to the Depositor. The Depositor agrees to
promptly furnish to the Trustee, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement and the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission.

                  SECTION 4.07.             Pre-Funding Account.

                  (a)      No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Pre-Funding Account, Bankers Trust Company of California.
N.A. as Trustee for the registered holders of Ameriquest

                                       95

<PAGE>

Mortgage Securities Inc., Floating Rate Mortgage Pass-Through Certificates,
Series 2001-1" (the "Pre-Funding Account"). The Trustee shall, promptly upon
receipt, deposit in the Pre-Funding Account and retain therein the Original
Pre-Funded Amount remitted on the Closing Date to the Trustee by the Depositor.
Funds deposited in the Pre-Funding Account shall be held in trust by the Trustee
for the Certificateholders for the uses and purposes set forth herein.

                  (b) The Trustee will invest funds deposited in the Pre-Funding
Account in Permitted Investments of the kind described in clauses (i), (v) or
(vi) of the definition of Permitted Investments, as directed by the Master
Servicer, with a maturity date no later than the second Business Day preceding
each Distribution Date. For federal income tax purposes, the holder of the
largest Percentage Interest of the Residual Certificates shall be the owner of
the Pre-Funding Account and shall report all items of income, deduction, gain or
loss arising therefrom. All income and gain realized from investment of funds
deposited in the Pre-Funding Account shall be transferred to the Interest
Coverage Account on the Business Day immediately preceding each Distribution
Date. The Master Servicer shall deposit in the Pre-Funding Account the amount of
any net loss incurred in respect of any such Permitted Investment immediately
upon realization of such loss without any right of reimbursement therefor. The
Pre-Funding Account will not be an asset of any of REMIC I or REMIC II.

                  (c)      Amounts on deposit in the Pre-Funding Account shall
be withdrawn by the Trustee as follows:

                         (i) On any Subsequent Transfer Date, the Trustee shall
                  withdraw from the Pre-Funding Account an amount equal to 100%
                  of the Stated Principal Balances of the Subsequent Mortgage
                  Loans transferred and assigned to the Trustee for deposit in
                  the Mortgage Pool on such Subsequent Transfer Date and pay
                  such amount to or upon the order of the Depositor upon
                  satisfaction of the conditions set forth in Section 2.11 with
                  respect to such transfer and assignment;

                        (ii) if the amount on deposit in the Pre-Funding Account
                  has not been reduced to zero during the Funding Period, on the
                  day immediately following the termination of the Funding
                  Period, the Trustee shall deposit into the Distribution
                  Account any amounts remaining in the Pre-Funding Account, net
                  of any gain realized from the investment of funds on deposit
                  therein to the extent not previously paid to the Interest
                  Coverage Account, for distribution in accordance with the
                  terms hereof;

                         (iii) to withdraw any amount not required to be
                  deposited in the Pre- Funding Account or deposited therein in
                  error;

                         (iv) to distribute to the Interest Coverage Account any
                  income and gain realized from the investment of funds in the
                  Pre-Funding Account; and

                         (v) to clear and terminate the Pre-Funding Account upon
                  the earlier to occur of (A) the day immediately following the
                  end of the Funding Period and (B) the termination of this
                  Agreement, with any amounts remaining on deposit therein

                                       96

<PAGE>

                  being paid to the Holders of the Certificates then entitled
                  to distributions in respect of principal.

                  SECTION 4.08.             Interest Coverage Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain a segregated trust account that is an Eligible Account,
which shall be titled "Interest Coverage Account, Bankers Trust Company of
California, N.A., as Trustee for the registered holders of Ameriquest Mortgage
Securities Inc., Floating Rate Mortgage Pass-Through Certificates, Series
2001-1" (the "Interest Coverage Account"). The Trustee shall, promptly upon
receipt, deposit in the Interest Coverage Account and retain therein the
Interest Coverage Amount remitted on the Closing Date to the Trustee by the
Depositor. Funds deposited in the Interest Coverage Account shall be held in
trust by the Trustee for the Certificateholders for the uses and purposes set
forth herein.

                  (b) The Trustee will invest funds deposited in the Interest
Coverage Account in Permitted Investments of the kind described in clauses (i),
(v) or (vi) of the definition of Permitted Investments, as directed by the
Master Servicer, with a maturity date no later than the second Business Day
preceding each Distribution Date. For federal income tax purposes, the holder of
the largest Percentage Interest of the Residual Certificates shall be the owner
of the Interest Coverage Account and shall report all items of income,
deduction, gain or loss arising therefrom. At no time will the Interest Coverage
Account be an asset of any of REMIC I or REMIC II. All income and gain realized
from investment of funds deposited in the Interest Coverage Account shall be for
the sole and exclusive benefit of the Master Servicer and shall be remitted by
the Trustee to the Master Servicer on the first Business Day following each
Distribution Date. The Master Servicer shall deposit in the Interest Coverage
Account the amount of any net loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss.

                  (c) On the Distribution Date immediately following the end of
the Funding Period, the Trustee shall withdraw from the Interest Coverage
Account and deposit in the Distribution Account an amount, as provided in the
related Remittance Report, equal to (i) 30 days' interest on the Original
Pre-Funded Amount calculated at 4.177% per annum minus (ii) the sum of (1) any
interest payments received by the Master Servicer on Subsequent Mortgage Loans
that were during the related Due Period and (2) any P&I Advance in respect of
the interest portion of delinquent Monthly Payments that were due during the
related Due Period on the Subsequent Mortgage Loans in the Trust and having a
Subsequent Cut-off Date prior to the commencement of such Due Period.

                  (d)      [reserved].

                  (e) Upon the earlier of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balance of the Class A Certificates and the Mezzanine Certificates to
zero or (iii) the termination of this Agreement in accordance with Section 9.01,
any amount remaining on deposit in the Interest Coverage Account after
distributions pursuant to paragraph (c) and (d) above shall be withdrawn by the
Trustee and paid to the Depositor or its designee.

                                       97

<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01.             The Certificates.

                  (a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I. At the Closing Date, the aggregate Certificate Principal
Balance of the Certificates will equal the aggregate Stated Principal Balance of
the Mortgage Loans.

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-6. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

                  Upon original issue, the Certificates shall be executed and
delivered by the Trustee, and the Trustee shall cause the Certificates to be
authenticated by the Certificate Registrar to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Certificate Registrar by manual
signature, and such certificate of authentication shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.

                  (b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. All transfers by Certificate Owners of their respective Ownership
Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trustee is hereby
initially appointed as the Book-Entry Custodian and hereby agrees to act as such
in accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act

                                       98

<PAGE>

as such. The Book-Entry Custodian may, and if it is no longer qualified to act
as such, the Book- Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer, the Trustee (if the Trustee is
not the Book-Entry Custodian) and any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Trustee
resigns or is removed in accordance with the terms hereof, the successor trustee
or, if it so elects, the Depository shall immediately succeed to its
predecessor's duties as Book-Entry Custodian. The Depositor shall have the right
to inspect, and to obtain copies of, any Certificates held as Book- Entry
Certificates by the Book-Entry Custodian.

                  The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of
exercising the rights of Certificateholders hereunder. The rights of Certificate
Owners with respect to the Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Certificateholders
and shall give notice to the Depository of such record date.

                  If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book- Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of $10,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $10,000 immediately prior to the issuance of
a Definitive Certificate shall be issued in a minimum denomination equal to the
amount represented by such Book-Entry Certificate. None of the Depositor, the
Master Servicer or the Trustee shall be liable for any delay in the delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

                                       99

<PAGE>

                  SECTION 5.02.  Registration of Transfer and Exchange of
                                 Certificates.

                  (a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Master Servicer and the Depositor, any other
bank or trust company to act as Certificate Registrar under such conditions as
the predecessor Certificate Registrar may prescribe, provided that the
predecessor Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.

                  (b) No transfer of any Class CE Certificate, Class P
Certificate or Residual Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Class CE Certificate, Class P Certificate or
Residual Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor), the Trustee and the Certificate
Registrar shall each require receipt of: (i) if such transfer is purportedly
being made in reliance upon Rule 144A under the 1933 Act, written certifications
from the Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the forms attached
hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Master Servicer, in its capacity as such, or the
Trust Fund), together with copies of the written certification(s) of the
Certificateholder desiring to effect the transfer and/or such
Certificateholder's prospective transferee upon which such Opinion of Counsel is
based, if any. None of the Depositor, the Certificate Registrar or the Trustee
is obligated to register or qualify the Class CE Certificates, the Class P
Certificates or the Residual Certificates under the 1933 Act or any other
securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of a Class
CE Certificate, a Class P Certificate or a Residual Certificate shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate Registrar
and the Master Servicer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.

                  (c) No transfer of a Class CE Certificate, Class P Certificate
or Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code, any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "Plan Assets" of a Plan within the meaning of the Department of Labor

                                       100

<PAGE>

regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the
Depositor, the Trustee and the Master Servicer are provided with an Opinion of
Counsel which establishes to the satisfaction of the Depositor, the Trustee and
the Master Servicer that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor, the
Master Servicer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the Trustee or
the Trust Fund. In lieu of such Opinion of Counsel, any prospective Transferee
of such Certificates may provide a certification in the form of Exhibit G to
this Agreement (or other form acceptable to the Depositor, the Trustee and the
Master Servicer), which the Trustee may rely upon without further inquiry or
investigation. Neither an Opinion of Counsel nor any certification will be
required in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor (in which case, the Depositor or any
affiliate thereof shall have deemed to have represented that such affiliate is
not a Plan or a Person investing Plan Assets) and the Trustee shall be entitled
to conclusively rely upon a representation (which, upon the request of the
Trustee, shall be a written representation) from the Depositor of the status of
such transferee as an affiliate of the Depositor.

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

         If any Class CE Certificate, Class P Certificate or Residual
Certificate or any interest therein is acquired or held in violation of the
provisions of the preceding paragraph, the next preceding permitted beneficial
owner will be treated as the beneficial owner of that Certificate retroactive to
the date of transfer to the purported beneficial owner. Any purported beneficial
owner whose acquisition or holding of any such Certificate or interest therein
was effected in violation of the provisions of the preceding paragraph shall
indemnify and hold harmless the Depositor, the Master Servicer, the Trustee, the
NIMs Insurer and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.

              (d) (i) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions
and to have irrevocably authorized the Trustee or its designee under clause
(iii)(A) below to deliver payments to a Person other than such Person and to
negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of Transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:

                                       101

<PAGE>

                      (A) Each Person holding or acquiring any Ownership
                  Interest in a Residual Certificate shall be a Permitted
                  Transferee and shall promptly notify the Trustee of any change
                  or impending change in its status as a Permitted Transferee.

                      (B) In connection with any proposed Transfer of any
                  Ownership Interest in a Residual Certificate, the Trustee
                  shall require delivery to it and shall not register the
                  Transfer of any Residual Certificate until its receipt of an
                  affidavit and agreement (a "Transfer Affidavit and
                  Agreement"), in the form attached hereto as Exhibit F-2 from
                  the proposed Transferee, in form and substance satisfactory to
                  the Trustee, representing and warranting, among other things,
                  that such Transferee is a Permitted Transferee, that it is not
                  acquiring its Ownership Interest in the Residual Certificate
                  that is the subject of the proposed Transfer as a nominee,
                  trustee or agent for any Person that is not a Permitted
                  Transferee, that for so long as it retains its Ownership
                  Interest in a Residual Certificate, it will endeavor to remain
                  a Permitted Transferee, and that it has reviewed the
                  provisions of this Section 5.02(d) and agrees to be bound by
                  them.

                      (C) Notwithstanding the delivery of a Transfer Affidavit
                  and Agreement by a proposed Transferee under clause (B) above,
                  if a Responsible Officer of the Trustee who is assigned to
                  this transaction has actual knowledge that the proposed
                  Transferee is not a Permitted Transferee, no Transfer of an
                  Ownership Interest in a Residual Certificate to such proposed
                  Transferee shall be effected.

                      (D) Each Person holding or acquiring any Ownership
                  Interest in a Residual Certificate shall agree (x) to require
                  a Transfer Affidavit and Agreement from any other Person to
                  whom such Person attempts to transfer its Ownership Interest
                  in a Residual Certificate and (y) not to transfer its
                  Ownership Interest unless it provides a Transferor Affidavit
                  (in the form attached hereto as Exhibit F-2), to the Trustee
                  stating that, among other things, it has no actual knowledge
                  that such other Person is not a Permitted Transferee.

                      (E) Each Person holding or acquiring an Ownership Interest
                  in a Residual Certificate, by purchasing an Ownership Interest
                  in such Certificate, agrees to give the Trustee written notice
                  that it is a "pass-through interest holder" within the meaning
                  of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A)
                  immediately upon acquiring an Ownership Interest in a Residual
                  Certificate, if it is, or is holding an Ownership Interest in
                  a Residual Certificate on behalf of, a "pass-through interest
                  holder."

           (ii) The Trustee will register the Transfer of any Residual
         Certificate only if it shall have received the Transfer Affidavit and
         Agreement and all of such other documents as shall have been reasonably
         required by the Trustee as a condition to such registration. In
         addition, no Transfer of a Residual Certificate shall be made unless
         the Trustee shall have received a representation letter from the
         Transferee of such Certificate to the effect that such Transferee is a
         Permitted Transferee.

                                       102

<PAGE>

          (iii) (A) If any purported Transferee shall become a Holder of a
         Residual Certificate in violation of the provisions of this Section
         5.02(d), then the last preceding Permitted Transferee shall be
         restored, to the extent permitted by law, to all rights as holder
         thereof retroactive to the date of registration of such Transfer of
         such Residual Certificate. The Trustee shall be under no liability to
         any Person for any registration of Transfer of a Residual Certificate
         that is in fact not permitted by this Section 5.02(d) or for making any
         payments due on such Certificate to the holder thereof or for taking
         any other action with respect to such holder under the provisions of
         this Agreement.

                  (B) If any purported Transferee shall become a holder of a
         Residual Certificate in violation of the restrictions in this Section
         5.02(d) and to the extent that the retroactive restoration of the
         rights of the holder of such Residual Certificate as described in
         clause (iii)(A) above shall be invalid, illegal or unenforceable, then
         the Trustee shall have the right, without notice to the holder or any
         prior holder of such Residual Certificate, to sell such Residual
         Certificate to a purchaser selected by the Trustee on such terms as the
         Trustee may choose. Such purported Transferee shall promptly endorse
         and deliver each Residual Certificate in accordance with the
         instructions of the Trustee. Such purchaser may be the Trustee itself
         or any Affiliate of the Trustee. The proceeds of such sale, net of the
         commissions (which may include commissions payable to the Trustee or
         its Affiliates), expenses and taxes due, if any, will be remitted by
         the Trustee to such purported Transferee. The terms and conditions of
         any sale under this clause (iii)(B) shall be determined in the sole
         discretion of the Trustee, and the Trustee shall not be liable to any
         Person having an Ownership Interest in a Residual Certificate as a
         result of its exercise of such discretion.

           (iv) The Trustee shall make available to the Internal Revenue Service
         and those Persons specified by the REMIC Provisions all information
         necessary to compute any tax imposed (A) as a result of the Transfer of
         an Ownership Interest in a Residual Certificate to any Person who is a
         Disqualified Organization, including the information described in
         Treasury regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with
         respect to the "excess inclusions" of such Residual Certificate and (B)
         as a result of any regulated investment company, real estate investment
         trust, common trust fund, partnership, trust, estate or organization
         described in Section 1381 of the Code that holds an Ownership Interest
         in a Residual Certificate having as among its record holders at any
         time any Person which is a Disqualified Organization. Reasonable
         compensation for providing such information may be accepted by the
         Trustee.

            (v) The provisions of this Section 5.02(d) set forth prior to this
         subsection (v) may be modified, added to or eliminated, provided that
         there shall have been delivered to the Trustee at the expense of the
         party seeking to modify, add to or eliminate any such provision the
         following:

                  (A) written notification from each Rating Agency to the effect
              that the modification, addition to or elimination of such
              provisions will not cause such Rating Agency to downgrade its
              then-current ratings of any Class of Certificates; and

                                       103

<PAGE>

                  (B) an Opinion of Counsel, in form and substance satisfactory
              to the Trustee, to the effect that such modification of, addition
              to or elimination of such provisions will not cause any of REMIC I
              or REMIC II to cease to qualify as a REMIC and will not cause any
              of REMIC I or REMIC II, as the case may be, to be subject to an
              entity-level tax caused by the Transfer of any Residual
              Certificate to a Person that is not a Permitted Transferee or (y)
              a Person other than the prospective transferee to be subject to a
              REMIC-tax caused by the Transfer of a Residual Certificate to a
              Person that is not a Permitted Transferee.

         The Trustee shall forward to the NIMS Insurer a copy of the items
         delivered to it pursuant to (A) and (B) above.

              (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.

              (f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute and cause the Certificate Registrar to
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.

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

              (h) All Certificates surrendered for transfer and exchange shall
be canceled and destroyed by the Certificate Registrar in accordance with its
customary procedures.

              (i) The Trustee will cause the Certificate Registrar (unless the
Trustee is acting as Certificate Registrar) to provide notice to the Trustee of
each transfer of a Certificate and to provide the Trustee with an updated copy
of the Certificate Register on the first Business Day in January and June of
each year, commencing in January 2002.

              (j) Any attempted or purported transfer of any Certificate in
violation of the provisions of Section 5.02(c) hereof shall be void ab initio
and such Certificate shall be considered to have been held continuously by the
prior permitted Holder.

                                       104

<PAGE>

              SECTION 5.03.   Mutilated, Destroyed, Lost or Stolen Certificates.

              If (i) any mutilated Certificate is surrendered to the Trustee or
the Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee, the NIMS Insurer and
the Certificate Registrar such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of actual knowledge by the
Trustee or the Certificate Registrar that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Certificate Registrar) connected therewith. Any
replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the applicable REMIC created
hereunder, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.

              SECTION 5.04.         Persons Deemed Owners.

              The Depositor, the Master Servicer, the Trustee, the NIMs Insurer,
the Certificate Registrar and any agent of any of them may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.01 and for all
other purposes whatsoever, and none of the Depositor, the Master Servicer, the
Trustee, the Certificate Registrar, the NIMS Insurer or any agent of any of them
shall be affected by notice to the contrary.

              SECTION 5.05.         Certain Available Information.

                      On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trustee ten copies of any private
placement memorandum or other disclosure document used by the Depositor in
connection with the offer and sale of the Class CE Certificates, Class P
Certificates or the Residual Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Trustee, the Depositor
promptly shall inform the Trustee of such event and shall deliver to the Trustee
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Trustee shall maintain at its Corporate
Trust Office and shall make available free of charge during normal business
hours for review by any Holder of a Certificate or any Person identified to the
Trustee as a prospective transferee of a Certificate, originals or copies of the
following items: (i) in the case of a Holder or prospective transferee of a
Class CE Certificate, a Class P Certificate or a Residual Certificate, the
private placement memorandum or other disclosure document relating to such
Certificates, if any, in the form most recently provided to the Trustee; and
(ii) in all cases, (A) this Agreement and any amendments hereof entered into
pursuant to Section 11.01, (B) all monthly statements required to be delivered
to Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class

                                       105

<PAGE>

pursuant to this Agreement since the Closing Date, (C) all certifications
delivered by a Responsible Officer of the Trustee since the Closing Date
pursuant to Section 10.01(h), (D) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date to evidence the
Master Servicer's determination that any P&I Advance or Servicing Advance was,
or if made, would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance, respectively, and (E) any and all Officers' Certificates delivered to
the Trustee by the Master Servicer since the Closing Date pursuant to Section
4.04(a). Copies and mailing of any and all of the foregoing items will be
available from the Trustee upon request at the expense of the person requesting
the same.

                                       106

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

                      SECTION 6.01.         Liability of the Depositor and the
                                            Master Servicer.

                      The Depositor and the Master Servicer each shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement and undertaken hereunder by the Depositor and the
Master Servicer herein.

                      SECTION 6.02.         Merger or Consolidation of the
                                            Depositor or the Master Servicer.

                      Subject to the following paragraph, the Depositor will
keep in full effect its existence, rights and franchises as a corporation under
the laws of the jurisdiction of its incorporation. Subject to the following
paragraph, the Master Servicer will keep in full effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and its qualification as an approved conventional seller/servicer
for Fannie Mae or Freddie Mac in good standing. The Depositor and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.

                      The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Fannie Mae or Freddie Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates and the Mezzanine Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
the Rating Agencies).

                  SECTION 6.03.         Limitation on Liability of the
                                        Depositor, the Master Servicer and
                                        Others.

                  None of the Depositor, the NIMs Insurer, the Master Servicer
or any of the directors, officers, employees or agents of the Depositor or the
Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the NIMs
Insurer, the Master Servicer or any such person against any breach of
warranties, representations or covenants made herein, or against any specific
liability imposed on the Master Servicer pursuant hereto, or against any
liability which

                                       107

<PAGE>

would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the NIMs Insurer, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer 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 Depositor, the NIMs Insurer, the Master Servicer and any
director, officer, employee or agent of the Depositor, the NIMs Insurer or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense relating to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor, the NIMs Insurer nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and, in its opinion,
does not involve it in any expense or liability; provided, however, that each of
the Depositor, the NIMs Insurer and the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of
Certificates entitled to at least 51% of the Voting Rights (which consent shall
not be necessary in the case of litigation or other legal action by either to
enforce their respective rights or defend themselves hereunder), the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor, the NIMs Insurer and the
Master Servicer shall be entitled to be reimbursed therefor from the Collection
Account as and to the extent provided in Section 3.11, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account.

                  SECTION 6.04.    Limitation on Resignation of the Master
                                   Servicer.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) with the
written consent of the Trustee, the NIMs Insurer and written confirmation from
each Rating Agency (which confirmation shall be furnished to the Depositor, the
NIMs Insurer and the Trustee) that such resignation will not cause such Rating
Agency to reduce the then current rating of the Class A Certificates or the
Mezzanine Certificates. Any such determination pursuant to clause (i) of the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the NIMs Insurer. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor servicer acceptable to the NIMS Insurer shall have assumed the Master
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.

                                       108

<PAGE>

                  Except as expressly provided herein, the Master Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract with, nor authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.

                  SECTION 6.05.         Rights of the Depositor in Respect of
                                        the Master Servicer.

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the
NIMs Insurer and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer (and any such
Sub-Servicer) in respect of the Master Servicer's rights and obligations
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor, the NIMs Insurer and the Trustee its
(and any such Sub-Servicer's) most recent financial statements and such other
information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor, the NIMs
Insurer and the Trustee shall not disseminate any information obtained pursuant
to the preceding two sentences without the Master Servicer's (or any such
Sub-Servicer's) written consent, except as required pursuant to this Agreement
or to the extent that it is appropriate to do so (i) in working with legal
counsel, auditors, taxing authorities or other governmental agencies, rating
agencies or reinsurers or (ii) pursuant to any law, rule, regulation, order,
judgment, writ, injunction or decree of any court or governmental authority
having jurisdiction over the Depositor, the Trustee or the Trust Fund, and in
either case, the Depositor, the NIMs Insurer or the Trustee, as the case may be,
shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Depositor may, but is not obligated to,
enforce the obligations of the Master Servicer under this Agreement and may, but
is not obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer under this Agreement or exercise the rights of
the Master Servicer under this Agreement; provided that the Master Servicer
shall not be relieved of any of its obligations under this Agreement by virtue
of such performance by the Depositor or its designee. The Depositor shall not
have any responsibility or liability for any action or failure to act by the
Master Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.

                                       109

<PAGE>

                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01.         Master Servicer Events of Default.

                  "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                    (i) any failure by the Master Servicer to remit to the
                  Trustee for distribution to the Certificateholders any payment
                  (other than a P&I Advance required to be made from its own
                  funds on any Master Servicer Remittance Date pursuant to
                  Section 4.03) required to be made under the terms of the
                  Certificates and this Agreement which continues unremedied for
                  a period of one Business Day after the date upon which written
                  notice of such failure, requiring the same to be remedied,
                  shall have been given to the Master Servicer by the Depositor
                  or the Trustee (in which case notice shall be provided by
                  telecopy), or to the Master Servicer, the Depositor and the
                  Trustee by the NIMs Insurer or the Holders of Certificates
                  entitled to at least 25% of the Voting Rights; or

                   (ii) any failure on the part of the Master Servicer duly to
                  observe or perform in any material respect any of the
                  covenants or agreements on the part of the Master Servicer
                  contained in the Certificates or in this Agreement (or, if the
                  Master Servicer is the Originator, the failure of the
                  Originator to repurchase a Mortgage Loan as to which a breach
                  has been established that requires a repurchase pursuant to
                  the terms of Section 7 of the Mortgage Loan Purchase
                  Agreement) which continues unremedied for a period of 45 days
                  after the earlier of (i) the date on which written notice of
                  such failure, requiring the same to be remedied, shall have
                  been given to the Master Servicer by the Depositor or the
                  Trustee, or to the Master Servicer, the Depositor and the
                  Trustee by the NIMs Insurer or the Holders of Certificates
                  entitled to at least 25% of the Voting Rights and (ii) actual
                  knowledge of such failure by a Servicing Officer of the Master
                  Servicer; or

                  (iii) a decree or order of a court or agency or supervisory
                  authority having jurisdiction in the premises in an
                  involuntary case under any present or future federal or state
                  bankruptcy, insolvency or similar law or the appointment of a
                  conservator or receiver or liquidator in any insolvency,
                  readjustment of debt, marshalling of assets and liabilities or
                  similar proceeding, or for the winding-up or liquidation of
                  its affairs, shall have been entered against the Master
                  Servicer and if such proceeding is being contested by the
                  Master Servicer in good faith, such decree or order shall have
                  remained in force undischarged or unstayed for a period of 60
                  days or results in the entry of an order for relief or any
                  such adjudication or appointment; or

                   (iv) the Master Servicer shall consent to the appointment of
                  a conservator or receiver or liquidator in any insolvency,
                  readjustment of debt, marshalling of assets

                                       110

<PAGE>

                  and liabilities or similar proceedings of or relating to the
                  Master Servicer or of or relating to all or substantially
                  all of its property; or

                    (v) the Master Servicer shall admit in writing its inability
                  to pay its debts generally as they become due, file a petition
                  to take advantage of any applicable insolvency or
                  reorganization statute, make an assignment for the benefit of
                  its creditors, or voluntarily suspend payment of its
                  obligations; or

                   (vi) any failure by the Master Servicer of the Master
                  Servicer Termination Test; or

                  (vii) any failure of the Master Servicer to make any P&I
                  Advance on any Master Servicer Remittance Date required to be
                  made from its own funds pursuant to Section 4.03 which
                  continues unremedied until 3:00 p.m. New York time on the
                  Business Day immediately following the Master Servicer
                  Remittance Date.

If a Master Servicer Event of Default described in clauses (i) through (vi) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor,
the NIMs Insurer or the Trustee may, and at the written direction of the Holders
of Certificates entitled to at least 51% of Voting Rights, then at the direction
of the NIMS Insurer the Trustee shall, by notice in writing to the the Master
Servicer, terminate all of the rights and obligations of the Master Servicer in
its capacity as Master Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. If a Master
Servicer Event of Default described in clause (vii) hereof shall occur, the
Trustee shall, by notice in writing to the Master Servicer and the Depositor,
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof. On or after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Certificates (other than as a Holder
of any Certificate) or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under this Section and, without
limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact
or otherwise, to execute and deliver on behalf of and at the expense of the
Master Servicer, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such

                                       111

<PAGE>

termination, whether in respect of P&I Advances or otherwise, and shall continue
to be entitled to the benefits of Section 6.03, notwithstanding any such
termination, with respect to events occurring prior to such termination). For
purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge
of a Master Servicer Event of Default unless a Responsible Officer of the
Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Event of Default is received by the Trustee and such
notice references the Certificates, REMIC I or this Agreement.

         The Trustee shall be entitled to be reimbursed by the Master Servicer
(or by the Trust Fund if the Master Servicer is unable to fulfill its
obligations hereunder) for all costs associated with the transfer of servicing
from the predecessor servicer, including without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) its obligation to deposit amounts in
respect of losses pursuant to Section 3.12) by the terms and provisions hereof
including, without limitation, the Master Servicer's obligations to make P&I
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make P&I Advances pursuant to Section 4.03; and provided further, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by Section 7.01 shall not be
considered a default by the Trustee as successor to the Master Servicer
hereunder; provided, however, it is understood and acknowledged by the parties
that there will be a period of transition (not to exceed 90 days) before the
servicing transfer is fully effected. As compensation therefor, effective from
and after the time the Master Servicer receives a notice of termination, the
Trustee shall be entitled to the Servicing Fee and all funds relating to the
Mortgage Loans to which the Master Servicer would have been entitled if it had
continued to act hereunder (other than amounts which were due or would become
due to the Master Servicer prior to its termination or resignation).
Notwithstanding the above and subject to the next paragraph, the Trustee may, if
it shall be unwilling to so act, or shall, if it is unable to so act or if it is
prohibited by law from making advances regarding delinquent mortgage loans, or
if the Holders of Certificates entitled to at least 51% of the Voting Rights or
the NIMS Insurer so request in writing to the Trustee, promptly appoint or
petition a court of competent jurisdiction to appoint, an established mortgage
loan servicing institution acceptable to each Rating Agency and the NIMs Insurer
and having a net worth of not less than $15,000,000 as the successor to the
Master Servicer under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement. No appointment of a successor to the Master Servicer under this
Agreement

                                       112

<PAGE>

shall be effective until the assumption by the successor of all of the Master
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.

                  Upon removal or resignation of the Master Servicer, the
Trustee, with the cooperation of the Depositor, (x) shall solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trustee, the successor Master Servicer and the Depositor; provided, however,
that no such fee shall exceed the Servicing Fee. Within thirty days after any
such public announcement, the Trustee, with the cooperation of the Depositor,
shall negotiate in good faith and effect the sale, transfer and assignment of
the servicing rights and responsibilities hereunder to the qualified party
submitting the highest satisfactory bid as to the price they will pay to obtain
such servicing. The Trustee upon receipt of the purchase price shall pay such
purchase price to the Master Servicer being so removed, after deducting from any
sum received by the Trustee from the successor to the Master Servicer in respect
of such sale, transfer and assignment all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing rights
and responsibilities reasonably incurred hereunder. After such deductions, the
remainder of such sum shall be paid by the Trustee to the Master Servicer at the
time of such sale.

                  (b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be expected
to be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced,
without interest, by withdrawing such amount from the Distribution Account;
however, nothing in this Agreement shall be deemed to affect the Trustee's
rights to recover from the Master Servicer's own funds interest on the amount of
any such advance. If the Trustee at any time makes an advance under this
Subsection which it later

                                       113

<PAGE>

determines in its good faith judgment will not be ultimately recoverable from
the Stayed Funds with respect to which such advance was made, the Trustee shall
be entitled to reimburse itself for such advance, without interest, by
withdrawing from the Distribution Account, out of amounts on deposit therein, an
amount equal to the portion of such advance attributable to the Stayed Funds.

                  SECTION 7.03.         Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders and the NIMs Insurer at their respective addresses
appearing in the Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to the NIMS Insurer and to all Holders
of Certificates notice of each such occurrence, unless such default or Master
Servicer Event of Default shall have been cured or waived.

                  SECTION 7.04.    Waiver of Master Servicer Events of Default.

                  The Holders representing at least 66% of the Voting Rights
(with the consent of the NIMs Insurer) evidenced by all Classes of Certificates
affected by any default or Master Servicer Event of Default hereunder may waive
such default or Master Servicer Event of Default; provided, however, that a
default or Master Servicer Event of Default under clause (i) or (vii) of Section
7.01 may be waived only by all of the Holders of the Regular Certificates (with
the consent of the NIMS Insurer). Upon any such waiver of a default or Master
Servicer Event of Default, such default or Master Servicer Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Master Servicer Event of Default or impair any right consequent thereon except
to the extent expressly so waived.

                                       114

<PAGE>

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01.         Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement. If any such
instrument is found not to conform on its face to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders and the NIMs Insurer.

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

                    (i) Prior to the occurrence of a Master Servicer Event of
                  Default, and after the curing of all such Master Servicer
                  Events of Default which may have occurred, the duties and
                  obligations of the Trustee shall be determined solely by the
                  express provisions of this Agreement, the Trustee shall 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 Trustee and, in the absence of bad faith
                  on the part of the Trustee, the Trustee may conclusively rely,
                  as to the truth of the statements and the correctness of the
                  opinions expressed therein, upon any certificates or opinions
                  furnished to the Trustee that conform to the requirements of
                  this Agreement;

                   (ii) The Trustee shall not be personally liable for an error
                  of judgment made in good faith by a Responsible Officer or
                  Responsible Officers of the Trustee, unless it shall be proved
                  that the Trustee was negligent in ascertaining the pertinent
                  facts; and

                  (iii) The Trustee shall not be personally liable with respect
                  to any action taken, suffered or omitted to be taken by it in
                  good faith in accordance with the direction of the NIMs
                  Insurer or the Holders of Certificates entitled to at least
                  25% of the Voting

                                       115

<PAGE>

                  Rights relating to the time, method and place of conducting
                  any proceeding for any remedy available to the Trustee, or
                  exercising any trust or power conferred upon the Trustee,
                  under this Agreement.

                  SECTION 8.02.         Certain Matters Affecting the Trustee.

                  (a) Except as otherwise provided in Section 8.01:

                    (i) The Trustee may request and rely upon and shall be
                  protected in acting or refraining from acting upon any
                  resolution, Officers' Certificate, certificate of auditors or
                  any other certificate, statement, instrument, opinion, report,
                  notice, request, consent, order, appraisal, bond or other
                  paper or document reasonably believed by it to be genuine and
                  to have been signed or presented by the proper party or
                  parties;

                   (ii) The Trustee may consult with counsel and any Opinion of
                  Counsel shall be full and complete authorization and
                  protection in respect of any action taken or suffered or
                  omitted by it hereunder in good faith and in accordance with
                  such Opinion of Counsel;

                  (iii) The Trustee shall be under no obligation to exercise any
                  of the trusts or powers vested in it by this Agreement or to
                  institute, conduct or defend any litigation hereunder or in
                  relation hereto at the request, order or direction of any of
                  the Certificateholders or the NIMs Insurer, pursuant to the
                  provisions of this Agreement, unless such Certificateholders
                  or the NIMs Insurer, as applicable, shall have offered to the
                  Trustee reasonable security or indemnity against the costs,
                  expenses and liabilities which may be incurred therein or
                  thereby; nothing contained herein shall, however, relieve the
                  Trustee of the obligation, upon the occurrence of a Master
                  Servicer Event of Default (which has not been cured or
                  waived), to exercise such of the rights and powers vested in
                  it by this Agreement, and to use the same degree of care and
                  skill in their exercise as a prudent person would exercise or
                  use under the circumstances in the conduct of such person's
                  own affairs;

                   (iv) The Trustee shall not be personally liable for any
                  action taken, suffered or omitted by it in good faith and
                  believed by it to be authorized or within the discretion or
                  rights or powers conferred upon it by this Agreement;

                    (v) Prior to the occurrence of a Master Servicer Event of
                  Default hereunder and after the curing of all Master Servicer
                  Events of Default which may have occurred, the Trustee shall
                  not be bound to make any investigation into the facts or
                  matters stated in any resolution, certificate, statement,
                  instrument, opinion, report, notice, request, consent, order,
                  approval, bond or other paper or document, unless requested in
                  writing to do so by the NIMs Insurer or the Holders of
                  Certificates entitled to at least 25% of the Voting Rights;
                  provided, however, that if the payment within a reasonable
                  time to the Trustee of the costs, expenses or liabilities
                  likely to be incurred by it in the making of such
                  investigation is, in the opinion of the Trustee, not

                                       116

<PAGE>

                  reasonably assured to the Trustee by such Certificateholders,
                  the Trustee may require reasonable indemnity against such
                  expense, or liability from such Certificateholders or the NIMs
                  Insurer as a condition to taking any such action;

                   (vi) The Trustee may execute any of the trusts or powers
                  hereunder or perform any duties hereunder either directly or
                  by or through agents or attorneys; and

                  (vii) The Trustee shall not be personally liable for any loss
                  resulting from the investment of funds held in the Collection
                  Account at the direction of the Master Servicer pursuant to
                  Section 3.12.

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

                  SECTION 8.03.         Trustee Not Liable for Certificates or
                                        Mortgage Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.12) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.12) or of the Certificates (other than the
signature of the Trustee and authentication of the Certificate Registrar on the
Certificates) or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
in accordance with Section 3.10.

                  SECTION 8.04.         Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

                  SECTION 8.05.         Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee and, to the extent
that the funds therein are at anytime insufficient for such purpose, the
Depositor shall pay such fees. The Trustee, or any director, officer, employee
or agent of the Trustee, shall be indemnified by REMIC I and held harmless
against any loss, liability or expense (not including expenses, disbursements
and advances incurred or made by the Trustee, including the compensation and the
expenses and disbursements of its agents and counsel, in the ordinary course of
the Trustee's performance in accordance with the provisions of

                                       117

<PAGE>

this Agreement) incurred by the Trustee in connection with any claim or legal
action or any pending or threatened claim or legal action arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement, other than any loss, liability or expense (i) resulting
from a breach of the Master Servicer's obligations and duties under this
Agreement, (ii) that constitutes a specific liability of the Trustee pursuant to
Section 10.01(c) or (iii) any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties hereunder
or as a result of a breach of the Trustee's obligations under Article X hereof.
Any amounts payable to the Trustee, or any director, officer, employee or agent
of the Trustee, in respect of the indemnification provided by this paragraph
(a), or pursuant to any other right of reimbursement from the Trust Fund that
the Trustee, or any director, officer, employee or agent of the Trustee, may
have hereunder in its capacity as such, may be withdrawn by the Trustee from the
Distribution Account at any time.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment hereunder made by the
Master Servicer to the Trustee shall be from the Master Servicer's own funds,
without reimbursement from the Trust Fund therefor.

                  (c) The Master Servicer shall pay any annual rating agency
fees of Moody's and S&P for ongoing surveillance from its own funds without
right of reimbursement.

                  SECTION 8.06.         Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Originator, the Master Servicer or
any Affiliate of the foregoing) organized and doing business under the laws of
any state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                  SECTION 8.07.         Resignation and Removal of the Trustee.

                  The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the NIMs
Insurer, the Master Servicer and the Certificateholders. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor trustee
acceptable to the NIMs Insurer by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. A copy of such

                                       118

<PAGE>

instrument shall be delivered to the Certificateholders and the Master Servicer
by the Depositor. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the NIMs Insurer, or if at any time
the Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor or the NIMs Insurer may remove the Trustee and
appoint a successor trustee acceptable to the NIMs Insurer by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights (or the NIMs Insurer upon failure of the Trustee to perform its
obligations hereunder) may at any time remove the Trustee and appoint a
successor trustee acceptable to the NIMs Insurer by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08.         Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the NIMs Insurer and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements, as well as all
moneys, held by it hereunder (other than any Mortgage Files at the time held by
a Custodian, which Custodian shall become the agent of any successor trustee
hereunder), and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section

                                       119

<PAGE>

8.06 and the appointment of such successor trustee shall not result in a
downgrading of any Class of Certificates by either Rating Agency, as evidenced
by a letter from each Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

                  SECTION 8.09.         Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee and the NIMs Insurer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of REMIC I, and to vest in such Person or Persons, in such capacity, such title
to REMIC I, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Master Servicer and the NIMs Insurer. If the Master Servicer and the NIMs
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the

                                       120

<PAGE>

holding of title to REMIC I or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Master Servicer and the NIMs Insurer.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                  SECTION 8.11.         Appointment of Custodians.

                  The Trustee may, with the consent of the Depositor and the
Master Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement (provided that if expenses of the kind that would
be reimbursable to the Trustee pursuant to Section 8.05 if incurred by the
Trustee are incurred by the Custodian, the Trustee shall be entitled to
reimbursement under Section 8.05 for such kind of expenses to the extent the
Trustee has paid such expenses on behalf of the Custodian or for which the
Trustee has reimbursed the Custodian). The Trustee initially appoints the
Custodian as Custodian, and the Depositor and the Master Servicer consent to
such appointment. Subject to Article VIII hereof, the Trustee agrees to comply
with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least $10,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 11.01. In no event shall
the appointment of any Custodian pursuant to a Custodial Agreement diminish the
obligations of the Trustee hereunder.

                  SECTION 8.12.         Appointment of Office or Agency.

                                       121

<PAGE>

                  The Trustee will designate an office in the City of New York
where the Certificates may be surrendered for registration of transfer or
exchange, and presented for final distribution, and where notices and demands to
or upon the Trustee in respect of the Certificates and this Agreement may be
delivered. As of the Closing Date, the Trustee designates its offices at 123
Washington Street, New York, New York 10006 for such purposes.

                  SECTION 8.13.   Representations and Warranties of the Trustee.

                  The Trustee hereby represents and warrants to the Master
Servicer and the Depositor, as of the Closing Date, that:

                  (i) The Trustee is a national banking association duly
         organized, validly existing and in good standing under the laws of the
         United States.

                  (ii)The execution and delivery of this Agreement by the
         Trustee, and the performance and compliance with the terms of this
         Agreement by the Trustee, will not violate the Trustee's charter or
         bylaws or constitute a default (or an event which, with notice or lapse
         of time, or both, would constitute a default) under, or result in the
         breach of, any material agreement or other instrument to which it is a
         party or which is applicable to it or any of its assets.

                  (iii) The Trustee has the full power and authority to enter
         into and consummate all transactions contemplated by this Agreement,
         has duly authorized the execution, delivery and performance of this
         Agreement, and has duly executed and delivered this Agreement.

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the Master Servicer and the Depositor, constitutes a valid,
         legal and binding obligation of the Trustee, enforceable against the
         Trustee in accordance with the terms hereof, subject to (A) applicable
         bankruptcy, insolvency, receivership, reorganization, moratorium and
         other laws affecting the enforcement of creditors' rights generally,
         and (B) general principles of equity, regardless of whether such
         enforcement is considered in a proceeding in equity or at law.

                  (v) The Trustee is not in violation of, and its execution and
         delivery of this Agreement and its performance and compliance with the
         terms of this Agreement will not constitute a violation of, any law,
         any order or decree of any court or arbiter, or any order, regulation
         or demand of any federal, state or local governmental or regulatory
         authority, which violation, in the Trustee's good faith and reasonable
         judgment, is likely to affect materially and adversely either the
         ability of the Trustee to perform its obligations under this Agreement
         or the financial condition of the Trustee.

                  (vi) No litigation is pending or, to the best of the Trustee's
         knowledge, threatened against the Trustee which would prohibit the
         Trustee from entering into this Agreement or, in the Trustee's good
         faith reasonable judgment, is likely to materially and adversely affect
         either the ability of the Trustee to perform its obligations under this
         Agreement or the financial condition of the Trustee.

                                       122

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01          Termination Upon Repurchase or
                                        Liquidation of All Mortgage Loans.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments in respect of the REMIC I Regular Interests, the REMIC
II Regular Interests or the Classes of Certificates as hereinafter set forth)
shall terminate upon payment to the Certificateholders and the deposit of all
amounts held by or on behalf of the Trustee and required hereunder to be so paid
or deposited on the Distribution Date coinciding with or following the earlier
to occur of (i) the purchase by the Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to the greater of (A) the aggregate Purchase Price of all the
Mortgage Loans included in REMIC I, plus the appraised value of each REO
Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Terminator and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Terminator and the Trustee, as of the
close of business on the third Business Day next preceding the date upon which
notice of any such termination is furnished to Certificateholders pursuant to
the third paragraph of this Section 9.01).

                  (b) The Master Servicer (or if the Master Servicer Fails to
exercise such right, the NIMs Insurer, provided such NIMs Insurer is not an
affiliate of the Depositor) shall have the right (the party exercising such
right, the "Terminator"), to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I pursuant to clause (i) of the preceding paragraph
no later than the Determination Date in the month immediately preceding the
Distribution Date on which the Certificates will be retired; provided, however,
that the Terminator may elect to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I pursuant to clause (i) above only (A) if the
aggregate Stated Principal Balance of the Mortgage Loans and each REO Property
remaining in the Trust Fund at the time of such election is less than 10% of the
sum of the aggregate Stated Principal Balance of the Initial Mortgage Loans as
of the Cut-off Date and the Original Pre- Funded Amount and (B) if the
Terminator is the Master Servicer and is an affiliate of the Originator, the
Master Servicer shall have delivered to the Trustee and the NIMS Insurer a
written certification that the burdens of servicing the Mortgage Loans and REO
Properties remaining in REMIC I exceed the benefits of the Servicing Fees that
would be realized by the Master Servicer if it continued to service such assets
on behalf of the Trust Fund. By acceptance of the Residual Certificates, the
Holders of the Residual Certificates agree, in connection with any termination
hereunder, to assign

                                       123

<PAGE>

and transfer any amounts in excess of par, and to the extent received in respect
of such termination, to pay any such amounts to the Holders of the Class CE
Certificates.

                  (c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment in respect of the REMIC I Regular Interests, the
REMIC II Regular Interests and the Certificates will be made upon presentation
and surrender of the related Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests, the REMIC II Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee therein designated. The Trustee shall give such notice to the
Certificate Registrar at the time such notice is given to Certificateholders. In
the event such notice is given in connection with the purchase of all of the
Mortgage Loans and each REO Property remaining in REMIC I by the Terminator, the
Terminator shall deliver to the Trustee for deposit in the Distribution Account
not later than the last Business Day of the month next preceding the month of
the final distribution on the Certificates an amount in immediately available
funds equal to the above-described purchase price. Upon certification to the
Trustee by a Servicing Officer of the making of such final deposit, the Trustee
shall promptly release or cause to be released to the Terminator the Mortgage
Files for the remaining Mortgage Loans, and the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Salomon Smith Barney
Inc. all such amounts, and all rights of non-tendering Certificateholders in or
to such amounts shall thereupon cease. No interest shall accrue or be payable to
any Certificateholder on

                                       124

<PAGE>

any amount held in trust by the Trustee as a result of such Certificateholder's
failure to surrender its Certificate(s) for final payment thereof in accordance
with this Section 9.01.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.

                  SECTION 9.02          Additional Termination Requirements.

                  (a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:

                    (i) The Trustee shall specify the first day in the 90-day
                  liquidation period in a statement attached to REMIC I's and
                  REMIC II's final Tax Return pursuant to Treasury regulation
                  Section 1.860F-1 and shall satisfy all requirements of a
                  qualified liquidation under Section 860F of the Code and any
                  regulations thereunder, as evidenced by an Opinion of Counsel
                  obtained at the expense of the Terminator;

                   (ii) During such 90-day liquidation period, and at or prior
                  to the time of making of the final payment on the
                  Certificates, the Trustee shall sell all of the assets of
                  REMIC I to the Terminator for cash; and

                  (iii) At the time of the making of the final payment on the
                  Certificates, the Trustee shall distribute or credit, or cause
                  to be distributed or credited, to the Holders of the Residual
                  Certificates all cash on hand in the Trust Fund (other than
                  cash retained to meet claims), and the Trust Fund shall
                  terminate at that time.

                  (b) At the expense of the applicable Terminator (or in the
event of termination under Section 9.01(a)(ii), at the expense of the Trustee),
the Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each of REMIC I and
REMIC II pursuant to this Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each of REMIC I and REMIC II which authorization shall be binding upon all
successor Certificateholders.

                                       125

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01.        REMIC Administration.

                  (a) The Trustee shall elect to treat each of REMIC I and REMIC
II as a REMIC under the Code and, if necessary, under applicable state law. Each
such election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of the REMIC election in respect of REMIC I, the REMIC I Regular
Interests shall be designated as the Regular Interests in REMIC I and the Class
R-I Interests shall be designated as the Residual Interests in REMIC I. The
Class A Certificates, the Mezzanine Certificates, the Class CE Certificates and
the Class P Certificates shall be designated as the Regular Interests in REMIC
II and the Class R-II Interests shall be designated as the Residual Interests in
REMIC II. The Trustee shall not permit the creation of any "interests" in REMIC
I or REMIC II (within the meaning of Section 860G of the Code) other than the
REMIC I Regular Interests, the REMIC II Regular Interests and the interests
represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of REMIC I and REMIC II within the meaning of Section 860G(a)(9) of the Code.

                  (c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to any of REMIC I or REMIC
II that involve the Internal Revenue Service or state tax authorities), other
than the expense of obtaining any tax related Opinion of Counsel except as
specified herein. The Trustee, as agent for all of REMIC I's and REMIC II's tax
matters person, shall (i) act on behalf of the Trust Fund in relation to any tax
matter or controversy involving any of REMIC I or REMIC II and (ii) represent
the Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as is in its possession and reasonably required by the Trustee to
enable it to perform its obligations under this Article.

                                       126

<PAGE>

                  (e) The Trustee shall perform on behalf of each of REMIC I and
REMIC II all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of REMIC I and REMIC II. The
Master Servicer shall provide on a timely basis to the Trustee such information
with respect to the assets of the Trust Fund, including, without limitation, the
Mortgage Loans, as is in its possession and reasonably required by the Trustee
to enable it to perform its obligations under this subsection. In addition, the
Depositor shall provide or cause to be provided to the Trustee, within ten (10)
days after the Closing Date, all information or data that the Trustee reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

                  (f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of REMIC I or REMIC II as a REMIC or (ii) result in the imposition of a
tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee and the NIMs Insurer have
received an Opinion of Counsel, addressed to the Trustee (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee)
to the effect that the contemplated action will not, with respect to any of
REMIC I or REMIC II, endanger such status or result in the imposition of such a
tax, nor shall the Master Servicer take or fail to take any action (whether or
not authorized hereunder) as to which the Trustee and the NIMs Insurer has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event could occur with respect to such action. In
addition, prior to taking any action with respect to REMIC I or REMIC II or the
respective assets of each, or causing REMIC I or REMIC II to take any action,
which is not contemplated under the terms of this Agreement, the Master Servicer
will consult with the Trustee, the NIMs Insurer or its designee, in writing,
with respect to whether such action could cause an Adverse REMIC Event to occur
with respect to REMIC I or REMIC II, and the Master Servicer shall not take any
such action or cause either REMIC I or REMIC II to take any such action as to
which the Trustee or the NIMs Insurer has advised it in writing that an Adverse
REMIC Event could occur. The Trustee or the NIMs Insurer may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee. At all times as may be
required by the Code, the Trustee will ensure that substantially all of the
assets of

                                       127

<PAGE>

both REMIC I and REMIC II will consist of "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.

                  (h) On or before April 15 of each calendar year, commencing
April 15, 2002, the Trustee shall deliver to the Master Servicer, the NIMs
Insurer and each Rating Agency a Certificate from a Responsible Officer of the
Trustee stating, without regard to any action taken by any party other than the
Trustee, the Trustee's compliance with this Article X.

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each of REMIC I and REMIC II on a
calendar year and on an accrual basis. The Trustee will apply for an Employer
Identification Number for the Trust from the Internal Revenue Service via a Form
SS-4 or such other form as is appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any of REMIC I or REMIC II other than in
connection with any Qualified Substitute Mortgage Loan delivered in accordance
with Section 2.03 unless it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund will not cause the
related REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding or subject such REMIC to any tax under the REMIC Provisions or
other applicable provisions of federal, state and local law or ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which REMIC I or REMIC II will receive a fee or other
compensation for services nor permit any such REMIC to receive any income from
assets other than "qualified mortgages" as defined in Section 860G(a)(3) of the
Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.

                  SECTION 10.02.        Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets

                                       128

<PAGE>

for any of REMIC I or REMIC II (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Collection Account or the Distribution Account for gain, nor accept any
contributions to any of REMIC I or REMIC II after the Closing Date (other than a
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03),
unless it has received an Opinion of Counsel, addressed to the Trustee and the
NIMs Insurer (at the expense of the party seeking to cause such sale,
disposition, substitution, acquisition or contribution but in no event at the
expense of the Trustee) that such sale, disposition, substitution, acquisition
or contribution will not (a) affect adversely the status of any of REMIC I or
REMIC II as a REMIC or (b) cause any of REMIC I or REMIC II to be subject to a
tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.

                  SECTION 10.03.   Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the NIMs
Insurer, the Depositor and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, caused solely
by the Trustee's failure to act in accordance with its standard of care set
forth in this Article X.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the NIMs Insurer, the Depositor and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor or the Trustee, as a result of a
breach of the Master Servicer's covenants set forth in Article III or this
Article X.

                                       129

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01.        Amendment.

                   This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Trustee and, if
applicable, the Custodian with the consent of the NIMs Insurer and without the
consent of any of the Certificateholders, (i) to cure any ambiguity or defect,
(ii) to correct, modify or supplement any provisions herein (including to give
effect to the expectations of Certificateholders), or in any Custodial
Agreement, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or in any Custodial Agreement which shall
not be inconsistent with the provisions of this Agreement or such Custodial
Agreement, provided that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Trustee, adversely affect in any material respect the
interests of any Certificateholder. No amendment shall be deemed to adversely
affect in any material respect the interests of any Certificateholder who shall
have consented thereto, and no Opinion of Counsel shall be required to address
the effect of any such amendment on any such consenting Certificateholder.

                   This Agreement or any Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer, the NIMs Insurer and
the Trustee with the consent of the NIMs Insurer and the Holders of Certificates
entitled to at least 66% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Depositor or the Master Servicer or any Affiliate thereof shall be entitled
to Voting Rights with respect to matters affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the NIMs Insurer shall consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel satisfactory
to the NIMs Insurer to the effect that such amendment will not result in the
imposition of any tax on any of REMIC I or REMIC II pursuant to the REMIC
Provisions or cause any of REMIC I or REMIC II to fail to qualify as a REMIC at
any time that any Certificates are outstanding.

                  Notwithstanding any of the other provisions of this Section
11.01, none of the Depositor, the Master Servicer or the Trustee shall enter
into any amendment of this Agreement that would significantly change the
permitted activities of the Trust Fund without the consent of the

                                       130

<PAGE>

NIMS Insurer and the holders of Certificates that represent more than 50.00% of
the aggregate Certificate Principal Balance of all Certificates held by parties
that are not affiliates of the Originator.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION 11.02.        Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 11.03. Limitation on Rights of Certificateholders.

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

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as

                                       131

<PAGE>

partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 11.04.        Governing Law.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.

                  SECTION 11.05.        Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service, facsimile, electronic mail or delivered in any other manner
specified herein, to (a) in the case of the Depositor, 1100 Town & Country Road,
Suite 1100, Orange, California 92868, Attention: Capital Markets (telecopy
number (714) 245-0198), or such other address or telecopy number as may
hereafter be furnished to the Master Servicer, the NIMs Insurer and the Trustee
in writing by the Depositor, (b) in the case of the Master Servicer, 1100 Town &
Country Road, 11th Floor, Orange, California 92868, Attention: General Counsel
(telecopy number: (714) 564-9639), or such other address or telecopy number as
may hereafter be furnished to the Trustee, the NIMs Insurer and the Depositor in
writing by the Master Servicer, (c) in the case of the Trustee, Bankers Trust
Company of California, N.A., 1761 East St. Andrew Place, Santa Ana, CA
92705-4934, Attention: Trust Administration-AQ0101 (telecopy number: (714)
247-6009), or such other address or telecopy number as may hereafter be
furnished to the Master Servicer, the NIMs Insurer and the Depositor in writing
by the Trustee and (d) in the case of the NIMs Insurer, (i) Radian Insurance
Inc., 1601 Market Street, Philadelphia, Pennsylvania 19103, Attention: General

                                       132

<PAGE>

Counsel and (ii) Financial Security Assurance, Inc. 350 Park Avenue, New York,
New York 10022, Attn: Transaction Oversight, or such other address or telecopy
number as may hereafter be furnished to the Depositor, the Master Servicer and
the Trustee in writing by the NIMs Insurer. Any notice required or permitted to
be given to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.

                  SECTION 11.06.        Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION 11.07. Notice to Rating Agencies and the NIMs Insurer.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies and the NIMs Insurer with respect to each of the
following of which it has actual knowledge:

<TABLE>
<CAPTION>
<S>               <C>
                  1.  Any material change or amendment to this Agreement;

                  2.  The occurrence of any Master Servicer Event of Default that has not been cured
                      or waived;

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

                  4.  The repurchase or substitution of Mortgage Loans pursuant to or as contemplated
                      by Section 2.03;

                  5.  The final payment to the Holders of any Class of Certificates;

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

                  7.  Any event that would result in the inability of the Trustee, were it to succeed as
                      Master Servicer, to make advances regarding delinquent Mortgage Loans; and

                  8.  The filing of any claim under the Master Servicer's blanket bond and errors and
                      omissions insurance policy required by Section 3.14 or the cancellation or material
                      modification of coverage under any such instrument.
</TABLE>

                                       133

<PAGE>

                  In addition, the Trustee shall promptly furnish to each Rating
Agency and the NIMS Insurer copies of each report to Certificateholders
described in Section 4.02 and the Master Servicer, as required pursuant to
Section 3.20 and Section 3.21, shall promptly furnish to each Rating Agency
copies of the following:

                    1.   Each annual statement as to compliance described in
                         Section 3.20; and

                    2.   Each annual independent public accountants' servicing
                         report described in Section 3.21.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Moody's Investors Service, 99 Church Street, New York, New York 10007 and to
Standard & Poor's, a division of the McGraw-Hill Companies, Inc., 25 Broadway,
New York, New York 10004, or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.

                  SECTION 11.08.        Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09.        Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor or the Originator. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor or the Originator, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor
or the Originator and (b)(1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Originator and the Depositor to the Trustee of a security interest in all of
the Originator's and the Depositor's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account and the
Distribution Account, whether in the form of cash, instruments, securities or
other property; (3) the obligations secured by such security agreement shall be
deemed to be all of the Depositor's obligations under this Agreement, including
the obligation to provide to the Certificateholders the benefits of this
Agreement relating to the Mortgage Loans and the Trust Fund; and (4)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial

                                       134

<PAGE>

intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee a security interest in the Mortgage Loans
and all other property described in clause (2) of the preceding sentence, for
the purpose of securing to the Trustee the performance by the Depositor of the
obliga tions described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
and the transfer pursuant to the Mortgage Loan Purchase Agreement to be a true,
absolute and unconditional sale of the Mortgage Loans and assets constituting
the Trust Fund by the Depositor to the Trustee.

                  SECTION 11.10         Third Party Rights.

                  The NIMs Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.

                  SECTION 11.11         NIMS Insurer's Rights.

                  Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the NIMs Insurer hereunder (i) shall not be operable
whenever an Insurer Default or an Insurer Insolvency Event and a Backup Insurer
Default (as defined in the Indenture) shall have occurred and be continuing and
(ii) except in the case of any right to indemnification hereunder shall
permanently cease to be operable upon the later to occur of (A) the payment in
full of the NIM Notes as provided in the Indenture and (B) the payment in full
to the NIMs Insurer of any amounts owed to the NIMs Insurer as provided in the
Indenture.

                                       135

<PAGE>

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

                                        AMERIQUEST MORTGAGE SECURITIES
                                        INC.,
                                        as Depositor

                                        By: /s/ John P. Grazer
                                        -------------------------------------
                                        Name:   John P. Grazer
                                        Title:  CFO

                                        AMERIQUEST MORTGAGE COMPANY,
                                        as Master Servicer

                                        By: /s/ John P. Grazer
                                        -------------------------------------
                                        Name:   John P. Grazer
                                        Title:  CFO/EVP

                                        BANKERS TRUST COMPANY OF
                                        CALIFONIA,  N.A.
                                        as Trustee

                                        By: /s/ Ronaldo Reyes
                                        -------------------------------------
                                        Name:   Ronaldo Reyes
                                        Title:  Associate

                                       136

<PAGE>

STATE OF CALIFORNIA       )
                          ) ss.:
COUNTY OF ORANGE          )

                  On the 21st day of June, 2001, before me, a notary public
in and for said State, personally appeared John P. Grazer, known to me to be a
CFO of Ameriquest Mortgage Securities Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                              /s/ Evelyn Garcia
                              ------------------------------
                                  Notary Public

[Notarial Seal]

                                       137

<PAGE>

STATE OF CALIFORNIA        )
                           ) ss.:
COUNTY OF ORANGE           )

                  On the 21st day of June, 2001, before me, a notary public
in and for said State, personally appeared John P. Grazer, known to me to be a
CFO of Ameriquest Mortgage Company, one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

                              /s/ Evelyn Garcia
                              ------------------------------
                                  Notary Public

[Notarial Seal]

                                       138

<PAGE>

STATE OF CALIFORNIA             )
                                ) ss.:
COUNTY OF                       )

                  On the 21st day of June 2001, before me, a notary public in
and for said State, personally appeared Ronaldo Reyes, known to me to be an
Associate of Bankers Trust Company of California, N.A., one of the
entities 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 entity executed the within instrument.

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

                              /s/ Evelyn Garcia
                              ------------------------------
                                  Notary Public

[Notarial Seal]

                                       139

<PAGE>

                                   EXHIBIT A-1

                           FORM OF CLASS A CERTIFICATE

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

<TABLE>
<CAPTION>

<S>                                             <C>
Series 2001-1, Class A                          Aggregate Certificate Principal Balance of the
                                                Class A Certificates as of the Issue Date:
Pass-Through Rate: Variable                     $_____________

Date of Pooling and Servicing Agreement and     Denomination:  $_____________
Cut-off Date: June __, 2001
                                                Master Servicer:
First Distribution Date:                        Ameriquest Mortgage Company
July __, 2001
                                                Trustee:  Bankers Trust Company
No. ___                                         of California, N.A.

                                                Issue Date: June __, 2001

                                                CUSIP:

</TABLE>

    DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
    CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
    OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
    LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
    CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

    THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
    AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
    OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
    UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
    INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class A Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

<PAGE>

                                       -3-

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
____%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One-Month LIBOR plus ____% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

<PAGE>

                                       -4-

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: June __, 2001

                                   BANKERS TRUST COMPANY
                                   OF CALIFORNIA, N.A.
                                   as Trustee

                                   By:
                                      -----------------------------------
                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                     BANKERS TRUST COMPANY
                                     OF CALIFORNIA, N.A.
                                     as Certificate Registrar

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

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>      <C>                                         <C>
         TEN COM - as tenants in common              UNIF GIFT MIN ACT -            CUSTODIAN
                                                                                _________________
                                                                                (Cust)  (Minor)
         TEN ENT  - as tenants by the entireties                                under Uniform Gifts
                                                                                to Minors Act
         JT TEN     - as joint tenants with right                               _________________
                       if survivorship and not as                                    (State)
                       tenants in common
</TABLE>

                      Additional abbreviations may also be used though not in
the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto  ----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address: -------------------------
-------------------------------------------------------------------------------.

Dated:

                                   -------------------------------------
                                   Signature by or on behalf of assignor

                                   -------------------------------------
                                   Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS M-1 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A
         CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING
         AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE
         MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
<TABLE>
<CAPTION>

<S>                                             <C>
Series 2001-1, Class M-1                        Aggregate Certificate Principal Balance of
                                                the Class M-1 Certificates as of the Issue
Pass-Through Rate: Variable                     Date:  $____________

Date of Pooling and Servicing Agreement         Denomination:  $_____________
and Cut-off Date: June 1, 2001
                                                Master Servicer:
First Distribution Date:                        Ameriquest Mortgage Company
July 15, 2001
                                                Trustee:  Bankers Trust Company
No. ___                                         of California, N.A.

                                                Issue Date: June __, 2001

                                                CUSIP:

</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

<PAGE>

FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-1 Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

-3-

such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
____%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One-Month LIBOR plus ____% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in

<PAGE>

                                      -4-

authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any person using Plan Assets to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: June __, 2001

                                   BANKERS TRUST COMPANY
                                   OF CALIFORNIA, N.A.
                                   as Trustee

                                   By:
                                      ----------------------------------------
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.

                                   BANKERS TRUST COMPANY
                                   OF CALIFORNIA, N.A.
                                   as Certificate Registrar

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

<PAGE>

                                                   ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>      <C>                                         <C>
         TEN COM - as tenants in common              UNIF GIFT MIN ACT -            CUSTODIAN
                                                                                ------------------
                                                                                (Cust)  (Minor)
         TEN ENT  - as tenants by the entireties                                under Uniform Gifts
                                                                                to Minors Act
         JT TEN     - as joint tenants with right                      _________________
                       if survivorship and not as                             (State)
                       tenants in common
</TABLE>

                      Additional abbreviations may also be used though not in
the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto  ----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address: -------------------------
-------------------------------------------------------------------------------.

Dated:

                                   -------------------------------------
                                   Signature by or on behalf of assignor

                                   -------------------------------------
                                   Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3

                          FORM OF CLASS M-2 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
         CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
         HEREIN.
<TABLE>
<CAPTION>

<S>                                            <C>
Series 2001-1, Class M-2                       Aggregate Certificate Principal Balance of
                                               the Class M-2 Certificates as of the Issue
Pass-Through Rate: Variable                    Date:  $_____________

Date of Pooling and Servicing Agreement        Denomination:  $_____________
and Cut-off Date: June 1, 2001
                                               Master Servicer:
First Distribution Date:                       Ameriquest Mortgage Company
July 15, 2001
                                               Trustee:  Bankers Trust Company
No. ___                                        of California, N.A.

                                               Issue Date: June __, 2001

                                               CUSIP:

</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class M-2 Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                       -3-

such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) the One-Month LIBOR plus
____%, in the case of each Distribution Date through and including the
Distribution Date on which the aggregate principal balance of the Mortgage Loans
(and properties acquired in respect thereof) remaining in the Trust Fund is
reduced to less than 10% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, or One-Month LIBOR plus _____% per annum, in the
case of any Distribution Date thereafter, and (ii) the Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

<PAGE>

                                       -4-

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any person using Plan Assets to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                  The Depositor, the Master Servicer, the Trustee, and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: June __, 2001

                                     BANKERS TRUST COMPANY
                                     OF CALIFORNIA, N.A.
                                     as Trustee

                                     By:
                                        --------------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.

                                    BANKERS TRUST COMPANY
                                    OF CALIFORNIA, N.A.
                                    as Certificate Registrar

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

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>                                                  <C>
         TEN COM - as tenants in common              UNIF GIFT MIN ACT -            CUSTODIAN
                                                                                ------------------
                                                                                (Cust)  (Minor)
         TEN ENT  - as tenants by the entireties                                under Uniform Gifts
                                                                                to Minors Act
         JT TEN     - as joint tenants with right                      _________________
                       if survivorship and not as                             (State)
                       tenants in common
</TABLE>

                      Additional abbreviations may also be used though not in
the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto  ----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address: -------------------------
-------------------------------------------------------------------------------.

Dated:

                                   -------------------------------------
                                   Signature by or on behalf of assignor

                                   -------------------------------------
                                   Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-4

                          FORM OF CLASS CE CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
         MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

<TABLE>
<CAPTION>

<S>                                            <C>
Series 2001-1, Class CE                        Aggregate Notional Amount of the Class CE
                                               Certificates as of the Issue Date:
Pass-Through Rate: Variable                    $_____________

Date of Pooling and Servicing Agreement        Notional Amount: $_____________
and Cut-off Date:  June 1, 2001

First Distribution Date:                       Aggregate Certificate Principal Balance of
July 15, 2001                                  the Class CE Certificates as of the Issue
                                               Date:  $____________
No. ___
                                               Denomination:  $_____________

                                               Master Servicer:
                                               Ameriquest Mortgage Company

                                               Trustee:  Bankers Trust Company
                                               of California, N.A.

                                               Issue Date: June __, 2001

</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class CE Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class CE Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class CE Certificates, or otherwise by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of

<PAGE>

                                       -4-

such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                       -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. Neither the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not

<PAGE>

                                       -6-

require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement .

<PAGE>

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

Dated: June __, 2001

                                    BANKERS TRUST COMPANY
                                    OF CALIFORNIA, N.A.
                                    as Trustee

                                    By:
                                       -------------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.

                                    BANKERS TRUST COMPANY
                                    OF CALIFORNIA, N.A.
                                    as Certificate Registrar

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

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>      <C>                                         <C>
         TEN COM - as tenants in common              UNIF GIFT MIN ACT -            CUSTODIAN
                                                                                _________________
                                                                                (Cust)  (Minor)
         TEN ENT  - as tenants by the entireties                                under Uniform Gifts
                                                                                to Minors Act
         JT TEN     - as joint tenants with right                      _________________
                       if survivorship and not as                             (State)
                       tenants in common
</TABLE>

                      Additional abbreviations may also be used though not in
the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto  ----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address: -------------------------
-------------------------------------------------------------------------------.

Dated:

                                   -------------------------------------
                                   Signature by or on behalf of assignor

                                   -------------------------------------
                                   Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-5

                           FORM OF CLASS P CERTIFICATE

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

<PAGE>

<TABLE>
<CAPTION>

<S>                                             <C>
Series 2001-1, Class P                          Aggregate Certificate Principal Balance of
                                                the Class P Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement         $100.00
and Cut-off Date: June 1, 2001
                                                Denomination:  $_____________
First Distribution Date:
July 15, 2001                                   Master Servicer:
                                                Ameriquest Mortgage Company
No. ___
                                                Trustee:  Bankers Trust Company
                                                of California, N.A.

                                                Issue Date: June __, 2001

</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class P Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class P Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class P Certificates, or otherwise by check
mailed by first class mail to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of

<PAGE>

                                       -4-

such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                       -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their respective capacities as such), together
with copies of the written certification(s) of the Holder of the Certificate
desiring to effect the transfer and/or such Holder's prospective transferee upon
which such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I, and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not

<PAGE>

                                       -6-

require, the party designated in the Agreement to purchase from REMIC I all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement .

<PAGE>

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

Dated: June __, 2001

                                    BANKERS TRUST COMPANY
                                    OF CALIFORNIA, N.A.
                                    as Trustee

                                    By:
                                       --------------------------------------
                                             Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                    BANKERS TRUST COMPANY
                                    OF CALIFORNIA, N.A.
                                    as Certificate Registrar

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

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<CAPTION>

<S>      <C>                                         <C>
         TEN COM - as tenants in common              UNIF GIFT MIN ACT -            CUSTODIAN
                                                                                _________________
                                                                                (Cust)  (Minor)
         TEN ENT  - as tenants by the entireties                                under Uniform Gifts
                                                                                to Minors Act
         JT TEN     - as joint tenants with right                      _________________
                       if survivorship and not as                             (State)
                       tenants in common
</TABLE>

                      Additional abbreviations may also be used though not in
the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto  ----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address: -------------------------
-------------------------------------------------------------------------------.

Dated:

                                   -------------------------------------
                                   Signature by or on behalf of assignor

                                   -------------------------------------
                                   Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-6

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED STATES
         PERSON.

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
         DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
         FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
         IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH

<PAGE>

                                      -11-

         PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
         HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN
         AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
         TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
         SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
         REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
         DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
         AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
         TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
         BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
         CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL
         BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
         PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
         REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
         PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>

<S>                                          <C>
Series 2001-1, Class R                       Aggregate Certificate Principal Balance of
                                             the Class R Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement      100.00% Percentage Interest
and Cut-off Date: June 1, 2001
                                             Denomination:  100.00% Percentage Interest
First Distribution Date: July 15, 2001
                                             Master Servicer:
No. ___                                      Ameriquest Mortgage Company

                                             Trustee:  Bankers Trust Company
                                             of California, N.A.

                                             Issue Date: June __, 2001

</TABLE>

<PAGE>

                 FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE TRUSTEE
         OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC I and REMIC II created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two- thirds of the aggregate initial
Certificate Principal Balance of the Class R Certificates, or otherwise by check
mailed by first class mail to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of

<PAGE>

                                       -4-

such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Floating Rate Mortgage Pass-Through Certificates of
the Series specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

<PAGE>

                                       -5-

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this

<PAGE>

                                       -6-

Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the REMIC.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and REMIC II, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from REMIC I and REMIC II of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I and REMIC II all the
Mortgage Loans and all property acquired in respect of any Mortgage Loan at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Loans at the
time of purchase being less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

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

Dated: June __, 2001

                                    BANKERS TRUST COMPANY
                                    OF CALIFORNIA, N.A.
                                    as Trustee

                                    By:
                                       -------------------------------------
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                     BANKERS TRUST COMPANY
                                     OF CALIFORNIA, N.A.
                                     as Certificate Registrar

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

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>      <C>                                         <C>
         TEN COM - as tenants in common              UNIF GIFT MIN ACT -            CUSTODIAN
                                                                                _________________
                                                                                (Cust)  (Minor)
         TEN ENT  - as tenants by the entireties                                under Uniform Gifts
                                                                                to Minors Act
         JT TEN     - as joint tenants with right                      _________________
                       if survivorship and not as                             (State)
                       tenants in common
</TABLE>

                      Additional abbreviations may also be used though not in
the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto  ----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Floating Rate
Mortgage Pass- Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address: -------------------------
-------------------------------------------------------------------------------.

Dated:

                                   -------------------------------------
                                   Signature by or on behalf of assignor

                                   -------------------------------------
                                   Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number______________
or, if mailed by check, to _____________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-7

                                   [RESERVED]

<PAGE>

                                    EXHIBIT B

                                   [RESERVED]

<PAGE>

                                   EXHIBIT C-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                              [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California  92868

         Re:  Pooling and Servicing Agreement, dated as of June 1, 2001,
              among Ameriquest Mortgage Securities Inc., Ameriquest
              Mortgage Company and Bankers Trust Company of California, N.A.,
              Floating Rate Mortgage Pass-through Certificates, Series 2001-1
              ---------------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Trustee's Initial Certification delivered by the Trustee,
pursuant to the Pooling and Servicing Agreement dated as of June __, 2001, by
and among Bankers Trust Company of California, N.A., Ameriquest Mortgage
Securities Inc. and Ameriquest Mortgage Company.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
due authorization, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.

                                      BANKERS TRUST COMPANY
                                      OF CALIFORNIA, N.A.

                                      By:
                                         -----------------------------------
                                      Name:
                                      Title:

<PAGE>

                                   EXHIBIT C-2

                     FORM OF TRUSTEE'S INTERIM CERTIFICATION

                                                              [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California  92868

           Re:  Pooling and Servicing Agreement, dated as of June 1, 2001,
                among Ameriquest Mortgage Securities Inc., Ameriquest
                Mortgage Company and Bankers Trust Company of California, N.A.,
                Floating Rate Mortgage Pass-Through Certificates, Series 2001-1
                ---------------------------------------------------------------

Ladies and Gentlemen:

         Pursuant to Section 2.02 of the Pooling and Servicing Agreement,
attached hereto is the Trustee Interim Certification delivered by the Trustee,
pursuant to the Pooling and Servicing Agreement dated as of June 1, 2001, by and
among Bankers Trust Company of California, N.A., Ameriquest Mortgage Securities
Inc. and Ameriquest Mortgage Company.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
due authorization, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.

                                     BANKERS TRUST COMPANY
                                     OF CALIFORNIA, N.A.

                                     By:
                                        ------------------------------------
                                     Name:
                                     Title:

<PAGE>

                                   EXHIBIT C-3

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                              [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California  92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California  92868

          Re:   Pooling and Servicing Agreement, dated as of June 1, 2001,
                among Ameriquest Mortgage Securities Inc., Ameriquest
                Mortgage Company and Bankers Trust Company of California, N.A.
                Floating Rate Mortgage Pass-Through Certificates, Series 2001-1
                ---------------------------------------------------------------

Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto), it or a Custodian on its
behalf has received:

                (i) the original recorded Mortgage, and the original recorded
         power of attorney, if the Mortgage was executed pursuant to a power of
         attorney, or a certified copy thereof in those instances where the
         public recording office retains the original or where the original has
         been lost; and

               (ii) an original recorded Assignment to the Trustee together with
         the original recorded Assignment or Assignments showing a complete
         chain of assignment from the originator, or a certified copy of such
         Assignments in those instances where the public recording retains the
         original or where original has been lost; and

              (iii)        the original lender's title insurance policy.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage

<PAGE>

File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                      BANKERS TRUST COMPANY
                                      OF CALIFORNIA,  N.A.

                                      By:
                                         ----------------------------------
                                      Name:
                                      Title:

<PAGE>

                                    EXHIBIT D

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated June 21, 2001, between Ameriquest Mortgage Company, a Delaware corporation
(the "Originator") and Ameriquest Mortgage Securities Inc., a Delaware
corporation (the "Purchaser").

                              Preliminary Statement
                              ---------------------

                  The Originator intends to sell the Mortgage Loans (as
hereinafter defined) to the Purchaser on the terms and subject to the conditions
set forth in this Agreement. The Purchaser shall deposit the Mortgage Loans into
a mortgage pool constituting the trust fund. The trust fund will be evidenced by
a single series of floating rate mortgage pass-through certificates designated
as Series 2001-1 (the "Certificates"). The Certificates will consist of six
classes of certificates. The Class CE Certificates, the Class P Certificates and
the Class R Certificates (collectively, the "Non-offered Certificates") will be
delivered to the Originator as partial consideration for the Mortgage Loans as
further described below. The Certificates will be issued pursuant to a Pooling
and Servicing Agreement, dated as of June 1, 2001 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor (in such capacity, the
"Depositor"), the Originator as master servicer (in such capacity the "Master
Servicer") and Bankers Trust Company of California, N.A. as trustee (in such
capacity the "Trustee"). Pursuant to the Pooling and Servicing Agreement, the
Depositor will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders. Capitalized terms used but not
defined herein shall have the meanings set forth in the Pooling and Servicing
Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Originator agrees to
sell, and the Purchaser agrees to purchase, on or before June 25, 2001 (the
"Closing Date"), certain adjustable- rate and fixed-rate conventional
residential mortgage loans (the "Mortgage Loans"), having an aggregate principal
balance as of the close of business on June 1, 2001 (the "Cut-off Date") of
approximately $239,276,376.74, after giving effect to all payments due on the
Mortgage Loans on or before the Cut-off Date (the "Closing Balance"), whether or
not received including the right to any Prepayment Charges collected after the
Cut-off Date from the Mortgagors in connection with any Principal Prepayments on
the Mortgage Loans. Any payments (including Prepayment Charges) collected on or
before the Cut-off Date, including all scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date,
shall belong to the Originator.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Originator have agreed upon which of the mortgage loans owned by the Originator
are to be purchased by the Purchaser pursuant to this Agreement, and the
Originator shall prepare or cause to be prepared on or prior to the Closing Date
a final schedule (the "Closing Schedule") describing such Mortgage Loans and
setting forth all of the Mortgage Loans to be purchased under this Agreement,
including the related Prepayment Charges. The Closing Schedule shall conform to
the requirements set forth in this Agreement and to the definition of "Mortgage
Loan Schedule" under the Pooling and

<PAGE>

                                       -2-

Servicing Agreement. The Closing Schedule shall be used as the Mortgage Loan
Schedule under the Pooling and Servicing Agreement.

                  SECTION 3. CONSIDERATION.

                           In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Originator in immediately available funds an amount
(the "Purchase Price") equal to the net sale proceeds of the Class A
Certificates, the Class M-1 Certificates and the Class M-2 Certificates and (ii)
deliver to Ameriquest Securities L.L.C., upon the order of the Originator, the
Class CE Certificates, the Class P Certificates and the Class R Certificates
(the "Ameriquest L.L.C. Certificates").

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Originator does
hereby sell and contribute, transfer, assign, set over and convey to the
Purchaser, without recourse but subject to the terms of this Agreement, all of
its right, title and interest in, to and under the Mortgage Loans, including the
related Prepayment Charges collected after the Cut-off Date. The contents of
each Mortgage File not delivered to the Purchaser or to any assignee, transferee
or designee of the Purchaser on or prior to the Closing Date are and shall be
held in trust by the Originator for the benefit of the Purchaser or any
assignee, transferee or designee of the Purchaser. Upon the sale and
contribution of the Mortgage Loans the ownership of each Mortgage Note, the
related Mortgage and the other contents of the related Mortgage File is vested
in the Purchaser and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or that come into the possession of the
Originator on or after the Closing Date shall immediately vest in the Purchaser
and shall be delivered immediately to the Purchaser or as otherwise directed by
the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The
Originator will, on or prior to the Closing Date, deliver or cause to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Mortgage Loan:

                  (i) the original Mortgage Note, endorsed in blank or in the
         following form: "Pay to the order of Bankers Trust Company of
         California, N.A., as Trustee under the applicable agreement, without
         recourse," with all prior and intervening endorsements showing a com
         plete chain of endorsement from the originator to the Person so
         endorsing to the Trustee;

                  (ii) the original Mortgage with evidence of recording thereon,
         and a copy, certified by the appropriate recording office, of the
         recorded power of attorney, if the Mortgage was executed pursuant to a
         power of attorney, with evidence of recording thereon;

                  (iii) an original Assignment of the Mortgage in blank;

<PAGE>

                                       -3-

                  (iv) the original recorded Assignment or Assignments of the
         Mortgage showing a complete chain of assignment from the originator to
         the Person assigning the Mortgage to the Trustee as contemplated by the
         immediately preceding clause (iii);

                  (v) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any; and

                  (vi) the original lender's title insurance policy or an
         attorney's opinion of title or similar, guarantee of title acceptable
         to mortgage lenders generally in the jurisdiction where the Mortgaged
         Property is located, together with all endorsements or riders which
         were issued with or subsequent to the issuance of such policy, insuring
         the priority of the Mortgage as a first lien on the Mortgaged Property
         represented therein as a fee interest vested in the Mortgagor, or in
         the event such original title policy is unavailable, a written
         commitment or uniform binder or preliminary report of title issued by
         the title insurance or escrow company.

                  The Originator shall promptly (and in no event later than
thirty (30) Business Days, subject to extension upon mutual agreement between
the Originator and the Trustee, following the later of (i) the Closing Date,
(ii) the date on which the Originator receives the Assignment from the Trustee
and (iii) the date of receipt by the Originator of the recording information for
a Mortgage) submit or cause to be submitted for recording, at no expense to the
Trust Fund or the Trustee, in the appropriate public office for real property
records, each Assignment referred to in (iii) and (iv) above and shall execute
each original Assignment referred to in (iii) in the following form: "Bankers
Trust Company of California, N.A., as Trustee under the applicable agreement".
In the event that any such Assignment is lost or returned unrecorded because of
a defect therein, the Originator shall promptly prepare or cause to be prepared
a substitute Assignment or cure or cause to be cured such defect, as the case
may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the assignments of
Mortgage shall not be required to be submitted for recording with respect to any
Mortgage Loan if the Trustee and each Rating Agency has received an opinion of
counsel, satisfactory in form and substance to each Rating Agency, to the effect
that the recordation of such Assignments in any specific jurisdiction is not
necessary to protect the Trustee's interest in the related Mortgage Note;
provided further, however, notwithstanding the delivery of any opinion of
counsel, each assignment of Mortgage shall be submitted for recording by the
Originator in the manner described above, at no expense to the Trust Fund or the
Trustee, upon the earliest to occur of: (i) reasonable direction by Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii) failure of the
Master Servicer Termination Test, (iii) the occurrence of the bankruptcy or
insolvency of the Originator, (iv) the occurrence of a servicing transfer as
described in Section 7.02 of the Pooling and Servicing Agreement and (v) if the
Originator is not the Master Servicer and with respect to any one Assignment of
Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to
the Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the
Originator is unable to pay the cost of recording the Assignments of Mortgage,
such expense will be paid by the Trustee.

<PAGE>

                                       -4-

                  Notwithstanding anything to the contrary contained in this
Section 4, if any document referred to in Section 4(b)(ii) or 4(b)(iv) above has
been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the
Originator hereunder shall be deemed to have been satisfied upon (1) delivery by
or on behalf of the Originator promptly upon receipt thereof to the Purchaser or
any assignee, transferee or designee of the Purchaser of either the original or
a copy of such document certified by the Originator in the case of (x) above or
the public recording office in the case of (y) above to be a true and complete
copy of the recorded original thereof and (2) if such delivered copy is
certified by the Originator then in addition thereto delivery promptly upon
receipt thereof of either the original or a copy of such document certified by
the public recording office to be a true and complete copy of the original.

                  In the event that the original lender's title insurance policy
has not yet been issued, the Originator shall deliver to the Purchaser or any
assignee, transferee or designee of the Purchaser a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company. Promptly upon receipt by the Originator of any such original
title insurance policy the Originator shall deliver such to the Purchaser or any
assignee, transferee or designee of the Purchaser.

                  Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Originator, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                           (d) TRANSFER OF SUBSEQUENT MORTGAGE LOANS. In
connection with the transactions contemplated by Section 2.11 of the Pooling and
Servicing Agreement, the Originator hereby agrees that the Purchaser shall be
under no obligation to purchase any Subsequent Mortgage Loans unless (i) the
conditions precedent and the representations and warranties contained in Section
2.10 of the Pooling and Servicing Agreement and the Subsequent Transfer
Instrument, substantially in the form of Exhibit 4, are satisfied and (ii) each
Subsequent Mortgage Loan satisfies the representations and warranties contained
in Section 6 of this Agreement. The sale of Subsequent Mortgage Loans by the
Originator to the Purchaser shall be effected in accordance with the terms of
Section 2.10 of the Pooling and Servicing Agreement pursuant to a Subsequent
Mortgage Loan Purchase Agreement substantially in the form of this Agreement.

<PAGE>

                                       -5-

                           (e) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Originator, and the assignee
shall succeed to the rights and obligations hereunder of the Purchaser. Any
expense reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Originator under this Agreement
will be promptly reimbursed by the Originator.

                           (f) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Originator shall either (i) deliver in escrow to the Purchaser
or to any assignee, transferee or designee of the Purchaser, for examination,
the Mortgage File pertaining to each Mortgage Loan or (ii) make such Mortgage
Files available to the Purchaser or to any assignee, transferee or designee of
the Purchaser for examination at the Trustee's offices in Santa Ana, California.
Such examination may be made by the Purchaser, and its respective designees,
upon reasonable notice to the Originator and the Trustee during normal business
hours before the Closing Date and within 60 days after the Closing Date. If any
such person makes such examination prior to the Closing Date and identifies any
Mortgage Loans that do not conform to the requirements of the Purchaser as
described in this Agreement, such Mortgage Loans shall be deleted from the
Closing Schedule. The Purchaser may, at its option and without notice to the
Originator, purchase all or part of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or any person has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or other relief as
provided herein or under the Pooling and Servicing Agreement.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             ORIGINATOR.

                  The Originator hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:

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

                           (ii) The Originator had the full corporate power and
authority to originate, hold and sell each Mortgage Loan and has the full
corporate power and authority to service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate action on the part of the Originator the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Purchaser, constitutes a
legal, valid and binding obligation of the Originator, enforceable against the
Originator in accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited

<PAGE>

                                       -6-

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
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;

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

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

                           (v) The Originator is an approved Originator/servicer
for Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act; and

                           (vi) Except as otherwise disclosed in the Prospectus
Supplement, no litigation is pending against the Originator that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Originator to service the Mortgage Loans or
to perform any of its other obligations hereunder in accordance with the terms
hereof.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
                             RELATING TO THE MORTGAGE LOANS.

         The Originator hereby represents and warrants to the Purchaser that as
of the Closing Date:

                  (i) The information set forth on the related Mortgage Loan
Schedule with respect to each Mortgage Loan is true and correct in all material
respects;

<PAGE>

                                       -7-

                  (ii)     [Reserved];

                  (iii) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;

                  (iv) All payments due prior to the Cut-off Date have been made
and none of the Mortgage Loans will have been contractually delinquent for more
than one calendar month more than once since the origination thereof;

                  (v) Each Mortgage is a valid and enforceable first lien on the
Mortgaged Property, including all improvements thereon, subject only to (a) the
lien of nondelinquent current real property taxes and assessments, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage;

                  (vi) Immediately prior to the assignment of the Mortgage Loans
to the Purchaser, the Originator had good title to, and was the sole legal and
beneficial owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same;

                  (vii) There is no delinquent tax or assessment lien against
any Mortgaged Property;

                  (viii) There is no valid offset, defense or counterclaim to
any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal of or interest on such Mortgage Note, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole or
in part, or subject to any valid right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such valid right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;

                  (ix) There are no mechanics' liens or claims for work, labor
or material rendered to the Mortgaged Property affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of the related
Mortgage, except those which are insured against by the title insurance policy
referred to in (xiii) below;

                  (x) Subject to the Escrow Withhold referred to in (xx) below,
each Mortgaged Property is free of material damage and is in good repair;

<PAGE>

                                       -8-

                  (xi) Each Mortgage Loan at origination complied in all
material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws;

                  (xii) Neither the Originator nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument which has been
recorded, if necessary, to protect the interests of the Purchaser and which has
been delivered to the Trustee); satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto;

                  (xiii) A lender's policy of title insurance together with a
condominium endorsement, extended coverage endorsement, and an adjustable rate
mortgage endorsement (each as applicable) in an amount at least equal to the
Cut-off Date principal balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and effect,
the transfer of the related Mortgage Loan to the Purchaser will not affect the
validity or enforceability of such policy and each such policy was issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located and in a form acceptable to Fannie Mae or Freddie Mac, which
policy insures the Originator and successor owners of indebtedness secured by
the insured Mortgage, as to the first priority lien of the Mortgage; no claims
have been made under such lender's title insurance policy and no prior holder of
the related Mortgage, including the Originator, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;

                  (xiv) Each Mortgage Loan was originated by the Originator (or,
if generated on behalf of the Originator by a person other than the Originator,
is subject to the same underwriting standards and procedures used by the
Originator in originating mortgage loans directly) or by a savings and loan
association, savings bank, commercial bank, credit union, insurance company or
similar institution which is supervised and examined by a federal or state
authority (including a mortgage broker), or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act;

                  (xv) With respect to each Adjustable-Rate Mortgage Loan, on
each adjustment date, the Mortgage Rate will be adjusted to equal the Index plus
the Gross Margin, rounded to the nearest 0.125%, subject to the Periodic Rate
Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate. The related
Mortgage Note is payable on the first day of each month in self-amortizing
monthly installments of principal and interest, with interest payable in
arrears, and requires a monthly payment which is sufficient to fully amortize
the outstanding principal balance of the Mortgage Loan over its remaining term
and to pay interest at the applicable Mortgage Rate. No Mortgage Loan is subject
to negative amortization;

                  (xvi) All of the improvements which were included for the
purpose of determining the appraised value of the Mortgaged Property lie wholly
within the boundaries and building

<PAGE>

                                       -9-

restriction lines of such property, and no improvements on adjoining properties
encroach upon the Mortgaged Property, except those, if any, which are insured
against by the lender's title insurance policy referred to in (xiii) above.

                  (xvii) All inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities and the Mortgaged Property is
lawfully occupied under applicable law except as may otherwise be insured
against by the lender's title insurance policy referred to in (xiii) above.

                  (xviii) All parties which have had any interest in the
Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located;

                  (xvix) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and with applicable laws. All parties
to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties;

                  (xx) The proceeds of each Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor have been complied with, excepting
therefrom any Mortgaged Property or Mortgage Loan subject to an Escrow Withhold
as defined in the Originator's underwriting guidelines. All costs, fees and
expenses incurred in making, closing or recording the Mortgage Loans were paid;

                  (xxi) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;

                  (xxii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;

                  (xxiii) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary arrangements
for repayment thereof have not been made, and

<PAGE>

                                      -10-

no escrow deposits or payments of other charges or payments due the Originator
have been capitalized under the Mortgage or the related Mortgage Note;

                  (xxiv) The origination, collection and servicing practices
used by the Originator with respect to each Mortgage Loan have been in all
material respects legal, proper, reasonable and customary in the subprime
mortgage origination and servicing business;

                  (xxv) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations;

                  (xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;

                  (xxvii) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Mortgage Loan or the minimum amount required to
compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxix) below contain
a standard mortgagee clause naming the Originator or the original mortgagee, and
its successors in interest, as mortgagee, and the Originator has received no
notice that any premiums due and payable thereon have not been paid; the
Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;

                  (xxviii) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;

                  (xxix) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note; and the
Originator has not waived any default, breach, violation or event of
acceleration;

                  (xxx) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and dwelling units
in planned unit developments, which does not include (a) cooperatives or (b)
mobile homes and manufactured homes (as defined in the Fannie Mae
Seller-Servicer's Guide), except when the appraisal indicates that (i) the
mobile or manufactured

<PAGE>

                                      -11-

home was built under the Federal Manufactured Home Construction and Safety
Standards of 1976 or (ii) otherwise assumes the characteristics of site-built
housing and meets local building codes, is readily marketable, has been
permanently affixed to the site, is not in a mobile home "park," and is treated
as real property under the applicable state law. With respect to any Mortgage
Loan that is secured by a leasehold estate, (a) the lease is valid, in full
force and effect; (b) all rents and other payments due under the lease have been
paid; (c) the lessee is not in default under any provision of the lease; (d) the
term of the lease exceeds the maturity date of the related Mortgage Loan by at
least five years and (e) the Mortgagee under the Mortgage Loan is given notice
and an opportunity to cure any defaults under the lease;

                  (xxxi) There is no obligation on the part of the Originator or
any other party under the terms of the Mortgage or related Mortgage Note to make
payments in lieu of or in addition to those made by the Mortgagor;

                  (xxxii) Any future advances made prior to the related Purchase
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan;

                  (xxxiii) Each Mortgage Loan was underwritten in accordance
with the Originator's underwriting guidelines;

                  (xxxiv) The Mortgage File contains an appraisal which was
performed by an appraiser who satisfied, and which was conducted in accordance
with, all of the applicable requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended;

                  (xxxv) None of the Mortgage Loans is a graduated payment
mortgage loan, nor is any Mortgage Loan subject to a temporary buydown or
similar arrangement;

                  (xxxvi) With respect to each Mortgage Loan, no loan junior in
lien priority to such Mortgage Loan and secured by the related Mortgaged
Property was originated by the Originator at the time of origination of such
Mortgage Loan;

                  (xxxvii) The Mortgage Loans comply in all material respects
with the description set forth under the heading "The Mortgage Pool" in the
Depositor's Prospectus Supplement, dated June 21, 2001 (the "Prospectus
Supplement");

                  (xxxviii) The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, except as may be limited by
applicable law;

<PAGE>

                                      -12-

                  (xxxix) The information set forth in the Mortgage Loan
Schedule relating to the existence of a Prepayment Charge is complete, true and
correct in all material respects at the date or dates respecting which such
information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms upon the full and voluntary prepayment
by the Mortgagor under applicable law (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally; or
(2) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary payoff; and

                  (xl) Each Mortgage Loan is an obligation that is principally
secured by real property for purposes of the REMIC Provisions of the Code.

                  SECTION 7.  REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                              AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be materially impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Purchaser to review or examine such documents and shall inure to
the benefit of any assignee, transferee or designee of the Purchaser, including
the Trustee for the benefit of the Certificateholders.

                  Upon discovery by the Originator, the Purchaser or any
assignee, transferee or designee of the Purchaser of any materially defective
document in, or that any material document was not transferred by the Originator
(as listed on the Trustee's Preliminary Exception Report), as part of, any
Mortgage File or of a breach of any of the representations and warranties
contained in Section 5 or Section 6 that materially and adversely affects the
value of any Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee, the party discovering the breach
shall give prompt written notice to the other. Within ninety (90) days of its
discovery or its receipt of notice of any such missing documentation which was
not transferred to the Purchaser as described above or materially defective
documentation or any such breach of a representation and warranty the Originator
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Originator cannot deliver such
missing document or such defect or breach cannot be cured, the Originator shall,
within 90 days of its discovery or receipt of notice, either (i) repurchase the
affected Mortgage Loan at a price equal to the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans. In the event that any Mortgage Loan is subject to a
breach of the representation and warranty in Section 6(xl) resulting in the
Master Servicer's inability to collect all or part of the Prepayment Charge from
the Mortgagor, in lieu of repurchase, the Originator shall be obligated to remit
to the Master Servicer (for deposit in the Collection Account) any shortfall in
the Prepayment Charge collected upon the Mortgagor's voluntary and full
principal prepayment.

<PAGE>

                                      -13-

         The Originator shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Originator shall deliver to the Purchaser such
amended Closing Schedule and shall deliver such other documents as are required
by this Agreement or the Pooling and Servicing Agreement within five (5) days of
any such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Any repurchase or substitution required by this Section shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

         In addition, upon discovery by the Originator, the Purchaser, or any
assignee, transferee or designee of the Purchaser that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering the breach shall give prompt written notice
within five Business Days to the others. Within ninety (90) days of its
discovery or its receipt of notice, the Originator promptly shall either (i)
repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.

                  (b) It is understood and agreed that the obligations of the
Originator set forth in this Section 7 to cure, remit a Prepayment Charge
shortfall, repurchase or substitute for a defective Mortgage Loan constitute the
sole remedies of the Purchaser against the Originator respecting a missing or
defective document or a breach of the representations and warranties contained
in Section 5 or Section 6. It is understood and agreed that the obligations of
the Originator set forth in this Section 7 to cure, repurchase or substitute for
a Mortgage Loan as to which a material document is missing constitute the sole
remedies of the Purchaser against the Originator respecting a missing document.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Originator under this Agreement shall be true and
                           correct in all material respects as of the date as of
                           which they are made and no event shall have occurred
                           which, with notice or the passage of time, would
                           constitute a default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by

<PAGE>

                                      -14-

                           all signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Originator shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser pursuant to Section 2.01
                           of the Pooling and Servicing Agreement; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Originator on the Closing Date, against
delivery and release by the Originator to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Originator of the Purchase Price in immediately available funds.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                           (a)      An Officers' Certificate of the Originator,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriters may rely, in
                                    the form of Exhibit 1 hereto, and attached
                                    thereto copies of the certificate of
                                    incorporation, by-laws and certificate of
                                    good standing of the Originator under the
                                    laws of Delaware and (ii) if the Class CE
                                    Certificates and Class P Certificates are
                                    offered on the Closing Date pursuant to a
                                    Private Placement Memorandum, the Originator
                                    shall deliver an Officer's Certificate
                                    stating that the same information contained
                                    in such Private Placement Memorandum is true
                                    and accurate in all material respects;

                           (b)      An Officers' Certificate of the Originator,
                                    dated the Closing Date, upon which the
                                    Purchaser and the Underwriters may rely, in
                                    the form of Exhibit 2 hereto, with respect
                                    to certain facts regarding the sale of the
                                    Mortgage Loans by the Originator to the
                                    Purchaser;

                           (c)      An Opinion of Counsel of the Originator,
                                    dated the Closing Date and addressed to the
                                    Purchaser and the Underwriters,
                                    substantially in the form attached hereto as
                                    Exhibit 3;

                           (d)      Such opinions of counsel from the
                                    Purchaser's or Originator's counsel as the
                                    Rating Agencies may request in connection
                                    with the sale of the Mortgage Loans by the
                                    Originator to the Purchaser or the

<PAGE>

                                      -15-

                                    Originator's execution and delivery of, or
                                    performance under, this Agreement and upon
                                    which the Underwriters may rely;

                            (e)     A letter from Deloitte & Touche L.L.P.,
                                    certified public accountants, dated the date
                                    hereof and to the effect that they have
                                    performed certain specified procedures as a
                                    result of which they determined that certain
                                    information of an accounting, financial or
                                    statistical nature set forth in the
                                    Prospectus Supplement, under the captions
                                    "Summary of Prospectus Supplement", "Risk
                                    Factors", "The Mortgage Pool", "Yield on the
                                    Certificates", "Description of the
                                    Certificates", and "Pooling and Servicing
                                    Agreement--The Originator and Master
                                    Servicer", agrees with the records of the
                                    Originator;

                            (f)     The Originator shall deliver for inclusion
                                    in the Prospectus Supplement under the
                                    captions "The Mortgage Pool--Underwriting
                                    Standards; Representations" and "Pooling and
                                    Servicing Agreement--The Originator and
                                    Master Servicer", or for inclusion in other
                                    offering material such publicly available
                                    information regarding its financial
                                    condition and its mortgage loan delinquency,
                                    foreclosure and loss experience,
                                    underwriting standards, lending activities
                                    and loan sales, production, and servicing
                                    and collection practices, and any similar
                                    nonpublic, unaudited financial information;
                                    and

                           (g)      Such further information, certificates,
                                    opinions and documents as the Purchaser or
                                    the Underwriters may reasonably request.

                  SECTION 10. COSTS. The Originator shall pay (or shall
reimburse the Purchaser or any other Person to the extent that the Purchaser or
such other Person shall pay) all costs and expenses incurred in connection with
the transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Originator's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with producing the Originator's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) and 9(e) to the extent such
costs and expenses were not previously paid by the Originator. The Originator
shall pay (or shall reimburse the Purchaser or any other Person to the extent
that the Purchaser or such other Person shall pay) the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, prospectus
supplement, and private placement memorandum relating to the Certificates and
other related documents, the initial fees, costs and expenses of the Trustee
relating to the issuance of the initial certification of the Trustee under
Section 2.02 of the Pooling and Servicing Agreement, the fees and expenses of
the Originator's counsel in connection with the preparation of all documents
relating to the securitization of the Mortgage Loans, the filing fee charged by
the Securities and Exchange Commission for registration of the Certificates, the
cost of outside special counsel that may be required for the Purchaser, the cost

<PAGE>

                                      -16-

of obtaining the documents referred to in Section 9(g) and the fees charged by
any rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.

                  SECTION 11. SERVICING. The Originator has represented to the
Purchaser that the Mortgage Loans are being serviced by the Originator in
accordance with the terms and provisions set forth in the Aggregation Facility,
as memorialized in the Letter Agreement dated May 10, 2001 (the "Aggregation
Facility") between Salomon Brothers Realty Corp. and the Originator, and it is
understood and agreed by and between the Originator and the Purchaser that the
interim servicing arrangements under the Aggregation Facility with the
Originator will be superseded by the servicing arrangements set forth in the
Pooling and Servicing Agreement.

                  SECTION 12.       [RESERVED]

                  SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Originator's failure
to deliver the Mortgage Loans on or before the Closing Date. The Originator
hereby grants to the Purchaser a lien on and a continuing security interest in
the Originator's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Originator
of its obligation hereunder, and the Originator agrees that it holds such
Mortgage Loans in custody for the Purchaser, subject to the Purchaser's (i)
right, prior to the Closing Date, to reject any Mortgage Loan to the extent
permitted by this Agreement, and (ii) obligation to deliver or cause to be
delivered the consideration for the Mortgage Loans pursuant to Section 8 hereof.
Any Mortgage Loans rejected by the Purchaser shall concurrently therewith be
released from the security interest created hereby. The Originator agrees that,
upon acceptance of the Mortgage Loans by the Purchaser or its designee and
delivery of payment to the Originator, that its security interest in the
Mortgage Loans shall be released. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cu mulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.

                  Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 12
shall be deemed to have been released.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar

<PAGE>

                                      -17-

mailed writing, if to the Purchaser, addressed to the Purchaser at 1100 Town &
Country Road, Suite 1100, Orange, California 92868, Attention: General Counsel,
or such other address as may hereafter be furnished to the Originator in writing
by the Purchaser; if to the Originator, addressed to the Originator at 1100 Town
& Country Road, Suite 1100, Orange, California 92868, Attention: General
Counsel, or to such other address as the Originator may designate in writing to
the Purchaser.

                  SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 16. AGREEMENT OF PARTIES. The Originator and the
Purchaser agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agree ment and the
Pooling and Servicing Agreement.

                  SECTION 17. SURVIVAL. The Originator agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Originator herein or in any such
certificate or other instrument shall survive the delivery of and payment for
the Mortgage Loans and shall continue in full force and effect, notwithstanding
any restrictive or qualified endorsement on the Mortgage Notes and
notwithstanding subsequent termination of this Agreement, the Pooling and
Servicing Agreement or the Trust Fund.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this

<PAGE>

                                      -18-

Agreement nor any term hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought. The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Originator to the Purchaser as provided
in Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Originator to the Purchaser and not as a pledge of the Mortgage Loans by the
Originator to the Purchaser to secure a debt or other obligation of the
Originator. However, in the event that, notwithstanding the aforementioned
intent of the parties, the Mortgage Loans are held to be property of the
Originator, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Originator to the
Purchaser to secure a debt or other obligation of the Originator and (b) (1)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2) the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by the
Originator to the Purchaser of a security interest in all of the Originator's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accor dance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account whether in the form of cash, instruments, securities
or other property; (3) the possession by the Purchaser or its agent of Mortgage
Notes, the related Mortgages and such other items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the New York Uniform Commercial Code; and
(4) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to Section 4(d) hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Originator and the Purchaser shall, to the extent consistent with
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Pooling and Servicing Agreement.

<PAGE>

                                                      -19-

                  IN WITNESS WHEREOF, the Originator and the Purchaser have
caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.

                                            AMERIQUEST MORTGAGE COMPANY

                                            By:____________________________
                                            Name:
                                            Title:

                                            AMERIQUEST MORTGAGE SECURITIES INC.

                                            By:____________________________
                                            Name:
                                            Title:

<PAGE>

                                                                       EXHIBIT 1

                [FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]

         I, _____________ hereby certify that I am the duly appointed
______________ of Ameriquest Mortgage Company, a Delaware corporation (the
"Originator"), and further certify, on behalf of the Originator, as follows:

                  1. Attached hereto as Exhibit A is a true and correct copy of
         the Certificate of Incorporation and By-laws of the Originator, both of
         which are in full force and effect on the date hereof. There has been
         no amendment or other document filed affecting the Certificate of
         Incorporation of the Originator since April 29, 1997, and no such
         amendment has been authorized. There has been no amendment or other
         document filed affecting the By-laws of the Originator since September
         14, 1994, and no such amendment has been authorized. Attached hereto as
         Exhibit B is a certificate of good standing, dated _________, 2001
         issued by the State of Delaware with respect to the Originator. No
         event has occurred since the date thereof that has affected the good
         standing of the Originator under the laws of the State of Delaware.

                  2. There are no actions, suits or proceedings pending or, to
         the best of my knowledge, threatened against or affecting the
         Originator that, if adversely determined, individually or in the
         aggregate, would adversely affect the Originator's ability to perform
         its obligations under (i) the Mortgage Loan Purchase Agreement, dated
         June __, 2001 (the "Purchase Agreement") between the Originator and
         Ameriquest Mortgage Securities Inc. (the "Depositor"), (ii) the Pooling
         and Servicing Agreement, dated as of June 1, 2001 (the "Pooling and
         Servicing Agreement"), among the Depositor as depositor, the Originator
         as master servicer (in such capacity, the "Master Servicer") and
         Bankers Trust Company of California, N.A. as trustee (the "Trustee") or
         (iii) the Underwriting Agreement, dated June __, 2001 (the
         "Underwriting Agreement"), among the Depositor, Ameriquest and Salomon
         Smith Barney Inc. (the "Underwriter"). No proceedings looking toward
         merger, consolidation or liquidation, dissolution or bankruptcy of the
         Originator are pending or contemplated.

                  3. Each person who, as an officer or representative of the
         Originator or the Master Servicer, signed the Purchase Agreement, the
         Pooling and Servicing Agreement, the Custodial Agreement or the
         Underwriting Agreement, and any other document delivered prior hereto
         or on the date hereof in connection with the purchase described in the
         transactions described in the Pooling and Servicing Agreement was, at
         the respective times of such signing and delivery, and is now, duly
         elected or appointed, qualified and acting as such officer or
         representative, and the signatures of such persons appearing on such
         documents are their genuine signatures.

                  4. Each of the Mortgage Loans referred to in the Purchase
         Agreement and the Pooling and Servicing Agreement was originated in
         accordance with Section 6 (xiii) of the Purchase Agreement.

<PAGE>

                                       -2-

                  5. All of the representations and warranties of the Originator
         under the Purchase Agreement, and of the Master Servicer under the
         Pooling and Servicing Agreement are true and correct in all material
         respects as of the Closing Date (subject, in the case of the Closing
         Schedule delivered pursuant to the Purchase Agreement, to such
         amendments thereto as were duly made on or before the date hereof) and
         no event has occurred which, with notice or the passage of time or
         both, would constitute a default under the Purchase Agreement or the
         Underwriting Agreement, or an Event of Default under the Pooling and
         Servicing Agreement.

                  6. The information set forth in the Mortgage Loan Schedule
         attached as an exhibit to the Purchase Agreement and to the Pooling and
         Servicing Agreement is true and correct in all material respects.

                   7. The information regarding the Originator, its financial
         condition and its mortgage loan delinquency, foreclosure and loss
         experience, underwriting standards, lending activities and loan sales,
         production and servicing and collection practices, as is set forth
         herein is accurate in all material respects.

                  8. The information contained in the Prospectus Supplement,
         dated June __, 2001, relating to the Mortgage Loans, the Originator,
         and its loan portfolio, and any of the same information contained in
         the Private Placement Memorandum, is true and accurate in all material
         respects and does not contain any untrue statement of a material fact
         or omit to state a material fact required to be stated therein or
         necessary to make the statements therein, in light of the circumstances
         under which they were made, not misleading.

                  9. With respect to its sale of the Mortgage Loans and the
         related transactions and undertakings contemplated by the Purchase
         Agreement, the Originator has complied with all the obligations by
         which it is bound and has satisfied all the conditions on its part to
         be performed or satisfied prior to the Closing Date.

                  10. Capitalized terms used but not defined herein shall have
         the meanings assigned in the Purchase Agreement.

<PAGE>

                                       -3-

                  IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Originator.

Dated:  June __, 2001

                                                     By:________________________
                                                     Name:
                                                     Title:

                  I, _______________, an ______________________ of Ameriquest
Mortgage Company hereby certify that ___________________ is the duly appointed,
qualified and acting _____________________ of the Originator and that the
signature appearing above is his genuine signature.

                  IN WITNESS WHEREOF, I have hereunto signed my name.

Dated:  June __, 2001

                                                     By:________________________
                                                     Name:
                                                     Title:

<PAGE>

                                                                       EXHIBIT 2

                [FORM OF OFFICER'S CERTIFICATE OF THE ORIGINATOR]

                       Ameriquest Mortgage Securities Inc.
                Floating Rate Mortgage Pass-Through Certificates
                                  Series 2001-1

                                 CERTIFICATE OF
                           AMERIQUEST MORTGAGE COMPANY

                  Reference is made to the sale of mortgage loans (the "Mortgage
Loans") by Ameriquest Mortgage Company ("Ameriquest") to Ameriquest Mortgage
Securities Inc. (the "Depositor") pursuant to a Mortgage Loan Purchase
Agreement, dated June __, 2001 (the "Purchase Agreement") between Ameriquest and
the Depositor and the simultaneous issuance of Floating Rate Mortgage
Pass-Through Certificates, Series 2001-1, Class A, Class M-1, Class M-2, Class
CE, Class P and Class R Certificates (the "Certificates"), pursuant to a Pooling
and Servicing Agreement, dated as of June 1, 2001 (the "Pooling and Servicing
Agreement") among the Depositor as depositor, Ameriquest as master servicer (in
such capacity, the "Master Servicer") and Bankers Trust Company of California,
N.A. as trustee (the "Trustee"). In consideration for its purchase of the
Mortgage Loans, the Depositor will deliver to Ameriquest immediately available
funds and a wholly-owned bankruptcy remote subsidiary of Ameriquest will retain
the Class CE Certificates, the Class P Certificates and the Class R
Certificates. The Depositor will sell the Class A, Class M-1 and Class M-2
Certificates to Salomon Smith Barney Inc. (the "Underwriter") for offer and sale
pursuant to the terms of an Underwriting Agreement, dated June __, 2001 (the
"Underwriting Agreement"), among the Depositor, Ameriquest and the Underwriter.
The Purchase Agreement, the Pooling and Servicing Agreement and the Underwriting
Agreement together, are hereinafter collectively referred to as the
"Agreements". Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Agreements.

                  The undersigned is a duly appointed ______________________ of
Ameriquest and hereby certifies after reasonable investigation that:

         1. The transfer of the Mortgage Loans by the undersigned pursuant to
the Agreements was intended to be a sale and to be reported as such under
generally accepted accounting principles ("GAAP") and for federal income tax
purposes.

         2. In connection with the sale of the Mortgage Loans by the undersigned
pursuant to the Agreements, the undersigned (i) was solvent at all relevant
times prior thereto and was not rendered insolvent thereby, (ii) after giving
effect thereto, is able to pay its debts as they mature, (iii) was not left with
unreasonably small capital for the business in which engaged and proposed to be
engaged, (iv) had and has no intention of commencing any bankruptcy, insolvency
or similar proceeding, (v) did not and does not have any intent to hinder, delay
or defraud any of the undersigned's creditors, (vi) had a valid business reason
therefor and (vii) received new value and consideration constituting reasonably
equivalent value and fair consideration.

<PAGE>

                                                      -2-

         3. The undersigned has not acquired, and will not acquire at any time,
any direct or indirect ownership or other economic interest in, or other right
or obligation with respect to, any Mortgage Loan or Certificate, except as
described in the Agreements.

         The undersigned has executed this Certificate as of June __, 2001.

                                                    AMERIQUEST MORTGAGE COMPANY

                                                    By:________________________
                                                    Name:
                                                    Title:

<PAGE>

                                                                       EXHIBIT 3

                 [FORM OF OPINION OF COUNSEL TO THE ORIGINATOR]

TO:  Addressees on Schedule A

                                             June __, 2001

                  Re:      Ameriquest Mortgage Securities Inc.
                           Floating Rate Mortgage Pass-Through Certificates
                           Series 2001-2
                           ------------------------------------------------

Ladies and Gentlemen:

         I am Senior Counsel of Ameriquest Mortgage Company (the "Company") and
have acted as counsel to the Company in connection with the servicing by the
Company of certain residential first mortgage loans (the "Mortgage Loans")
pursuant to the Pooling and Servicing Agreement, dated as of June 1, 2001 (the
"Pooling and Servicing Agreement"), among Ameriquest Mortgage Securities Inc. as
depositor (the "Depositor"), the Company and Bankers Trust Company of
California, N.A. as trustee (the "Trustee"), relating to the issuance and sale
by the Depositor of Floating Rate Mortgage Pass-Through Certificates, Series
2001-1, designated as the Class A, Class M-1, Class M- 2, Class CE, Class P and
Class R (collectively, the "Certificates"). In connection with the sale and
servicing of the Mortgage Loans, the Company has entered into the Mortgage Loan
Purchase Agreement, dated June __, 2001, between the Company and the Depositor
(the "Purchase Agreement") and the Underwriting Agreement, dated June __, 2001
(the "Underwriting Agreement"), among the Depositor, Ameriquest and Salomon
Smith Barney Inc. (the "Underwriter"). The Purchase Agreement, the Pooling and
Servicing Agreement and the Underwriting Agreement are collectively referred to
herein as the "Agreements". Capitalized terms not defined herein have the
meanings set forth in the Agreements.

         As such counsel, I have examined original or reproduced or certified
copies of the certificate of incorporation and bylaws of the Company, as amended
to date, records of actions taken by the Board of Directors of the Company and
copies of the Agreements, the Prospectus Supplement, dated June __, 2001 (the
"Prospectus Supplement"), to the Prospectus, dated ___________, 2001, relating
to the Class A, Class M-1 and Class M-2 Certificates. I have also examined such
other documents, papers, statutes and authorities as I deem necessary as a basis
for the opinions hereinafter set forth. In all such examinations made by me in
connection with this opinion, I have assumed the genuineness of all signatures
and the completeness and authenticity of all records and all documents submitted
to me as copies thereof. As to various matters of fact relevant to the opinions
hereinafter expressed, I have relied upon the representations and warranties
contained in the Agreements and statements and certificates of officers and
representatives of the Company. As to matters in Paragraph 5 below with respect
to which I opine based on my knowledge, I have relied solely upon inquiries made
to and responses received from officers and representatives of the Company and
the documents furnished to me by representatives of the Company, which documents
such

<PAGE>

Ameriquest Mortgage Securities Inc.
Salomon Smith Barney Inc.
June __, 2001                                                            Page 2.

representatives have informed me include the only material indentures,
agreements and instruments to which the Company is a party or by which it or any
of its properties or assets are bound.

         In addition to the foregoing, I have assumed that, if the Trustee, the
Company or any Certificateholder seeks to enforce any of their respective rights
under the Agreements, they will do so only in good faith and only in
circumstances and in a manner in which it is commercially reasonable to do so.

         In addition to rendering legal advice and assistance to the Company in
the course of the negotiation and preparation of the Agreements, involving,
among other things, discussions and inquiries concerning various legal matters
and the review of certain corporate records, documents and proceedings, I also
participated in conferences with representatives of the Depositor and the
Company's independent certified public accountants, at which the contents of the
Prospectus Supplement and related matters were discussed and revised. I have
not, however, except with respect to matters expressly covered by this opinion,
independently verified the accuracy, completeness or fairness of the statements
contained in the Prospectus Supplement, and, due to the limitations inherent in
the information available to me and the nature and extent of my participation in
such conferences, I am unable to assume, and I do not assume, any responsibility
for the accuracy, completeness or fairness of such statements.

         I express no opinion except as to (i) United States federal law and
(ii) the laws of the State of California.

         Based upon and subject to the foregoing, I am of the opinion that:

         1. The Company is duly authorized and qualified to transact any and all
business contemplated by the Agreements in any state in which a Mortgaged
Property securing a Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such State, to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of the Pooling and Servicing
Agreement.

         2. The Company has the power to engage in the transactions contemplated
by each and all of the Agreements and has all requisite power, authority and
legal right to execute and deliver the Agreements and any other documents
delivered in connection therewith and to perform and observe the terms and
conditions of such instruments.

         3. Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement enforceable
in accordance with its respective terms against the Company, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general equity principles regardless of whether such
enforcement is considered in a proceeding in equity or at law.

<PAGE>

Ameriquest Mortgage Securities Inc.
Salomon Smith Barney Inc.
June __, 2001                                                            Page 3.

         4. No consent, approval, authorization, license, permit or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Company of, or compliance by the Company with, any or all of
the Agreements or the consummation of the transactions contemplated by the
Agreements.

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

         6. Except as disclosed in the Prospectus Supplement dated June __,
2001, to the best of my knowledge, no litigation is pending against the Company
that would materially and adversely affect the execution, delivery or
enforceability of the Agreements or the ability of the Company to service the
Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms thereof.

         7. Based upon my participation, nothing has come to my attention that
has caused me to believe that the information contained in the Prospectus
Supplement, dated June __, 2001 relating to the Mortgage Loans, the Company, and
its loan portfolio, and with respect to any private placement memorandum or
other offering document, any information of a comparable nature,(i) is not true
and accurate, (2) contains any untrue statement of a material fact or (3) omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

<PAGE>

         This opinion is solely for the benefit of the addressees hereof, and
may not be relied upon in any manner by any other person or entity.

                                                     Respectfully submitted,

                                                     ___________________________

<PAGE>

                                                                       EXHIBIT 4

                     Form of Subsequent Transfer Instrument

                  Pursuant to this Subsequent Transfer Instrument, dated
__________, 2001 (the "Instrument"), between Ameriquest Mortgage Securities Inc.
as seller (the "Depositor") and Bankers Trust Company of California, N.A. as
trustee (the "Trustee") of the Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2001-1, and pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2001 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, Ameriquest Mortgage
Company as master servicer and the Trustee as trustee, the Depositor and the
Trustee agree to the sale by the Depositor and the purchase by the Trustee on
behalf of the Trust Fund, of the Mortgage Loans listed on the attached Schedule
of Mortgage Loans (the "Subsequent Mortgage Loans").

                  Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.

                  Section 1.        CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.

                  (a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.

                  (b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as originator and seller, to the extent of
the Subsequent Mortgage Loans, a copy of which agreement is annexed hereto as
Attachment G.

                  (c) Additional terms of the sale are set forth on Attachment A
hereto.

<PAGE>

                  Section 2.        REPRESENTATIONS AND WARRANTIES; CONDITIONS
                                    PRECEDENT.

                  (a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.10 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.

                  (b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.

                  Section 3.        RECORDATION OF INSTRUMENT.

                  To the extent permitted by applicable law, this Instrument, 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
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.

                  Section 4.        GOVERNING LAW.

                  This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

                  Section 5.        COUNTERPARTS.

                  This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.

<PAGE>

                  Section 6.        SUCCESSORS AND ASSIGNS.

                  This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.

                                            AMERIQUEST MORTGAGE SECURITIES INC.

                                            By:________________________________
                                            Name:
                                            Title:

                                            BANKERS TRUST COMPANY OF CALIFORNIA,
                                            N.A., as trustee

                                            By:________________________________
                                            Name:
                                            Title:

Attachments
-----------

A.       Additional terms of sale.
B.       Schedule of Subsequent Mortgage Loans.
C.       Depositor's Officer's certificate.
D.       Opinions of Depositor's counsel (bankruptcy, corporate).
E.       Trustee's Certificate.
F.       Opinion of Trustee's Counsel.
G.       Subsequent Mortgage Loan Purchase Agreement.

<PAGE>

                                  ATTACHMENT A

                            ADDITIONAL TERMS OF SALE

         A.       General

                  1.       Subsequent Cut-off Date: __________, 2001
                  2.       Subsequent Transfer Date: __________, 2001
                  3.       Aggregate Principal Balance of the Subsequent
                           Mortgage Loans as of the Subsequent Cut-off Date:
                           $______________
                  4.       Purchase Price:  100.00%

         B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date; provided, however that
approximately 100% of the Subsequent Mortgage Loans, by aggregate principal
balance as of the related Subsequent Cut-off Date, may have a first payment date
occurring on or after the Subsequent Cut-off Date and, therefore, such
Subsequent Mortgage Loans could not have been delinquent as of the related
Subsequent Cut-off Date; (ii) the term to stated maturity of the Subsequent
Mortgage Loan will not be less than 180 months and will not exceed 360 months
from its first payment date; (iii) the Subsequent Mortgage Loan may not provide
for negative amortization; (iv) the Subsequent Mortgage Loan will not have a
Loan-to-Value Ratio greater than 90%; (v) the Subsequent Mortgage Loans will
have, as of the Subsequent Cut-off Date, a weighted average term since
origination not in excess of 15 months; (vi) no Subsequent Mortgage Loan shall
have a Mortgage Rate less than [__]% or greater than [__]%; (vii) the Subsequent
Mortgage Loan shall have been serviced by the Master Servicer since origination
or purchased by the Originator in accordance with its underwriting guidelines;
(viii) the Subsequent Mortgage Loan must have a first payment date occurring on
or before ___________, 2001 and (ix) the Subsequent Mortgage Loan shall have
been be underwritten in accordance with the criteria set forth under the section
"The Mortgage Pool--Underwriting Standards; Representations" in the Prospectus
Supplement.

         C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will, as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than [__]% and not more than [__]%; (iii) have a weighted average
Loan-to-Value Ratio of not more than [__]%; (iv) have no Mortgage Loan with a
principal balance in excess of $[__] and (v) have a weighted average Gross
Margin of not less than [6.590]%, in each case, as applicable, by aggregate
principal balance of the Mortgage Loans as of the related Subsequent Cut-off
Date.

<PAGE>

                                   EXHIBIT E-1

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION

         Name of Mortgagor:
                                    --------------------------------------------

         Master Servicer
         Loan No.:
                                    --------------------------------------------

TRUSTEE

         Name:
                                    --------------------------------------------

         Address:
                                    --------------------------------------------

         Trustee
         Mortgage File No.:
                                    --------------------------------------------

DEPOSITOR

         Name:             AMERIQUEST MORTGAGE SECURITIES INC.

         Address:
                                    --------------------------------------------

         Certificates:    Floating Rate Mortgage Pass-Through
                          Certificates, Series 2001-1.

<PAGE>

                  The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of
Floating Rate Mortgage Pass-Through Certificates, Series 2001-1, the documents
referred to below (the "Documents"). All capitalized terms not otherwise defined
in this Request for Release shall have the meanings given them in the Pooling
and Servicing Agreement, dated as of June 1, 2001, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").

( )  Promissory Note dated _______________, 19__, in the original principal
     sum of $__________, made by _____________________, payable to, or endorsed
     to the order of, the Trustee.

( )  Mortgage recorded on _________________________ as instrument no.
     ____________________ in the County Recorder's Office of the County of
     _________________, State of __________________ in book/reel/docket
     _________________ of official records at page/image _____________.

( )  Deed of Trust recorded on ___________________ as instrument no.
     ________________ in the County Recorder's Office of the County of
     _________________, State of ____________________ in book/reel/docket
     _________________ of official records at page/image ______________.

( )  Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
     ___________________ as instrument no. _________ in the County Recorder's
     Office of the County of _______________, State of _______________________
     in book/reel/docket ____________ of official records at page/image
     ____________.

( )  Other documents, including any amendments, assignments or other
     assumptions of the Mortgage Note or Mortgage.

( )  ---------------------------------------------

( )  ---------------------------------------------

( )  ---------------------------------------------

( )  ---------------------------------------------

                  The undersigned Master Servicer hereby acknowledges and agrees
as follows:

                  (1) The Master Servicer shall hold and retain possession of
         the Documents in trust for the benefit of the Trustee, solely for the
         purposes provided in the Agreement.

                  (2) The Master Servicer shall not cause or permit the
         Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Master Servicer assert or seek to assert any claims or
         rights of setoff to or against the Documents or any proceeds thereof.

<PAGE>

                  (3) The Master Servicer shall return each and every Document
         previously requested from the Mortgage File to the Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Collection Account and except as expressly provided in
         the Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Master Servicer shall at all times be earmarked for the account of the
         Trustee, and the Master Servicer shall keep the Documents and any
         proceeds separate and distinct from all other property in the Master
         Servicer's possession, custody or control.

Dated:

                                      [MASTER SERVICER]

                                      By:
                                         ------------------------------------
                                      Name:
                                      Title:

<PAGE>

                                   EXHIBIT E-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

                     OFFICERS' CERTIFICATE AND TRUST RECEIPT
                FLOATING RATE MORTGAGE PASS-THROUGH CERTIFICATES
                                  SERIES 2001-1

____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.

LOAN NUMBER:                        BORROWER'S NAME:
            ---------------------                   -------------------------

COUNTY:
       --------------------------

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

                                     DATED:
----------------------------------         -----------------------------------

/  /   VICE PRESIDENT

/  /   ASSISTANT VICE PRESIDENT

<PAGE>

                                   EXHIBIT F-1

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                     [Date]

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California  92705-4934

          Re:   Ameriquest Mortgage Securities Inc., Floating Rate
                Mortgage Pass-Through Certificates, Series 2001-1,
                Class ___, representing a ___% Class ___ Percentage Interest
                ------------------------------------------------------------

Ladies and Gentlemen:

         In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:

         Neither the Transferor nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, (e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the "1933 Act"), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Pooling and Servicing Agreement, dated as of June 1, 2001, among
Ameriquest Mortgage Securities Inc. as Depositor, Ameriquest Mortgage Company as
Master Servicer and Bankers Trust Company of California, N.A. as Trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                       Very truly yours,

                                       [Transferor]

                                       By:
                                          ---------------------------------
                                       Name:
                                       Title:

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                            [Date]

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California  92705-4934

            Re:  Ameriquest Mortgage Securities Inc., Floating Rate
                 Mortgage Pass-Through Certificates, Series 2001-1,
                 Class ___, representing a ___% Class ___ Percentage Interest
                 ------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
         term is defined in Rule 144A ("Rule 144A") under the Securities Act of
         1933 (the "1933 Act") and has completed either of the forms of
         certification to that effect attached hereto as Annex 1 or Annex 2. The
         Transferee is aware that the sale to it is being made in reliance on
         Rule 144A. The Transferee is acquiring the Certificates for its own
         account or for the account of a qualified institutional buyer, and
         understands that such Certificate may be resold, pledged or transferred
         only (i) to a person reasonably believed to be a qualified
         institutional buyer that purchases for its own account or for the
         account of a qualified institutional buyer to whom notice is given that
         the resale, pledge or transfer is being made in reliance on Rule 144A,
         or (ii) pursuant to another exemption from registration under the 1933
         Act.

                  2. The Transferee has been furnished with all information
         regarding (a) the Certificates and distributions thereon, (b) the
         nature, performance and servicing of the Mortgage Loans, (c) the
         Pooling and Servicing Agreement referred to below, and (d) any credit
         enhancement mechanism associated with the Certificates, that it has
         requested.

<PAGE>

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of June 1, 2001, among Ameriquest Mortgage Securities Inc.
as Depositor, Ameriquest Mortgage Company as Master Servicer and Bankers Trust
Company of California, N.A. as Trustee, pursuant to which the Certificates were
issued.

                                      [TRANSFEREE]

                                      By:
                                         ------------------------------------
                                      Name:
                                      Title:

<PAGE>

                                                  ANNEX 1 TO EXHIBIT F-1
                                                  ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company of California, N.A. as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

         ___      CORPORATION, ETC. The Transferee is a corporation (other than
                  a bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or any
                  organization described in Section 501(c)(3) of the Internal
                  Revenue Code of 1986.

         ___      BANK. The Transferee (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

         ___      SAVINGS AND LOAN. The Transferee (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over any such institutions or is a foreign savings
                  and loan association or equivalent institution and (b) has an
                  audited net worth of at least
--------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.

<PAGE>

                  $25,000,000 as demonstrated in its latest annual financial
                  statements, A COPY OF WHICH IS ATTACHED HERETO.

         ___      BROKER-DEALER.  The Transferee is a dealer registered pursuant
                  to Section 15 of the  Securities Exchange Act of 1934.

         ___      INSURANCE COMPANY. The Transferee is an insurance company
                  whose primary and predominant business activity is the writing
                  of insurance or the reinsuring of risks underwritten by
                  insurance companies and which is subject to supervision by the
                  insurance commissioner or a similar official or agency of a
                  State, territory or the District of Columbia.

         ___      STATE OR LOCAL PLAN.  The Transferee is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

         ___      ERISA PLAN. The Transferee is an employee benefit plan within
                  the meaning of Title I of the Employee Retirement Income
                  Security Act of 1974.

         ___      INVESTMENT ADVISOR.   The Transferee is an investment advisor
                  registered under  the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.

         ___      ___   Will the Transferee be purchasing the Certificates

<PAGE>

         Yes      No     only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:

                                        Print Name of Transferee

                                        By:
                                           ----------------------------------
                                        Name:
                                        Title:

<PAGE>

                                                      ANNEX 2 TO EXHIBIT F-1
                                                      ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Bankers Trust Company of California, N.A., as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

____      The Transferee owned $___________________ in securities (other than
          the excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

____      The Transferee is part of a Family of Investment Companies which owned
          in the aggregate $______________ in securities (other than the
          excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements,

<PAGE>

(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                       Print Name of Transferee or Advisor

                                       By:
                                          -------------------------------------
                                       Name:
                                       Title:

                                       IF AN ADVISER:

                                       Print Name of Transferee

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1.   I am an executive officer of the Purchaser.

                  2.   The Purchaser is a "qualified institutional buyer",
         as defined in Rule 144A, ("Rule 144A") under the Securities Act of
         1933, as amended.

                  3.   As of the date specified below (which is not earlier than
         the last day of the Purchaser's most recent fiscal year), the amount of
         "securities", computed for purposes of Rule 144A, owned and invested on
         a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser
                 ---------------------------------------------------------------

By:      (Signature)
                    ------------------------------------------------------------

Name of Signatory
                 ---------------------------------------------------------------

Title
     ---------------------------------------------------------------------------

Date of this certificate
                        --------------------------------------------------------

Date of information provided in paragraph 3
                                           -------------------------------------

<PAGE>

                                   EXHIBIT F-2

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

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

                  ____________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly organized and
existing under the laws of ______________, the record owner of Ameriquest
Mortgage Securities Inc., Floating Rate Mortgage Pass-Through Certificates,
Series 2001-1, [Class R] (the "Class R Certificates"), on behalf of whom I make
this affidavit and agreement. Capitalized terms used but not defined herein have
the respective meanings assigned thereto in the Pooling and Servicing Agreement
pursuant to which the Class R Certificates were issued.

                  2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 2001 and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

                  3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual

<PAGE>

interest, unless no significant purpose of the transfer is to impede the
assessment or collection of tax.

                  4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

                  5. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

                  6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.

                  7. The Owner's taxpayer identification number is ____________.

                  8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

                  9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.

                  10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.

                  11.  The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.

                  12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

<PAGE>

                  13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.

                  14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.

                  15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".

                  16. The Owner is a citizen or resident of the United States, a
corporation or partnership (or other entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership or entity treated as a partnership, to the
extent provided in regulations), an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust other
than a "foreign trust" described in section 7701(a)(31) of the Code.

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200__.

                                        [OWNER]

                                        By:
                                           ---------------------------------
                                        Name:
                                        Title:   [Vice] President

ATTEST:

By:
   -----------------------------------------
Name:
Title:            [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200__.

                                        -----------------------------------
                                                   Notary Public

                                        County of
                                                  -------------------------
                                        State of
                                                 --------------------------

                                        My Commission expires:

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

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

                   _______________________________________, being duly sworn,
deposes, represents and warrants  _____________________________ as follows:

                  1.  I am a ____________________ of (the "Owner"), a
corporation duly organized and existing under the laws of ______________, on
behalf of whom I make this affidavit.

                  2. The Owner is not transferring the [Class R] (the "Residual
Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200__.

                                       [OWNER]

                                       By:
                                          ------------------------------------
                                       Name:
                                       Title:    [Vice] President

ATTEST:

By:
   -----------------------------------------
Name:
Title:            [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200__.

                                         Notary Public
                                     --------------------------

                                   County of
                                             -------------------------
                                   State of
                                            --------------------------

                                   My Commission expires:

<PAGE>

                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                _____________, 200__

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California  92705-4934

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

                 Re: Ameriquest Mortgage Securities Inc.
                     Floating Rate Mortgage Pass-Through Certificates,
                     Series 2001-1, Class [M-1], [M-2]
                     -------------------------------------------------

Dear Ladies and Gentlemen:

                  __________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2001-1, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of June 1, 2001 among Ameriquest
Mortgage Securities Inc. as depositor (the "Depositor"), Ameriquest Mortgage
Company as master servicer (the "Master Servicer") and Bankers Trust Company of
California, N.A. as trustee (the "Trustee"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned thereto in the Pooling
and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee and the Master
Servicer that the following statements in either (1) or (2) are accurate:

         _____ (1) The Certificates (i) are not being acquired by, and will not
         be transferred to, any employee benefit plan within the meaning of
         section 3(3) of the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA"), or other retirement arrangement, including
         individual retirement accounts and annuities, Keogh plans and bank
         collective investment funds and insurance company general or separate
         accounts in which such plans, accounts or arrangements are invested,
         that is subject to Section 406 of ERISA or Section 4975 of the Internal
         Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
         (ii) are not being acquired with "plan assets" of a Plan within the
         meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss.
         2510.3-101, and

<PAGE>

         (iii) will not be transferred to any entity that is deemed to be
         investing in plan assets within the meaning of the DOL regulation at
         29 C.F.R.ss.2510.3-101; or

         _____ (2) The purchase of Certificates is permissible under applicable
         law, will not constitute or result in any prohibited transaction under
         ERISA or Section 4975 of the Code, will not subject the Depositor, the
         Trustee or the Master Servicer to any obligation in addition to those
         undertaken in the Pooling and Servicing Agreement and the transferee is
         an insurance company and (A) the source of funds used to purchase such
         Certificate is an "insurance company general account" (as such term is
         defined in PTCE 95-60), (B) the conditions set forth in Sections I and
         III PTCE 95-60 have been satisfied and (C) there is no Plan with
         respect to which the amount of such general account's reserves and
         liabilities for contracts held by or on behalf of such Plan and all
         other Plans maintained by the same employer (or any "affiliate"
         thereof, as defined in PTCE 95-60) or by the same employee
         organization, exceeds 10% of the total of all reserves and liabilities
         of such general account (as determined under PTCE 95-60) as of the date
         of the acquisition of such Certificates.

                                           Very truly yours,

                                           By:
                                              --------------------------------
                                           Name:
                                           Title:

<PAGE>

                                    EXHIBIT H

                                   [RESERVED]

<PAGE>

                                    EXHIBIT I

                     FORM OF SUBSEQUENT TRANSFER INSTRUMENT

                  Pursuant to this Subsequent Transfer Instrument, dated
_______, 2001 (the "Instrument"), between Ameriquest Mortgage Securities Inc. as
seller (the "Depositor") and Bankers Trust Company of California, N.A. as
trustee (the "Trustee") of the Ameriquest Mortgage Securities Inc., Floating
Rate Mortgage Pass-Through Certificates, Series 2001-1, and pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2001 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, Ameriquest Mortgage
Company as master servicer and the Trustee as trustee, the Depositor and the
Trustee agree to the sale by the Depositor and the purchase by the Trustee on
behalf of the Trust Fund, of the Mortgage Loans listed on the attached Schedule
of Mortgage Loans (the "Subsequent Mortgage Loans").

                  Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Pooling and Servicing Agreement.

                  Section 1.        CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.

                  (a) The Depositor does hereby sell, transfer, assign, set over
and convey to the Trustee on behalf of the Trust Fund, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.

                  (b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under the Subsequent
Mortgage Loan Purchase Agreement, dated the date hereof, between the Depositor
as purchaser and the Master Servicer as originator and as seller, to the extent
of the Subsequent Mortgage Loans, a copy of which agreement is annexed hereto as
Attachment G.

                  (c)  Additional terms of the sale are set forth on
Attachment A hereto.

<PAGE>

                  Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS
                             PRECEDENT.

                  (a) The Depositor hereby confirms that each of the conditions
precedent and the representations and warranties set forth in Section 2.11 of
the Pooling and Servicing Agreement are satisfied as of the date hereof.

                  (b) All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict, the provisions of this Instrument shall control over the
conflicting provisions of the Pooling and Servicing Agreement.

                  Section 3.        RECORDATION OF INSTRUMENT.

                  To the extent permitted by applicable law, this Instrument, 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
Master Servicer at the Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.

                  Section 4.        GOVERNING LAW.

                  This Instrument shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.

                  Section 5.        COUNTERPARTS.

                  This Instrument may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.

<PAGE>

                  Section 6.        SUCCESSORS AND ASSIGNS.

                  This Instrument shall inure to the benefit of and be binding
upon the Depositor and the Trustee and their respective successors and assigns.

                                          AMERIQUEST  MORTGAGE SECURITIES INC.

                                          By:
                                             ----------------------------------
                                          Name:
                                          Title:

                                          BANKERS TRUST COMPANY
                                          OF CALIFORNIA, N.A., as Trustee

                                          By:
                                             ----------------------------------
                                          Name:
                                          Title:

ATTACHMENTS

A.       Additional terms of sale.
B.       Schedule of Subsequent Mortgage Loans.

<PAGE>

                                  ATTACHMENT A

                            ADDITIONAL TERMS OF SALE

         A.       General

                  1.       Subsequent Cut-off Date: ________, 2001
                  2.       Subsequent Transfer Date: ______ __, 2001
                  3.       Aggregate Principal Balance of the Subsequent
                           Mortgage Loans as of the Subsequent Cut-off
                           Date:  $______________
                  4.       Purchase Price:  100.00%

         B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the Subsequent Cut-off Date is true
and correct: (i) the Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date (except with respect to
1.00% of the Subsequent Mortgage Loans, by aggregate principal balance as of the
related Subsequent Cut-off Date, which may be 30 or more days delinquent but
less than 60 days delinquent as of the related Subsequent Cut-off Date); (ii)
the stated term to maturity of the Subsequent Mortgage Loan will not be less
than 358 months and will not exceed 360 months; (iii) the Subsequent Mortgage
Loan may not provide for negative amortization; (iv) the Subsequent Mortgage
Loan will not have a Loan-to-Value Ratio greater than 90.00% the Subsequent
Mortgage Loans will have as of the Subsequent Cut-off Date, a weighted average
term since origination not in excess of __ months; (vi) no Subsequent Mortgage
Loan shall have a Mortgage Rate less than 7.50% or greater than 16.00%; (vii)
the Subsequent Mortgage Loan will have been serviced by the Master Servicer
since origination or purchased by the Depositor; (viii) the Subsequent Mortgage
Loan must have a first Monthly Payment due on or before [MONTH/YEAR]; and (ix)
the Subsequent Mortgage Loan will be underwritten in accordance with the
criteria set forth under the section "The Mortgage Pool--Underwriting Standards;
Representations" in the Prospectus Supplement.

         C. Following the purchase of the Subsequent Mortgage Loans by the Trust
Fund, the Mortgage Loans (including the Subsequent Mortgage Loans) will, as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than _____% and not more than ______%; (iii) have a weighted average
Loan-to-Value Ratio of not more than ______%; (iv) have no Mortgage Loan with a
principal balance in excess of $________ and (v) have a weighted average Gross
Margin of not less than _____%, in each case, as applicable, by aggregate
principal balance of the Mortgage Loans as of the Subsequent Cut-off Date.
Notwithstanding the foregoing, any Subsequent Mortgage Loan may be rejected by
any of the Rating Agencies if the inclusion of such Subsequent Mortgage Loan
would adversely affect the ratings on any class of Offered Certificates.

<PAGE>

                                    EXHIBIT J

                             FORM OF ADDITION NOTICE

                                                   ____________, 2001

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California  92705-4934

           Re:  Pooling and Servicing Agreement, dated as of June 1, 2001,
                among Ameriquest Mortgage Securities Inc., Ameriquest
                Mortgage Company and Bankers Trust Company of California, N.A.,
                relating to Ameriquest Mortgage Securities Inc., Floating
                Rate Mortgage Pass-Through Certificates, Series 2001-1
                ---------------------------------------------------------------

Ladies and Gentlemen:

                  Pursuant to Section 2.11 of the referenced Pooling and
Servicing Agreement, Ameriquest Mortgage Securities Inc. has designated
Subsequent Mortgage Loans to be sold to the Trust Fund on ________, 2001 with an
aggregate principal balance of $_______________. Capitalized terms not otherwise
defined herein have the meaning set forth in the Pooling and Servicing
Agreement.

                  Please acknowledge your receipt of this notice by
countersigning the enclosed copy in the space indicated below and returning it
to the attention of the undersigned.

                                             Very truly yours,

                                             AMERIQUEST MORTGAGE
                                             SECURITIES INC.

                                             By:__________________________
                                             Name:
                                             Title:

Acknowledged and Agreed:

BANKERS TRUST COMPANY OF CALIFORNIA, N.A.

By:__________________________
Name:
Title:

<PAGE>

                                    EXHIBIT O

                           LOSS MITIGATION ACTION PLAN

                             Available Upon Request

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                 Filed by Paper

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                             Available Upon Request

<PAGE>

                                   SCHEDULE 3

                               PMI MORTGAGE LOANS

                             Available Upon Request

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}]]