Document:

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                                                                  EXECUTION COPY

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                      GREENPOINT MORTGAGE SECURITIES INC.,
                                    Sponsor,

                       GREENPOINT MORTGAGE FUNDING, INC.,
                                    Servicer,

                    GREENPOINT HOME EQUITY LOAN TRUST 2000-2,
                                     Issuer,

                                       and

                         BANK ONE, NATIONAL ASSOCIATION,
                                     Trustee

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

                          SALE AND SERVICING AGREEMENT

                          Dated as of September 1, 2000

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

                    Home Equity Loan Asset-Backed Securities

                                  Series 2000-2

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                                TABLE OF CONTENTS

<TABLE>
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                                                                                                               Page
                                                                                                               ----
<S>                                                                                                           <C>
ARTICLE I DEFINITIONS.............................................................................................1
       Section 1.01. Definitions..................................................................................1
       Section 1.02. Other Definitional Provisions................................................................1
       Section 1.03. Interest Calculations........................................................................2

ARTICLE II Conveyance of Mortgage Loans; Original Issuance of Securities; Tax Treatment...........................2
       Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund Advances Under Credit Line
                          Agreements..............................................................................2
       Section 2.02. Further Encumbrance of Trust Property........................................................6
       Section 2.03. Acceptance by Trustee; Certain Substitution of Mortgage Loans................................6
       Section 2.04. Representations and Warranties Regarding the Servicer and the Sponsor........................8
       Section 2.05. Representations and Warranties of the Sponsor Regarding the Mortgage Loans; Removal of
                          Certain Mortgage Loans.................................................................11
       Section 2.06. Covenants of the Sponsor....................................................................23
       Section 2.07. Removal of Mortgage Loans at Election of Issuer.............................................24
       Section 2.08. Execution and Authentication of Securities..................................................25
       Section 2.09. Tax Treatment...............................................................................25

ARTICLE III Administration and Servicing of Mortgage Loans.......................................................26
       Section 3.01. The Servicer................................................................................26
       Section 3.02. Collection of Certain Mortgage Loan Payments................................................27
       Section 3.03. Withdrawals from the Collection Account.....................................................29
       Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses...............................30
       Section 3.05. Assumption and Modification Agreements......................................................30
       Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans.............31
       Section 3.07. Trustee to Cooperate........................................................................32
       Section 3.08. Servicing Compensation; Payment of Certain Expenses by Servicer.............................33
       Section 3.09. Annual Statement as to Compliance...........................................................33
       Section 3.10. Annual Servicing Report.....................................................................33
       Section 3.11. Annual Opinion of Counsel...................................................................34
       Section 3.12. Access to Certain Documentation and Information Regarding the Mortgage Loans................34
       Section 3.13. Maintenance of Certain Servicing Insurance Policies.........................................34
       Section 3.14. Reports to the Securities and Exchange Commission...........................................35
       Section 3.15. Tax Returns.................................................................................35
       Section 3.16. Information Required by the Internal Revenue Service Generally and Reports of Foreclosures
                          and Abandonments of Mortgaged Property.................................................35
       Section 3.17. Inspection Rights; Miscellaneous............................................................36
</TABLE>

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<TABLE>
<CAPTION>
<S>                                                                                                            <C>
ARTICLE IV SERVICING CERTIFICATE.................................................................................37
       Section 4.01. Servicing Certificate.......................................................................37
       Section 4.02. Reserved....................................................................................38
       Section 4.03. The Trustee Remittance Report...............................................................38
       Section 4.04. Loan Data Remittance Report.................................................................39
       Section 4.05. Reserve Fund................................................................................39

ARTICLE V The Servicer and the Sponsor...........................................................................40
       Section 5.01. Liability of the Servicer and the Sponsor...................................................40
       Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the
                          Sponsor................................................................................40
       Section 5.03. Limitation on Liability of the Servicer and Others..........................................40
       Section 5.04. Servicer Not to Resign......................................................................41
       Section 5.05. Delegation of Duties........................................................................41
       Section 5.06. Indemnification of the Trust by the Servicer................................................41
       Section 5.07. Indemnification of the Trust by the Sponsor.................................................42
       Section 5.08. Limitation on Liability of the Sponsor......................................................42

ARTICLE VI Servicing Termination.................................................................................43
       Section 6.01. Events of Servicing Termination.............................................................43
       Section 6.02. Trustee to Act; Appointment of Successor....................................................44
       Section 6.03. Notification to Securityholders and Residual Certificateholders.............................45

ARTICLE VII Termination..........................................................................................46
       Section 7.01. Termination.................................................................................46

ARTICLE VIII Administrative Duties of the Servicer...............................................................47
       Section 8.01. Administrative Duties.......................................................................47
       Section 8.02. Records.....................................................................................49
       Section 8.03. Additional Information to be Furnished to the Issuer........................................49

ARTICLE IX Miscellaneous Provisions..............................................................................49
       Section 9.01. Amendment...................................................................................49
       Section 9.02. Recordation of Agreement....................................................................51
       Section 9.03. Limitation on Rights of Securityholders.....................................................51
       Section 9.04. Governing Law...............................................................................52
       Section 9.05. Notices.....................................................................................52
       Section 9.06. Severability of Provisions..................................................................53
       Section 9.07. Assignment..................................................................................53
       Section 9.08. Third-Party Beneficiaries...................................................................53
       Section 9.09. Counterparts................................................................................53
       Section 9.10. Effect of Headings and Table of Contents....................................................53
       Section 9.11. Insurance Agreement.........................................................................53
       Section 9.12. Nonpetition Covenant........................................................................53
</TABLE>

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                                    EXHIBITS

EXHIBIT A:  MORTGAGE LOAN SCHEDULE.......................................A-1

EXHIBIT B:  FORM OF OPINION OF COUNSEL...................................B-1

EXHIBIT C:  OFFICER'S CERTIFICATES.......................................C-1

EXHIBIT D:  FORM OF CREDIT LINE AGREEMENT................................D-1

EXHIBIT E:  FORM OF MORTGAGE NOTE (SECOND LIEN)..........................E-1

EXHIBIT F:  FORMS OF FREDDIE MAC CERTIFICATES ...........................F-1

                                      iii

<PAGE>

     SALE AND SERVICING AGREEMENT, dated as of September 1, 2000, (the
"Agreement") among GREENPOINT HOME EQUITY LOAN TRUST 2000-2, a Delaware business
trust (the "Issuer" or "Trust"), GREENPOINT MORTGAGE SECURITIES INC., a Delaware
corporation (the "Sponsor"), GREENPOINT MORTGAGE FUNDING, INC., a New York
corporation (the "Servicer"), and BANK ONE, NATIONAL ASSOCIATION (the
"Trustee").

     WHEREAS, the Issuer desires to purchase a portfolio of Mortgage Loans
arising in connection with Loan Agreements acquired by GreenPoint Mortgage
Funding, Inc.;

     WHEREAS, the Sponsor has purchased such Mortgage Loans from GreenPoint
Mortgage Funding, Inc. and is willing to sell such Mortgage Loans to the Issuer;

     WHEREAS, such Mortgage Loans consist of certain home equity revolving lines
of credit (the "HELOC Mortgage Loans") and certain second lien, closed-end
mortgage loans (the "Closed End Mortgage Loans");

     WHEREAS, the Servicer is willing to service all such Mortgage Loans;

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

                                    ARTICLE I

                                   DEFINITIONS

     Section 1.01. Definitions. All capitalized terms used in this Agreement and
not otherwise defined herein, shall have the meanings assigned thereto in Annex
A to the Pooling Agreement dated as of September 1, 2000, between the Issuer and
the Trustee, as the same may be amended and supplemented from time to time.

     Section 1.02. Other Definitional Provisions.

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

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

<PAGE>

definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.

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

     Section 1.03. Interest Calculations. All calculations of interest hereunder
that are made in respect of the Principal Balance of a Mortgage Loan shall be
made on a daily basis using a 365-day year. All calculations of interest on the
Securities shall be made on the basis of the actual number of days in an
Interest Period and a year assumed to consist of 360 days. The calculation of
the Servicing Fee shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All dollar amounts calculated hereunder shall be rounded
to the nearest penny with one-half of one penny being rounded down.

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF SECURITIES;
                                  TAX TREATMENT

     Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund
Advances Under Credit Line Agreements. (a) In consideration of the Issuer's
delivery to or upon the order of the Sponsor on the Closing Date of the net
proceeds from the sale of the Securities and Residual Certificates and the other
amounts to be distributed from time to time to the Sponsor in accordance with
the terms of this Agreement, the Sponsor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns, sets over and
otherwise conveys to the Issuer, without recourse (subject to Sections 2.03 and
2.05), all of its right, title and interest in and to (i) each Mortgage Loan,
including its Principal Balance (including any Additional Balances related
thereto) and all collections in respect thereof received after the Cut-Off Date
(excluding Interest Collection due on or prior to the Cut-Off Date); (ii)
property that secured a Mortgage Loan that is acquired by foreclosure or deed in
lieu of foreclosure; (iii) all of the Sponsor's rights under the Purchase
Agreement (including all representations and warranties of the Servicer
contained therein); (iv) the Sponsor's rights under the hazard insurance
policies; (v) the Reserve Fund; (vi) the Policy; (vii) the Demand Note; and
(viii) any proceeds of the foregoing and all other assets included or to be
included in the Trust for the benefit of Securityholders and the Residual
Certificateholders, the Insurer and Freddie Mac; provided, however, neither the
Trustee nor the Trust assumes the obligation under any Credit Line Agreement
that provides for the funding of future advances to the Mortgagor thereunder,
and neither the Trust nor the Trustee shall be obligated or permitted to fund
any such future advances. With respect to the HELOC Mortgage Loans, Additional
Balances shall be part of the related Principal Balance and are hereby
transferred to the Trust on the Closing Date pursuant to this Section 2.01, and
therefore part of the Trust Property. On or prior to the Closing Date, the
Sponsor shall cause the Insurer to deliver the Policy to the Trustee for the
benefit of the Securityholders. It is the intention of the Sponsor that the
transfer and assignment contemplated

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by this Agreement shall constitute a sale of the Mortgage Loans and other Trust
Property from the Sponsor to the Issuer and that such sale should constitute a
valid transfer and assignment of the Mortgage Loans and other Trust Property to
the Issuer and the beneficial interest in and title to the Mortgage Loans and
the other Trust Property shall not be part of the Sponsor's estate in the event
of the filing of a bankruptcy petition by or against the Sponsor under any
bankruptcy law. In the event that, notwithstanding the intent of the Sponsor,
the transfer and assignment contemplated hereby is held not to be a sale, this
Agreement shall constitute a grant of a security interest in the property
referred to in this Section 2.01 for the benefit of the Securityholders, the
Residual Certificateholders, the Insurer and Freddie Mac. To the extent that the
fair market value of any Additional Balance is greater than the cash
consideration paid by the Issuer for such Additional Balance, the difference
between such fair market value and the amount of such cash consideration shall
be deemed to be a capital contribution made to the Issuer by the Sponsor.

     (b) Each of the Servicer and the Sponsor agrees to take or cause to be
taken such actions and execute such documents (including, without limitation,
the filing of all necessary continuation statements for the UCC-1 financing
statements filed in the States of California and Delaware, respectively, which
shall have been filed on or as of the Closing Date) describing the Cut-Off Date
Principal Balances and Additional Balances and naming (i) the Servicer as debtor
and the Sponsor as secured party, and (ii) the Sponsor as debtor and the Issuer
as secured party and any amendments to UCC-1 financing statements required to
reflect a change in the name or corporate structure of the Servicer or the
Sponsor or the filing of any additional UCC-1 financing statements due to the
change in the principal office of the Servicer or the Sponsor (within 10 days of
any event necessitating such filing) as are necessary to perfect and protect the
Securityholders', Insurer's and Freddie Mac's interests in each Cut-Off Date
Principal Balance and Additional Balance and the proceeds thereof (other than
maintaining possession by the Trustee of the Mortgage Loans and the Mortgage
Files).

     (c) In connection with such transfer and assignment, the Servicer shall
deliver to the Trustee the following documents or instruments (each a "Related
Document" and together for each Mortgage Loan, the "Mortgage File") with respect
to each Mortgage Loan on the Closing Date:

          (i) with respect to any Closed-End Mortgage Loan, the original
     Mortgage Note endorsed in blank or endorsed with the following: "Bank One
     National Association as Trustee for the GreenPoint Home Equity Loan Trust
     2000-2", and with respect to any HELOC Mortgage Loan, the original Credit
     Line Agreement;

          (ii) an original Assignment of Mortgage in blank in recordable form;

          (iii) the original recorded Mortgage or, if, in connection with any
     Mortgage Loan, the original recorded Mortgage with evidence of recording
     thereon cannot be delivered on or prior to the Closing Date because of a
     delay caused by the public recording office where such original Mortgage
     has been delivered for recordation or because such original Mortgage has
     been lost, the Sponsor shall deliver or cause to be delivered to the
     Trustee, a true and correct copy of such Mortgage, together with (i) in the
     case of a delay caused by the public recording office, an Officer's
     Certificate of the Sponsor stating that such original Mortgage has been
     dispatched to the appropriate public

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     recording official or (ii) in the case of an original Mortgage that has
     been lost, a certificate by the appropriate county recording office where
     such Mortgage is recorded;

          (iv) if applicable, the original intervening assignments, if any
     ("Intervening Assignments"), with evidence of recording thereon, showing a
     complete chain of title to the Mortgage from the originator to the Trustee
     or, if any such original Intervening Assignment has not been returned from
     the applicable recording office or has been lost, a true and correct copy
     thereof, together with (i) in the case of a delay caused by the public
     recording office, an Officer's Certificate of the Sponsor stating that such
     original Intervening Assignment has been dispatched to the appropriate
     public recording official for recordation or (ii) in the case of an
     original Intervening Assignment that has been lost, a certificate by the
     appropriate county recording office where such Mortgage is recorded;

          (v) either a title policy, a title search or guaranty title with
     respect to the related Mortgaged Property;

          (vi) the original of any guaranty executed in connection with the
     Mortgage Note;

          (vii) the original of each assumption, modification, consolidation or
     substitution agreement, if any, relating to the Mortgage Loans; and

          (viii) any security agreement, chattel mortgage or equivalent
     instrument executed in connection with the Mortgage.

     The Sponsor hereby confirms to the Trustee that it has caused the portions
of the Electronic Ledgers relating to the Mortgage Loans as of the Closing Date
to be clearly and unambiguously marked, and has made, or will make, the
appropriate entries in its general accounting records to indicate that such
Mortgage Loans have been transferred to the Trust. The Servicer hereby confirms
to the Trustee that it has clearly and unambiguously made appropriate entries in
its general accounting records indicating that such Mortgage Loans constitute
part of the Trust and are serviced by it on behalf of the Trust in accordance
with the terms hereof.

     (d) Notwithstanding the characterization of the Securities as debt for
Federal, state and local income and franchise tax purposes, the parties hereto
intend to treat the transfer of the Mortgage Loans to the Trust as provided
herein as a sale, for certain non-tax purposes, of all the Sponsor's right,
title and interest in and to the Mortgage Loans, whether now existing or
hereafter created, and the other property described above and all proceeds
thereof. In the event such transfer is deemed not to be a sale for such
purposes, the Sponsor grants to the Trust, a security interest in all of such
party's right, title and interest in, to and under the Mortgage Loans, whether
now existing or hereafter created, and the other property described above and
all proceeds thereof; and this Agreement shall constitute a security agreement
under applicable law.

     (e) Within 90 days following delivery of the Mortgage Files to the Trustee
pursuant to this Section, the Trustee shall review each such Mortgage File to
ascertain that all required documents set forth in this Section 2.01 have been
executed and received, and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule and in so doing the Trustee may rely on
the purported due execution and genuineness of any signature

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thereon. If within such 90-day period the Trustee finds any document
constituting a part of a Mortgage File not to have been executed or received or
to be unrelated to the Mortgage Loans identified in said Mortgage Loan Schedule
or, if in the course of its review, the Trustee determines that such Mortgage
File is otherwise defective in any material respect, the Trustee shall promptly
upon the conclusion of its review notify the Sponsor, the Insurer and Freddie
Mac, and the Sponsor shall have a period of 90 days after such notice within
which to correct or cure any such defect.

     The Trustee shall have no responsibility for reviewing any Mortgage File
except as expressly provided in this Section 2.01. In reviewing any Mortgage
File pursuant to this Section, the Trustee shall have no responsibility for
determining whether any document is valid and binding, whether the text of any
assignment or endorsement is in proper or recordable form (except, if
applicable, to determine if the Trustee is the assignee or endorsee), whether
any document has been recorded in accordance with the requirements of any
applicable jurisdiction, or whether a blanket assignment is permitted in any
applicable jurisdiction, whether any Person executing any document is authorized
to do so or whether any signature thereon is genuine, but shall only be required
to determine whether a document has been executed, that it appears to be what it
purports to be, and, where applicable, that it purports to be recorded.

     (f) The Sponsor shall take all necessary steps to prepare and submit for
recordation an Assignment or Mortgage in the name of the Trustee for each
Mortgage Loan within 30 days after the Closing Date.

     (g) The Sponsor shall sell, assign, transfer, set over and otherwise convey
without recourse to the Trustee all right, title and interest of the Sponsor in
and to any Eligible Substitute Mortgage Loan delivered to the Trustee on behalf
of the Trust by the Sponsor pursuant to Section 2.03 or Section 2.05 hereof and
all its right, title and interest to principal collected and interest accruing
on such Eligible Substitute Mortgage Loan on and after the applicable Substitute
Cut-Off Date; provided, however, that the Sponsor shall reserve and retain all
right, title and interest in and to payments of interest due on such Eligible
Substitute Mortgage Loan prior to the applicable Substitute Cut-Off Date;
provided, further, that neither the Trust nor the Trustee shall be obligated to
fund any future advances to the related Mortgagor under such Eligible Substitute
Mortgage Loan.

     In connection with any transfer and assignment of an Eligible Substitute
Mortgage Loan to the Trustee on behalf of the Trust, the Sponsor agrees to cause
to be delivered to the Trustee the items described in Section 2.01(c) on the
date of such transfer and assignment or, if a later delivery time is permitted
by Section 2.01(c), then no later than such later delivery time.

     (h) Each Defective Mortgage Loan that is required to be repurchased or
substituted pursuant to the provisions this Agreement or the Purchase Agreement
shall, upon such repurchase or substitution in accordance with the provisions
hereof, be released from the Trust and from the lien created by the Pooling
Agreement. As to each Mortgage Loan released from the Trust in connection with
the repurchase thereof or the conveyance of an Eligible Substitute Mortgage Loan
therefor, the Trustee will transfer, assign, set over and otherwise convey
without recourse, to or upon the order of the Sponsor, all of its right, title
and interest in and to such released Mortgage Loan and all the Trust's right
title and interest to principal collected and

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<PAGE>

interest accruing on such released Mortgage Loan on and after the first day of
the calendar month in which such Mortgage Loan is released; provided, however,
that the Trust shall reserve and retain all right, title and interest in and to
payments of principal and interest collected on such released Mortgage Loan
prior to such date.

     Section 2.02. Further Encumbrance of Trust Property.

     (a) Immediately upon the conveyance to the Trust by the Sponsor of any item
of the Trust Property pursuant to Section 2.01, all right, title and interest of
the Sponsor in and to such item of Trust Property shall terminate, and all such
right, title and interest shall vest in the Trust, in accordance with the Trust
Agreement and Sections 3802 and 3805 of the Delaware Business Trust Act (12 Del.
Code, ss. 3801 et seq.).

     (b) Immediately upon the vesting of the Trust Property in the Trust, the
Trust shall have the sole right to pledge or otherwise encumber, such Trust
Property. Pursuant to the Pooling Agreement and contemporaneously with such
property vesting in the Trust pursuant to (a) above, the Trust shall grant a
security interest in the Trust Property to secure the repayment of the
Securities. The Residual Certificates shall represent the beneficial ownership
interest in the Trust Property, and the Residual Certificateholders shall be
entitled to receive distributions with respect thereto as set forth herein.

     (c) Prior to the payment in full on the Securities, the payment of all
amounts due to the Insurer under the Insurance Agreement, the payment of all
amounts due Freddie Mac under the Pooling Agreement, the termination of the
Policy (as defined therein) and the surrender of the Policy by the Trustee to
the Insurer, the Trustee shall hold the Trust Property on behalf of the
Securityholders, the Insurer and Freddie Mac. Following the payment in full of
the Securities and the release and discharge of the Pooling Agreement, all
covenants of the Issuer under Article III of the Pooling Agreement shall, until
payment in full of the Residual Certificates, remain as covenants of the Issuer
for the benefit of the Residual Certificateholders, enforceable by the Residual
Certificateholders to the same extent as such covenants were enforceable by the
Securityholders prior to the discharge of the Pooling Agreement. Any rights of
the Trustee under Article III of the Pooling Agreement, following the discharge
of the Pooling Agreement, shall vest in the Residual Certificateholders.

     Section 2.03. Acceptance by Trustee; Certain Substitution of Mortgage
Loans.

     (a) The Trustee shall, at such time as there are no Securities outstanding
and all sums due to (i) the Trustee or any agent or counsel thereof pursuant to
the Pooling Agreement, (ii) the Trustee pursuant to this Agreement and (iii) the
Insurer pursuant to the Insurance Agreement and Freddie Mac pursuant to the
Pooling Agreement have been paid, release any remaining portion of the Trust
Property to the Sponsor; provided, that the release of the Reserve Fund is
subject to Section 2.05 of the Insurance Agreement.

     (b) The Trust hereby acknowledges its receipt of the Policy and the
Mortgage Loans, and declares that the Trustee holds and will hold such
instrument, and to the extent that any documents are delivered to it pursuant to
Section 2.01, will hold such documents, and all amounts received by it
thereunder and hereunder, in trust, upon the terms herein set forth, for the

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use and benefit of all present and future Securityholders, the Insurer and
Freddie Mac. If the time to cure any defect in respect of any Mortgage Loan of
which the Trustee has notified the Sponsor following the review pursuant to
Section 2.01 has expired or if at any time any loss is suffered by the Trustee
on behalf of the Securityholders, the Insurer or Freddie Mac, in respect of any
Mortgage Loan as a result of (i) a defect in any document constituting a part of
its Mortgage File or (ii) an Assignment of Mortgage to the Trustee not having
been recorded as required by Section 2.01, then on the next succeeding Business
Day, the Trustee shall (i) substitute in lieu of such Mortgage Loan all Eligible
Substitute Mortgage Loans and, deliver the Substitution Amount applicable
thereto to the Servicer for deposit in the Collection Account or (ii) purchase
such Mortgage Loan at a purchase price equal to the Loan Purchase Price thereof,
which purchase price shall be delivered to the Servicer for deposit in the
Collection Account. Upon receipt of any Mortgage Loan or of written notification
signed by a Servicing Officer to the effect that the Loan Purchase Price in
respect of a Defective Mortgage Loan has been deposited into the Collection
Account, then as promptly as practicable, the Trustee shall execute such
documents and instruments of transfer presented by the Sponsor, in each case
without recourse, representation or warranty, and take such other actions as
shall reasonably be requested by the Sponsor to effect such transfer by the
Trust of such Defective Mortgage Loan pursuant to this Section. It is understood
and agreed that the obligation of the Sponsor to accept a transfer of a
Defective Mortgage Loan and to either convey an Eligible Substitute Mortgage
Loan or to make a deposit of any related Loan Purchase Price into the Collection
Account shall constitute the sole remedy respecting such defect available to
Securityholders and the Trustee against the Sponsor.

     (c) As to any Eligible Substitute Mortgage Loan, the Sponsor shall, if
required to deliver any such Eligible Substitute Mortgage Loan, deliver to the
Trustee with respect to such Eligible Substitute Mortgage Loan such documents
and agreements as are required to be held by the Trustee in accordance with
Section 2.01. For any Collection Period during which the Sponsor substitutes one
or more Eligible Substitute Mortgage Loan, the Servicer shall determine the
Substitution Amount which amount shall be deposited by the Sponsor in the
Collection Account at the time of substitution. All amounts received in respect
of the Eligible Substitute Mortgage Loan during the Collection Period in which
the circumstances giving rise to such substitution occur shall not be a part of
the Trust and shall not be deposited by the Servicer in the Collection Account.
All amounts received by the Servicer during the Collection Period in which the
circumstances giving rise to such substitution occur in respect of any Defective
Mortgage Loan so removed by the Trust shall be deposited by the Servicer in the
Collection Account. Upon such substitution, the Eligible Substitute Mortgage
Loan shall be subject to the terms of this Agreement in all respects, and the
Sponsor shall be deemed (i) to have made with respect to such Eligible
Substitute Mortgage Loan as of the date of substitution, the covenants,
representations and warranties set forth in Section 2.05 and (ii) to have
certified that such Mortgage Loan is an Eligible Substitute Mortgage Loan. The
procedures applied by the Sponsor in selecting each Eligible Substitute Mortgage
Loan shall not be materially adverse to the interests of the Trustee, the
Securityholders, the Insurer or Freddie Mac.

     The Servicer, promptly following the transfer of a Defective Mortgage Loan
from, or an Eligible Substitute Mortgage Loan to, the Trust pursuant to this
Section, shall amend the Mortgage Loan Schedule and make appropriate entries in
its general account records to reflect such transfer. The Servicer shall,
following such transfer, appropriately mark its records to indicate that it is
no longer servicing such Mortgage Loan on behalf of the Trust. The Sponsor,

                                       7
<PAGE>

promptly following such transfer, shall appropriately mark its Electronic Ledger
and make appropriate entries in its general account records to reflect such
transfer.

     (d)   On or prior to 30 days from the Closing Date (the "Addition Date"),
           the Sponsor may add or remove Mortgage Loans from Pool I or Pool II
           provided that:

     (i)   the removal with respect to either Pool I or Pool II does not result
           in a reduction in the Pool I Principal Balance as of the Cut-Off Date
           below $273,100,000 or a reduction in the Pool II Principal Balance as
           of the Cut-Off Date below $76,900,000;

     (ii)  each added Mortgage Loan is an Eligible Substitute Mortgage Loan;

     (iii) such addition or removal does not result in a downgrade or withdrawal
           of the rating of the Securities or the shadow rating with respect to
           either Pool; and

     (iv)  Freddie Mac and the Insurer shall have approved each such addition or
           removal.

     In the event that on the Addition Date, the Pool I Balance on the Cut-off
Date is less than the Initial Pool I Balance, then on the Addition Date, the
Seller will deposit cash into the Collection Account on the Addition Date equal
to the deficiency.

     Section 2.04. Representations and Warranties Regarding the Servicer and the
Sponsor.

     (a) The Servicer represents and warrants to the Trustee, the Insurer and
Freddie Mac that as of (i) the Closing Date and (ii) each date on which any
Mortgage Loans are transferred from the Sponsor to the Issuer pursuant to
Article II hereof (including transfers made pursuant to Section 2.03(d) hereof):

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

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

                                       8
<PAGE>

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

       (iv) The execution, delivery and performance of this Agreement by the
     Servicer will not violate any provision of any existing law or regulation
     or any order or decree of any court applicable to the Servicer or any
     provision of the Certificate of Incorporation or Bylaws of the Servicer, or
     constitute a material breach of any mortgage, Pooling Agreement, contract
     or other agreement to which the Servicer is a party or by which the
     Servicer may be bound;

       (v) No litigation or administrative proceeding of or before any court,
     tribunal or governmental body is currently pending, or to the knowledge of
     the Servicer threatened, against the Servicer or any of its properties or
     with respect to this Agreement or the Securities; and

       (vi) The Servicer is solvent and will not be rendered insolvent by the
     transactions described herein and, after giving effect to the transactions
     described herein, will not be left with an unreasonably small amount of
     capital with which to engage in the ordinary course of its business and the
     Servicer does not intend to incur, nor does the Servicer believe that it
     has incurred, debts beyond its ability to pay as they mature. The Servicer
     does not contemplate the commencement of insolvency, liquidation or
     consolidation proceedings or the appointment of a receiver, liquidator,
     conservator, trustee or similar official in respect of the Servicer or any
     of its respective assets.

The representations and warranties set forth in this Section 2.04(a) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Securityholders, the Insurer or Freddie
Mac, the person discovering such breach shall give written notice within five
(5) days of discovery to the other parties, the Insurer and Freddie Mac. Within
90 days of its discovery or its receipt of notice of breach, or, with the prior
written consent of a Responsible Officer of the Trustee and the Controlling
Party, such longer period specified in such consent, the Servicer shall cure
such breach in all material respects.

     (b) The Sponsor represents and warrants to the Trustee, the Insurer and
Freddie Mac that as of (i) the Closing Date and (ii) each date on which any
Mortgage Loans are transferred from the Sponsor to the Issuer pursuant to
Article II hereof (including transfers made pursuant to Section 2.03(d) hereof):

       (i) The Sponsor is a Delaware corporation, validly existing and in good
     standing under the laws of the State of Delaware, and has the statutory
     power to own its assets and to transact the business in which it is
     currently engaged. The Sponsor is duly qualified to do business as a
     foreign limited liability company and is in good standing in each
     jurisdiction in which the character of the business transacted by it or any
     properties

                                       9
<PAGE>

     owned or leased by it requires such qualification and in which the failure
     so to qualify would have a material adverse effect on the business,
     properties, assets, or condition (financial or other) of the Sponsor;

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

       (iii) The Sponsor is not required to obtain the consent of any other
     party or any consent, license, approval or authorization from, or
     registration or declaration with, any governmental authority, bureau or
     agency in connection with the execution, delivery, performance, validity
     or enforceability of this Agreement;

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

       (v) No litigation or administrative proceeding of or before any court,
     tribunal or governmental body is currently pending, or to the knowledge of
     the Sponsor threatened, against the Sponsor or any of its properties or
     with respect to this Agreement or the Securities; and

       (vi) The Sponsor is solvent and will not be rendered insolvent by the
     transactions described herein and, after giving effect to the transactions
     described herein, will not be left with an unreasonably small amount of
     capital with which to engage in the ordinary course of its business and the
     Sponsor does not intend to incur, nor does the Sponsor believe that it has
     incurred, debts beyond its ability to pay as they mature. The Sponsor does
     not contemplate the commencement of insolvency, liquidation or
     consolidation proceedings or the appointment of a receiver, liquidator,
     conservator, trustee or similar official in respect of the Sponsor or any
     of its respective assets..

The representations and warranties set forth in this Section 2.04(b) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Securityholders, the Insurer or Freddie
Mac, the person discovering such breach shall give prompt written notice to the
other parties, the Insurer, and Freddie Mac. Within 90 days of its discovery or
its receipt of notice of breach, or, with the prior written consent of a
Responsible Officer of the Trustee and the Controlling Party, such longer period
specified in such consent, the Sponsor shall cure such breach in all material
respects.

                                       10
<PAGE>

     Section 2.05. Representations and Warranties of the Sponsor Regarding the
Mortgage Loans; Removal of Certain Mortgage Loans.

     (a) The Sponsor hereby makes the following representations and warranties
on which the Issuer is deemed to have relied in acquiring the Mortgage Loans and
upon which the Insurer is deemed to rely in issuing the Policy, and upon which
Freddie Mac is deemed to have relied as well. Such representations and
warranties speak as of the execution and delivery of this Agreement, as of the
Closing Date and as of the applicable Transfer Date with respect to the Mortgage
Loans, but shall survive the sale, transfer, and assignment of the Mortgage
Loans to the Issuer and the pledge thereof to the Trustee pursuant to the
Pooling Agreement,

       (i) As of the Closing Date with respect to the Mortgage Loans and as of
     the related Transfer Date with respect to any Eligible Substitute Mortgage
     Loans and with respect to any HELOC Mortgage Loan, as of the date any
     Additional Balance is created, the information set forth in the Mortgage
     Loan Schedule for such Mortgage Loans is true and correct in all material
     respects;

       (ii) Each Mortgage Loan is being serviced by the Servicer;

       (iii) The applicable Cut-Off Date Principal Balance has not been assigned
     or pledged, and the Sponsor is the sole owner and holder of such Cut-Off
     Date Principal Balance free and clear of any and all liens, claims,
     encumbrances, participation interests, equities, pledges, charges or
     security interests of any nature, and has full right and authority, under
     all governmental and regulatory bodies having jurisdiction over the
     ownership of the applicable Mortgage Loans, to sell, assign or transfer the
     same pursuant to this Agreement, and upon its acquisition of the Mortgage
     Loans, the Trust will be the sole owner of the Cut-Off Date Principal
     Balance free and clear of any and all liens claims, encumbrances,
     participating interests, equities, pledges, charges, or security interests
     of any nature;

       (iv) Except with respect to liens released immediately prior to the
     transfer herein contemplated, each Credit Line Agreement and each Mortgage
     Note and related Mortgage has not been assigned or pledged and immediately
     prior to the transfer and assignment herein contemplated, the Sponsor held
     good, marketable and indefeasible title to, and was the sole owner and
     holder of, each Mortgage Loan subject to no liens, charges, mortgages,
     claims, participation interests, equities, pledges or security interests of
     any nature, encumbrances or rights of others (collectively, a "Lien"); the
     Sponsor has full right and authority under all governmental and regulatory
     bodies having jurisdiction over the Sponsor, subject to no interest or
     participation of, or agreement with, any party, to sell and assign the same
     pursuant to this Agreement; and immediately upon the transfers and
     assignments herein contemplated, the Sponsor shall have transferred all of
     its right, title and interest in and to each Mortgage Loan and the Trust
     will hold good, marketable and indefeasible title, to, and be the sole
     owner of, each Mortgage Loan subject to no Liens;

       (v) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, the

                                       11
<PAGE>

     related Mortgage is a valid and subsisting first or second lien, as set
     forth on the Mortgage Loan Schedule with respect to each related Mortgaged
     Property, and as of the applicable Cut-Off Date the related Mortgaged
     Property is free and clear of all encumbrances and liens having priority
     over the first or second lien, as applicable, of such Mortgage except for
     liens for (i) real estate taxes and special assessments not yet delinquent;
     (ii) any first mortgage loan secured by such Mortgaged Property and
     specified on the Mortgage Loan Schedule; (iii) covenants, conditions and
     restrictions, rights of way, easements and other matters of public record
     as of the date of recording that are acceptable to mortgage lending
     institutions generally or specifically reflected in the appraisals; and
     (iv) 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) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, there is no valid right of rescission offset, defense (including the
     defense of usury) or counterclaim of any obligor under any Loan Agreement
     or Mortgage;

       (vii) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, there is no delinquent recording or other tax or fee or assessment
     lien against any related Mortgaged Property;

       (viii) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, there is no proceeding pending or threatened for the total or
     partial condemnation of any Mortgaged Property, nor is such a proceeding
     currently occurring, and such property is in good repair and is undamaged
     by waste, fire, earthquake or earth movement, windstorm, flood, tornado or
     other casualty, so as to affect adversely the value of the Mortgaged
     Property as security for the Mortgage Loan or the use for which the
     premises were intended;

       (ix) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, there are no mechanics' or similar liens or claims which have been
     filed for work, labor or material affecting the related Mortgaged Property
     which are, or may be, liens prior or equal to the lien of the related
     Mortgage, except liens which are fully insured against by the title
     insurance policy or other title protection referred to in clause (xiv);

       (x) No Minimum Monthly Payment is more than 59 days delinquent (measured
     on a contractual basis);

       (xi) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, for each Mortgage Loan, the related Mortgage File contains each of
     the documents and instruments specified to be included therein and such
     Mortgage File has been delivered to the Trustee;

                                       12
<PAGE>

       (xii) The related Loan Agreement and the related Mortgage at origination
     complied in all material respects with applicable state and federal laws
     and regulations, including, without limitation, usury, truth-in-lending,
     real estate settlement procedures, consumer credit protection, equal credit
     opportunity, recording or disclosure laws applicable to the Mortgage Loans
     and consummation of the transactions contemplated hereby, including without
     limitation the receipt of interest, will not involve the violation or such
     laws;

       (xiii) On the Closing Date with respect to the Mortgage Loans and to the
     extent not already included in such filing, on the applicable Transfer Date
     with respect to any Eligible Substitute Mortgage Loans, the Sponsor has
     filed UCC-1 financing statements with respect to such Mortgage Loans;

       (xiv) A lender's policy of title insurance, expressClose.com lender
     master protection program (standard mortgage guaranty) or a commitment
     (binder) to issue the same or an attorney's certificate or opinion of
     title was effective on the date of the origination of each mortgage loan
     and each such policy or certificate or opinion of title is valid and
     remains in full force and effect;

       (xv) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, none of the Mortgaged Properties is a mobile home or a manufactured
     housing unit;

       (xvi) As of the Cut-Off Date for the Mortgage Loans no more than (a)
     0.83% of the Pool I Mortgage Loans (by Pool I Balance), or (b) 2.58% of the
     Pool II Mortgage Loans (by Pool II Balance) are secured by Mortgaged
     Properties located in one United States postal zip code;

       (xvii) The Combined Loan-to-Value Ratio for each Pool I Mortgage Loan was
     not in excess of 100% and the Combined Loan-to-Value Ratio for each Pool II
     Mortgage Loan was not in excess of 100%;

       (xviii) Each Pool I Mortgage Loan conforms to all applicable loan
     origination standards with respect to loan balances as of the date of
     origination set forth by Freddie Mac.

       (xix) No selection procedure reasonably believed by the Sponsor to be
     adverse to the interests of the Securityholders, the Insurer or Freddie Mac
     was utilized in selecting the Mortgage Loans for sale to the Trust,
     provided, however, that the Mortgage Loans were selected from the pool of
     Mortgage Loans originated in connection with the Servicer's mortgage loan
     origination program;

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

       (xxi) The Minimum Monthly Payment with respect to any Mortgage Loan is
     not less than the interest accrued at the applicable Loan Rate on the
     average daily

                                       13
<PAGE>

     Principal Balance during the interest period relating to the date on which
     such Minimum Monthly Payment is due;

       (xxii) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, each Loan Agreement and each Mortgage Loan is genuine and is a
     legal, valid and binding obligation and is an enforceable obligation of the
     related Mortgagor, except as the enforceability thereof may be limited by
     the bankruptcy, insolvency or similar laws affecting creditors' rights
     generally;

       (xxiii) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, there has been no default, breach, violation or event of
     acceleration of any senior mortgage loan related to a Mortgaged Property
     that has not been cured by a party other than the Servicer;

       (xxiv) The terms of each Mortgage Note and each Mortgage have not been
     impaired, altered or modified in any respect, except by a written
     instrument which (if such instrument is secured by real property) has been
     recorded, if necessary, to protect the interest of the Securityholders and
     which has been delivered to the Trustee. The substance of any such
     alteration or modification is reflected on the related Mortgage Loan
     Schedule and has been approved by the primary mortgage guaranty insurer, if
     any;

       (xxv) The definition of "prime rate" in each Credit Line Agreement
     relating to a HELOC Mortgage Loan does not differ materially from the
     definition in the form of Credit Line Agreement in Exhibit D;

       (xxvi) The weighted average remaining term to maturity of the Pool I
     Mortgage Loans on a contractual basis as of the related Cut-Off Date is
     approximately 205 months and for the Pool II Mortgage Loans is
     approximately 203 months. On each date that the Loan Rates relating to
     HELOC Mortgage Loans have been adjusted, interest rate adjustments on the
     HELOC Mortgage Loans were made in compliance with the related Mortgages and
     Credit Line Agreement and applicable law. Over the term of each HELOC
     Mortgage Loan, the Loan Rate may not exceed the related Loan Rate Cap, if
     any. With respect to the Pool I HELOC Mortgage Loans, the weighted average
     Loan Rate Cap is approximately 18.00%. With respect to the Pool II HELOC
     Mortgage Loans, the weighted average Loan Rate Cap is approximately 18.00%.
     With respect to the Pool I HELOC Mortgage Loans, the margins range between
     0.00% and 8.00% and the weighted average margin is approximately 2.96% as
     of the related Cut-Off Date. With respect to the Pool II HELOC Mortgage
     Loans, the margins range between 0.00% and 6.52% and the weighted average
     margin is approximately 3.01% as of the related Cut-Off Date. The Loan
     Rates on the Pool I Mortgage Loans range between 2.48% and 16.27%, the Loan
     Rates on the Pool II Mortgage Loans range between 5.85% and 16.02% and the
     weighted average Loan Rate is approximately 9.15% for Pool I and 9.95% for
     Pool II;

       (xxvii) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loans, each

                                       14
<PAGE>

     Mortgaged Property consists of a single parcel of real property with a
     one-to-four unit single family residence erected thereon, or an individual
     condominium unit, planned unit development unit or townhouse;

       (xxviii) No more than 27.91% (by Pool I Balance) of the Pool I Mortgage
     Loans are secured by real property improved by individual condominium
     units, planned development units or two-to-four family residences erected
     thereon, and approximately 72.09% (by Pool I Balance) of the Pool I
     Mortgage Loans are secured by real property with a one-family residence
     erected thereon. No more than 28.89% (by Pool II Balance) of the Pool II
     Mortgage Loans are secured by real property improved by individual
     condominium units, planned development units or two-to-four family
     residences erected thereon, and approximately 71.11% (by Pool II Balance)
     of the Pool II Mortgage Loans are secured by real property with a
     one-family residence erected thereon;

       (xxix) Each Mortgage Note evidencing a Closed End Mortgage Loan is
     comprised of one original promissory note and each such promissory note
     constitutes an "instrument" for purposes of Section 9-105(1)(i) of the UCC.
     There is no obligation on the part of the Sponsor or any other party to
     make payments in addition to those made by the Mortgagor with respect to
     the Closed End Mortgage Loans;

       (xxx) The Credit Limits on the Pool I HELOC Mortgage Loans range between
     $7,500.00 and $316,000.00 with an average of approximately $66,400.00. The
     Credit Limits on the Pool II HELOC Mortgage Loans range between $3,800.00
     and $700,000.00 with an average of approximately $99,760.00. The Principal
     Balances on the Pool I HELOC Mortgage Loans range between $0 and
     $280,197.00 with an average of approximately $50,800.00. The Principal
     Balances on the Pool II HELOC Mortgage Loans range between $0 and
     $700,000.00 with an average of approximately $63,000.00. The Principal
     Balances on the Pool I Closed End Mortgage Loans range between $9,900.00
     and $125,000.00 with an average of approximately $41,000.00. The average
     Credit Limit Utilization Rate (weighted by credit line) of the Pool I HELOC
     Mortgage Loans is approximately 76.96% and of the Pool II HELOC Mortgage
     Loans is approximately 69.42%;

       (xxxi) Substantially all of the Mortgage Loans are second liens, and
     either (A) no consent for each Mortgage Loan was required by the holder of
     the related senior lien, if any, prior to the making of such Mortgage Loan
     or (B) such consent has been obtained and is contained in the related
     Mortgage File;

       (xxxii) This Agreement constitutes a valid transfer and assignment to the
     Trust of all right, title and interest of the Sponsor in and to the Cut-Off
     Date Principal Balances with respect to the applicable Mortgage Loans, all
     monies due or to become due with respect thereto and all proceeds of such
     Cut-Off Date Principal Balances with respect to the Mortgage Loans and such
     funds as are from time to time deposited in the Collection Account
     (excluding any investment earnings thereon) and all other property
     specified in the definition of "Trust" as being part of the corpus of the
     Trust conveyed to the Trust, and upon payment for the Additional Balances,
     will constitute a valid transfer and assignment to the Trustee of all
     right, title and interest of the Sponsor in and to the

                                       15
<PAGE>

     Additional Balances, all monies due or to become due with respect thereto,
     and all proceeds of such Additional Balances and all other property
     specified in the definition of "Trust" relating to the Additional Balances;

       (xxxiii) As of the Closing Date, no Mortgage Loan is the subject of
     foreclosure proceedings and, to the best of the Sponsor's knowledge, no
     obligor of any of the Mortgage Loans has filed for bankruptcy protection;

       (xxxiv) The proceeds of each Closed End Mortgage Loan have been fully
     disbursed, and there is no obligation on the part of the mortgagee to make
     future advances thereunder. Any and all requirements as to completion of
     any on-site or off-site improvements and as to disbursements of any escrow
     funds therefor have been complied with. All costs, fees and expenses
     incurred in making or closing or recording such Closed End Mortgage Loans
     were paid;

       (xxxv) Each Mortgage contains customary and enforceable provisions which
     render the rights and remedies of the holder thereof adequate for the
     realization against the related Mortgaged Property of the benefits of the
     security, including (A) in the case of a Mortgage designated as a deed of
     trust, by trustee's sale and (B) otherwise by judicial foreclosure. Subject
     to applicable state law, there is no homestead or other exemption available
     to the Mortgagor which would materially interfere with the rights to sell
     the Mortgaged Property at a trustee's sale or the right to foreclose upon
     the related Mortgage;

       (xxxvi) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loan, except for events permissible under Section 2.05(a)(x) of this
     Agreement, there is no default, breach, violation or event of acceleration
     existing under any Mortgage or the related Mortgage Note and no event
     which, with the passage of time or with notice and the expiration of any
     grace or cure period, would constitute a default, breach, violation or
     event of acceleration; and the Sponsor has not waived any default, breach,
     violation or event of acceleration;

       (xxxvii) To the best knowledge of the Sponsor, 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; Each Mortgage and Mortgage Note is
     the legal, valid and binding obligation of the related Mortgagor and is
     enforceable by the Issuer against the Mortgagor in accordance with its
     terms, except only as such enforcement may be limited by bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     enforcement of creditors' rights generally and by law;

       (xxxviii)As of the Cut-Off Date no more than 0.10% of the Principal
     Balance of the Pool I Mortgage Loans nor more than 0.45% of the Principal
     Balance of the Pool II Mortgage Loans represents Mortgage Loans with
     respect to which the related Mortgagor had a Credit Score of 600 or less at
     the time of origination or whose Credit Score was unavailable.

                                       16
<PAGE>

       (xxxix) As of the Closing Date with respect to the Mortgage Loans and the
     applicable Transfer Date with respect to any Eligible Substitute Mortgage
     Loan, no Mortgagor has been released, in whole or in part, except in
     connection with an assumption agreement which has been approved by the
     applicable title insurer (to the extent required by such title insurer) and
     which is part of the Mortgage File delivered to the Trustee;

       (xl) At the time of origination of each Mortgage Loan, the related prior
     lien was not more than 30 days delinquent. Additionally, as of the Closing
     Date, no senior mortgage loan on the related Mortgaged Property was more
     than 59 days delinquent;

       (xli) All required inspections, licenses and certificates with respect to
     the use and occupancy of all occupied portions of all property securing the
     Mortgages have been made, obtained or issued, as applicable;

       (xlii) If the improvements securing a Mortgage Loan were in a federally
     designated special flood hazard area as of the date of origination, flood
     insurance to the extent required in Section 3.04 hereof covers the related
     Mortgaged Property (either by coverage under the federal flood insurance
     program or by coverage by private insurers);

       (xliii) With respect to each Mortgage Loan, the related prior lien does
     not provide for negative amortization;

       (xliv) With respect to each Mortgage Loan, the maturity date of the
     Mortgage Loan is prior to the maturity date of the related prior lien if
     such prior lien provides for a balloon payment;

       (xlv) All amounts received after the Cut-Off Date with respect to the
     Mortgage Loans to which the Sponsor is not entitled will be deposited into
     the Collection Account within one Business Day after the Closing Date;

       (xlvi) Each Pool I Mortgage Loan is secured by a property having an
     appraised value as of origination of $3,600,000 or less and each Pool II
     Mortgage Loan is secured by a property having an appraised value as of
     origination of $5,300,000 or less;

       (xlvii) Except for events permissible under this agreement, there are no
     defaults in complying with the terms of the Mortgage, and either (1) any
     taxes, governmental assessments, insurance premiums, water, sewer and
     municipal charges or ground rents which previously became due and owing
     have been paid, or (2) an escrow of funds has been established in an amount
     sufficient to pay for every such item which remains unpaid and which has
     been assessed but is not yet due and payable. There are no defaults in
     complying with the terms of any senior mortgage on the related Mortgaged
     Property that have not been cured by anyone other than the Servicer. Except
     for payments in the nature of escrow payments, including without
     limitation, taxes and insurance payments, the Sponsor has not advanced
     funds, or induced, solicited or knowingly received any advance of funds by
     a party other than the Mortgagor, directly or indirectly, for the payment
     of any amount required by the Mortgage Note, except for interest accruing
     from the date of the Mortgage Note or date of disbursement of the

                                       17
<PAGE>

     Mortgage proceeds, whichever is greater, to the day which precedes by one
     month the Due Date of the first installment of principal and interest;

       (xlviii) With respect to each Mortgage Loan, the improvements upon each
     Mortgaged Property are covered by a valid and existing hazard insurance
     policy with a carrier generally acceptable to the Servicer that provides
     for fire and extended coverage representing coverage not less than (a) the
     Credit Limit of such HELOC Mortgage Loan or (b) the Cut-Off Date Principal
     Balance of such Closed End Mortgage Loan or (c) the maximum insurable value
     of the Mortgaged Property;

       (xlix) No misrepresentation of a material fact or fraud in respect of the
     origination, modification or amendment of any Mortgage Loan has taken place
     on the part of any person, including, without limitation, the related
     Mortgagor, any appraiser, any builder or developer or any party involved in
     the origination of such Mortgage Loan;

       (l) With respect to the Pool I Mortgage Loans, the terms of the Mortgage
     Note and the Mortgage have not been impaired, altered or modified in any
     material respect, except by a written instrument which has been recorded or
     is in the process of being recorded, if necessary, to protect the interests
     of the Securityholders and which has been or will be delivered to the
     Trustee on behalf of the Trust;

       (li) As of the Cut-Off Date, no Mortgage Loan is 30 or more days
     delinquent in payment of principal and interest. In addition, none of the
     Mortgage Loans have been 30 or more days delinquent in the last 12 months
     and none of the Mortgage Loans have been 30 or more days delinquent for two
     payment periods in the last 12 months;

       (lii) With respect to the Pool I Mortgage Loans, approximately 15.22% of
     the Mortgage Loans, as of the Closing Date, are fixed rate fully amortizing
     Mortgage Loans having an original term to maturity from the date on which
     the first monthly payment is due of not more than 30 years. Each Mortgage
     Note with respect to a fixed rate and balloon Mortgage Note will provide
     for a schedule of substantially level and equal Monthly Payments which are
     sufficient to amortize fully the principal balance of such Mortgage Loan
     over a period of time equal to the amortization period of such Mortgage
     Note; provided, however, that certain Mortgage Loans -------- -------
     constituting approximately 7.91% of the Cut-Off Date Aggregate Loan Balance
     are balloon loans that provide for final monthly payment substantially
     greater than the preceding monthly payments. All such balloon loans provide
     for monthly payment based upon a 30 year amortization schedule with a final
     balloon payment no later than the 15th year.

       (liii) Except for Mortgage Loans that are delinquent for a time period
     less than that set forth in (li) above, there is no default, breach,
     violation or event of acceleration existing under any Mortgage or the
     related Mortgage Note and no event which, with the passage of time or with
     notice and the expiration of any grace or cure period, would constitute a
     default, breach, violation or event of acceleration; and neither the
     Sponsor, nor any other entity involved in originating or servicing a
     Mortgage Loan, has waived any default, breach, violation or event of
     acceleration;

                                       18
<PAGE>

       (liv) None of the Mortgage Loans are cooperative share mortgages;

       (lv) Each appraisal of a Mortgage Loan that was used to determine the
     appraised value of the related Mortgaged Property was conducted generally
     in accordance with the Servicer's mortgage loan origination program(s) and
     customary industry standards and included an assessment of the fair market
     value of the related mortgaged property at the time of the appraisal. The
     Mortgage File contains an appraisal of the applicable Mortgaged Property;

       (lvi) All individual insurance policies contain a standard mortgagee
     clause naming the Sponsor, its successors and assigns, as mortgagee. All
     premiums thereon have been paid. Each Mortgage obligates the Mortgagor
     thereunder to maintain all such insurance at the Mortgagor's cost and
     expense, and upon the Mortgagor's failure to do so, authorizes the holder
     of the Mortgage to obtain and maintain such insurance at the Mortgagor's
     cost and expense and to seek reimbursement therefor from the Mortgagor;

       (lvii) Any advances made after the date of origination of a Mortgage Loan
     but prior to the Cut-Off Date have been consolidated with the outstanding
     principal amount secured by the related 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 related
     Mortgage Loan;

       (lviii) No improvement located on or being part of any Mortgaged Property
     is in violation of any applicable zoning law or regulation. All
     inspections, licenses and certificates required to be made or issued with
     respect to all occupied portions of each Mortgaged Property and, with
     respect to the use and occupancy of the same, including but not limited to
     certificates of occupancy and fire underwriting certificates, have been
     made or obtained from the appropriate authorities and such Mortgaged
     Property is lawfully occupied under the applicable law and all improvements
     which were included for the purpose of determining the appraisal value of
     the Mortgaged Property lie wholly within the boundaries and building
     restriction lines of such property, and no improvement on adjoining
     property encroach upon the Mortgage Property;

       (lix) The proceeds of each fixed rate and balloon Mortgage Loan have been
     fully disbursed and there is no obligation on the part of the mortgagee to
     make future advances thereunder and any and all requirements as to
     completion of any on-site or off-site improvements and as to disbursement
     of any escrow funds therefor have been complied with. All costs, fees and
     expenses incurred in making, closing or recording the Mortgage Loans were
     paid and the Mortgagor is not entitled to any refund of amounts paid or due
     under the Mortgage Note;

       (lx) No Mortgage Loan has a shared appreciation feature, or other
     contingent interest feature;

       (lxi) All parties which have had any interest in the Mortgage Loan,
     whether as originator, mortgagee, assignee, pledgee or otherwise, are (or,
     during the period in

                                       19
<PAGE>

     which they held and disposed of such interest, were): (A) organized under
     the laws of such state, or (B) qualified to do business in such state, or
     (C) federal savings and loan associations or national banks having
     principal offices in such state, or (D) not doing business in such state so
     as to require qualification or licensing, or (E) not otherwise required or
     licensed in such state. To the best of Sponsor's knowledge, all parties
     which have had any interest in the Mortgage Loan were in compliance with
     any and all applicable licensing requirements of the laws of the state
     wherein the Mortgaged Property is located or were not required to be
     licensed in such state;

       (lxii) Each document or instrument in the related Mortgage File is in a
     form generally acceptable to prudent mortgage lenders that regularly
     originate or purchase mortgage loans comparable to the Mortgage Loans for
     sale to prudent investors in the secondary market that invest in mortgage
     loans such as the Mortgage Loans;

       (lxiii) Each original Mortgage was recorded and all subsequent
     assignments of the original Mortgage (other than the assignment to the
     Trustee) have been recorded in the appropriate jurisdictions wherein such
     recordation is necessary to perfect the lien thereof as against creditors
     of the Sponsor, or is in the process of being recorded;

       (lxiv) No Mortgage Loan was originated under a buydown plan;

       (lxv) No Mortgage Loan is subject to the requirements of the Home
     Ownership and Equity Protection Act of 1994 ("HOEPA") or is in violation of
     any state or municipal law comparable to HOEPA;

       (lxvi) The Servicer for each Mortgage Loan has accurately and fully
     reported its borrower credit files to each of the credit repositories in a
     timely manner;

       (lxvii) No proceeds from any Mortgage Loan were used to purchase
     single-premium credit insurance policies;

       (lxviii) No Mortgage Loan has a prepayment penalty term longer than three
     years after its origination;

       (lxix) Each Mortgage Loan conforms, and all Mortgage Loans in the
     aggregate conform, in all material respects, to the descriptions thereof
     set forth in the Information Circular and the Prospectus Supplement;

       (lxx) Each Mortgage Loan was originated on or after December 23, 1998;

       (lxxi) The Sponsor represents and warrants that the Servicer currently
     operates or actively participates in an on-going business (A) to originate
     single family mortgage loans ("Loans"), and/or (B) to make periodic
     purchases of Loans from originators or sellers, and/or (C) to issue and/or
     purchase securities or bonds supported by the Loans, a portion of which
     Loans are made to borrowers who are:

              (a) low-income families (families with incomes of 80% or less of
              area median income) living in low-income areas (a census tract or

                                       20
<PAGE>

              block numbering area in which the median income does not exceed
              80 percent of the area median income); or

              (b) very low-income families (families with incomes of 60% or
              less of area median income).

       (lxxii) Each Mortgage contains a provision for the acceleration of the
     payment of the unpaid principal balance of the related Mortgage Loan in the
     event the related Mortgaged Property is sold without the prior consent of
     the mortgagee thereunder;

       (lxxiii) With respect to the Pool I Mortgage Loans, to the best of
     Sponsor's knowledge, no Mortgage Loan that is a second-lien Mortgage Loan
     has a principal balance as of the applicable Cut-Off Date in excess of half
     of Freddie Mac's loan limits for such type of residence;

       (lxxiv) To the best of Sponsor's knowledge, the pool of Mortgages backing
     the Class A-1 Certificates does not contain the first and second lien
     mortgage loans relating to a single Mortgaged Property if the aggregate
     original principal balance of such mortgage loans exceeds Freddie Mac's
     loan limits. To the best of Sponsor's knowledge, the pool of Mortgages
     backing the Securities will not result in a violation of Freddie Mac's loan
     limitations;

       (lxxv) Each Mortgage Loan was originated substantially in accordance with
     Servicer's underwriting criteria, which conform to the underwriting
     criteria set forth in the Information Circular (for the Pool I loans) or
     the Prospectus Supplement (for the Pool II loans);

       (lxxvi) There exists no violation of any local, state or federal
     environmental law, rule or regulation in respect of the Mortgaged Property
     which violation has or could have a material adverse effect on the market
     value of such Mortgaged Property. Sponsor has no knowledge of any pending
     action or proceeding directly involving the related Mortgaged Property in
     which compliance with any environmental law, rule or regulation is in
     issue; and, to the best of Sponsor's knowledge, nothing further remains to
     be done to satisfy in full all requirements of each such law, rule or
     regulation constituting a prerequisite to the use and enjoyment of such
     Mortgaged Property;

       (lxxvii) The Sponsor has caused or will cause to be performed any and ail
     acts required to be performed to preserve the rights and remedies of the
     Trustee in any insurance policies applicable to the Mortgage Loans
     including, without limitation, any necessary notifications of insurers,
     assignment of policies or interests therein, and establishments of
     co-insured, joint loss payee and mortgagee rights in favor of the Trustee;

       (lxxviii) The related Mortgage Note is not and has not been secured by
     any collateral, pledged account or other security except the lien of the
     corresponding Mortgage;

                                       21
<PAGE>

       (lxxix) There is no obligation on the part of the Sponsor or any other
     party to make payments in addition to those made by the Mortgagor;

       (lxxx) With respect to each Mortgage constituting a deed of trust, a
     trustee, duly qualified under existing 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 Securityholders
     or the Trust to the trustee under the deed of trust, except in connection
     with a trustee's sale after default by the Mortgagor;

       (lxxxi) Each Mortgagor has executed a statement to the effect that such
     Mortgagor has received all disclosure materials including the notice of the
     right of cancellation or rescission required by applicable law with respect
     to the making of the Mortgage Loan and any waiver of any right of
     cancellation or rescission exercised by the Mortgagor was in accordance
     with applicable law and is binding on the Mortgagor.

With respect to the representations and warranties set forth in this Section
2.05 that are made to the best of the Sponsor's knowledge or as to which the
Sponsor has no knowledge, if it is discovered by the Sponsor, the Servicer, the
Insurer, Freddie Mac or a Responsible Officer of the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Sponsor's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.

     (b) It is understood and agreed that the representations and warranties set
forth in this Section 2.05 shall survive delivery of the respective Mortgage
Files to the Trustee pursuant to Section 2.01 and the termination of the rights
and obligations of the Servicer pursuant to Section 5.04 or 6.02. Upon discovery
by the Sponsor, the Servicer, the Insurer, Freddie Mac or a Responsible Officer
of the Trustee of a breach of any of the foregoing representations and
warranties, without regard to any limitation set forth therein concerning the
knowledge of the Sponsor as to the facts stated therein, which materially and
adversely affects the interests of the Trust or the Securityholders or the
Insurer or Freddie Mac in the related Mortgage Loans, the party discovering such
breach shall give prompt written notice to the other parties and to the Insurer
and Freddie Mac. Within 90 days of its discovery or its receipt of notice of
such breach, the Sponsor shall use all reasonable efforts to cure such breach in
all material respects or shall, not later than the Business Day next preceding
the Payment Date in the month following the Collection Period in which any such
cure period expired (or such later date that is acceptable to the Trustee or the
Controlling Party as evidenced by their written consents), either (a) accept a
transfer of such Mortgage Loan from the Trust or (b) substitute an Eligible
Substitute Mortgage Loan, each in the same manner and subject to the same
conditions as set forth in Section 2.03; provided, however, that the cure for
any breach of a representation and warranty relating to the characteristics of
the Mortgage Loans in the aggregate shall be a repurchase of or substitution for
only the Mortgage Loans necessary to cause such characteristics to be in
compliance with the related representation and warranty. Upon accepting such
transfer and making any required deposit into the Collection Account or
substitution of an Eligible Substitute Mortgage Loans, as the case may be, the
Sponsor shall be entitled to receive an instrument of assignment or transfer
from the Trustee to the same extent as set forth in Section 2.03 with respect to
the transfer of

                                       22
<PAGE>

Mortgage Loans under that Section. Freddie Mac and the Insurer shall be notified
of any substitution of an Eligible Substitute Mortgage Loan.

     It is understood and agreed that the obligation of the Sponsor to accept a
removal of a Mortgage Loan as to which a breach has occurred and is continuing
and to make any required deposit in the Collection Account or to substitute an
Eligible Substitute Mortgage Loan, as the case may be, shall constitute the sole
remedy against the Sponsor respecting such breach available to Securityholders,
the Trustee on behalf of Securityholders, the Insurer and Freddie Mac; provided,
however, that the Sponsor shall defend and indemnify the Trustee, the Insurer,
Freddie Mac and the Securityholders against all reasonable costs and expenses,
and all losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and the amount of any settlement entered into with the
consent of the Sponsor (such consent not to be unreasonably withheld), which may
be asserted against or incurred by any of them as a result of any third-party
action arising out of any breach of any such representation and warranty.
Notwithstanding the foregoing, with regard to any breach of the representation
and warranty set forth in Section 2.05(a)(xxxii), the Sponsor shall pay to the
Trust the sum of (i) the amount of the related Principal Balances, plus unpaid
accrued interest on each such Principal Balance at the applicable Loan Rate to
the date of payment, (ii) the amount of any loss suffered by the
Securityholders, the Insurer or Freddie Mac with respect to the affected
Mortgage Loans and (iii) all amounts owing to the Insurer pursuant to the
Insurance Agreement and to Freddie Mac pursuant to the Pooling Agreement.

     The Sponsor does hereby assign to the Trust the benefits of the
representations and warranties made to it with respect to the Mortgage Loans
under the Mortgage Loan Purchase Agreement and the Trust may exercise the rights
with respect thereto relating to a Mortgage Loan, including the right to require
repurchase in the event such Mortgage Loan is not repurchased by the Sponsor

     Section 2.06. Covenants of the Sponsor. The Sponsor hereby covenants that:

     (a) Security Interests. The Sponsor will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loans, whether now existing or hereafter created, or
any interest therein; the Sponsor will notify the Trustee, the Insurer and
Freddie Mac of the existence of any Lien on any Mortgage Loans immediately upon
discovery thereof; and the Sponsor will defend the Trust's right, title and
interest (including the Trust's security interest) in, to and under the Mortgage
Loans, whether now existing or hereafter created, against all claims of third
parties claiming through or under the Sponsor; provided, however, that nothing
in this Section 2.06(a) shall prevent or be deemed to prohibit the Sponsor from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Sponsor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.

     (b) UCC-1 Financing Statements. On the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing, on the
applicable Transfer Date with

                                       23
<PAGE>

respect to any Eligible Substitute Mortgage Loans, the Sponsor will file UCC-1
financing statements with respect to such Mortgage Loans.

     (c) Negative Pledge. The Sponsor hereby agrees not to transfer, assign,
exchange, pledge, finance, hypothecate, grant a security interest in or
otherwise convey the Residual Certificates except in accordance with Sections
5.05 and 6.02 hereof and in accordance with the Insurance Agreement and the
Trust Agreement.

     (d) Downgrading. The Sponsor will not engage in any activity which would
result in a downgrading or withdrawal of the ratings on the Securities without
regard to the effect of the Policy or the Guarantee.

     (e) Amendment to Certificate of Incorporation. The Sponsor will not amend
its Certificate of Incorporation without prior written notice to the Trustee and
the Rating Agencies and the prior written consent of the Controlling Party which
consent shall not be unreasonably withheld.

     (f) Principal Place of Business. The Sponsor's principal place of business
is in California, and the Sponsor will not change its principal place of
business without prior written notice to the Trustee, the Rating Agencies,
Freddie Mac and the Insurer.

     Section 2.07. Removal of Mortgage Loans at Election of Issuer. Subject to
the conditions set forth below and Section 8.2 of the Pooling Agreement, the
Issuer may, but shall not be obligated to, require the removal of Mortgage Loans
from Pool I and/or Pool II, from time to time, as of the close of business on a
Payment Date (each, a "Removal Date"). On the tenth Business Day (the "Removal
Notice Date") prior to the Removal Date designated in such notice, the Issuer
shall give the Trustee, the Insurer, Freddie Mac (with respect to Pool I only)
and the Servicer a notice of the proposed removal that contains a list of the
Mortgage Loans to be removed. Such removal of Mortgage Loans in Pool I or Pool
II shall be permitted upon satisfaction of the following conditions:

       (i) The applicable Rapid Amortization Period shall not have commenced;

       (ii) On the Removal Date, the related Overcollateralization Amount (after
     giving effect to the removal from the applicable Pool of the Mortgage Loans
     proposed to be removed) exceeds the related Specified Overcollateralization
     Amount;

       (iii) The transfer of such Mortgage Loans on any Removal Date during the
     related Managed Amortization Period shall not, in the reasonable belief of
     the Sponsor, cause a Rapid Amortization Event with respect to the related
     Class of Securities to occur or an event which with notice or lapse of time
     or both would constitute such a Rapid Amortization Event and a Rapid
     Amortization Event has not occurred;

       (iv) On or before the Removal Date, the Issuer shall have delivered to
     the Trustee a revised Mortgage Loan Schedule, reflecting the proposed
     transfer and the Removal Date, and the Servicer shall have marked the
     Electronic Ledger to show that the Mortgage Loans removed are no longer
     included in the applicable Pool;

                                       24
<PAGE>

       (v) The Issuer shall represent and warrant that no selection procedures
     reasonably believed by the Issuer to be adverse to the interests of the
     Securityholders or the Insurer or Freddie Mac (with respect to Pool I only)
     were utilized in selecting the Mortgage Loans to be removed from the
     applicable Pool;

       (vi) In connection with each such removal of Mortgage Loans pursuant to
     this Section, each Rating Agency shall have received on or prior to the
     related Removal Notice Date notice of such proposed removal of Mortgage
     Loans and, prior to the Removal Date, shall have notified the Trustee, the
     Insurer and Freddie Mac (with respect to Pool I only) in writing that such
     removal of Mortgage Loans would not result in a reduction or withdrawal of
     its then current ratings of the Class A-1 Certificates or of the Class A-2
     Notes, in either case without regard to the Policy or Guarantee, as
     applicable; and

       (vii) The Issuer shall have delivered to the Trustee, the Insurer and
     Freddie Mac an Officer's Certificate certifying that the items set forth in
     subparagraphs (i) through (vi), inclusive, have been performed or are true
     and correct, as the case may be. The Trustee, the Insurer and Freddie Mac
     may conclusively rely on such Officer's Certificate, shall have no duty to
     make inquiries with regard to the matters set forth therein and shall incur
     no liability in so relying.

       (viii) The Insurer and Freddie Mac shall have been given an opportunity
     to review any Mortgage Loans proposed to be removed by the Trust.

     Upon receiving the requisite information from the Issuer, the Servicer
shall perform in a timely manner those acts required of it, as specified above.
Upon satisfaction of the above conditions, on the Removal Date the Trustee shall
deliver, or cause to be delivered, to the Issuer the Mortgage File for each
Mortgage Loan being so transferred, and the Trustee shall execute and deliver to
the Issuer such other documents prepared by the Issuer as shall be reasonably
necessary to remove such Mortgage Loans from the applicable Pool. Any such
removal of Mortgage Loans shall be without recourse, representation or warranty
by or of the Trustee or the Trust to the Issuer. The review right given to the
Insurer and Freddie Mac in clause (viii), above, must be completed prior to the
Removal Date.

     Section 2.08. Execution and Authentication of Securities. The Trustee, on
behalf of the Trust, has caused to be executed, authenticated and delivered to
or upon the order of the Sponsor, in exchange for the Trust, concurrently with
the sale, assignment and conveyance to the Trustee of the Trust, two classes of
Securities (the Class A-1 Certificates representing beneficial interests in the
Trust and the Class A-2 Notes representing indebtedness of the Trust) in
authorized denominations and the Residual Certificates, evidencing the ownership
of the Trust.

     Section 2.09. Tax Treatment. It is the intention of the Sponsor and the
Residual Certificateholders that the Securities will be indebtedness of the
Sponsor for federal, state and local income and franchise tax purposes and for
purposes of any other tax imposed on or measured by income. The Sponsor, the
Trustee and each Securityholder (or Security Owner) by acceptance of its
Security (or, in the case of a Security Owner, by virtue of such Security
Owner's acquisition of a beneficial interest therein) agrees to treat the
Securities (or beneficial

                                       25
<PAGE>

interest therein), for purposes of federal, state and local income or franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Sponsor secured by the assets of the Trust and to report the transactions
contemplated by this Agreement on all applicable tax returns in a manner
consistent with such treatment. Each Securityholder agrees that it will cause
any Security Owner acquiring an interest in a Security through it to comply with
this Agreement as to treatment of the Securities as indebtedness for federal,
state and local income and franchise tax purposes and for purposes of any other
tax imposed on or measured by income. The Trustee will prepare and file all tax
reports required hereunder consistent with this Agreement except as may be
required by or provided in Section 3.15.

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

     Section 3.01. The Servicer.

     (a) The Servicer is hereby authorized to act as agent for the Trust and in
such capacity shall manage, service, administer and make collections on the
Mortgage Loans and perform the other actions under this Agreement. The Servicer
shall service and administer the Mortgage Loans in a manner consistent with the
terms of this Agreement and with general industry practice and shall have full
power and authority, acting alone or through a subservicer, to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable, it being understood, however, that the Servicer shall at
all times remain responsible to the Trustee, the Securityholders, the Residual
Certificateholders, the Insurer and Freddie Mac for the performance of its
duties and obligations hereunder in accordance with the terms hereof. Any
amounts received by any subservicer in respect of a Mortgage Loan shall be
deemed to have been received by the Servicer whether or not actually received by
it. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered by the Trust, to execute and
deliver, on behalf of the Trust, 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 with respect to
the Mortgaged Properties and to make deposits to and withdrawals from the
Collection Account. The Trustee and the Owner Trustee shall, upon the written
request of a Servicing Officer, furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder. The Servicer in such capacity
may also consent to the placing of a lien senior to that of any Mortgage on the
related Mortgaged Property, provided that

       (i) such Mortgage succeeded to a first lien position after the related
     Mortgage Loan was conveyed to the Trust and, immediately following the
     placement of such senior lien, such Mortgage is in a second lien position
     and the outstanding principal amount of the mortgage loan secured by such
     subsequent senior lien is no greater than the outstanding principal amount
     of the senior mortgage loan secured by the Mortgaged Property as of the
     date the related Mortgage Loan was originated; or

                                       26
<PAGE>

       (ii) the Mortgage relating to such Mortgage Loan was in a second lien
     position as of the Cut-Off Date and the new senior lien secures a mortgage
     loan that refinances an existing first mortgage loan and the outstanding
     principal amount of the replacement first mortgage loan immediately
     following such refinancing is not greater than the outstanding principal
     amount of such existing first mortgage loan at the date of origination of
     such Mortgage Loan;

provided, further, that such senior lien does not secure a note that provides
for negative amortization.

     The Servicer may also, without prior approval from the Rating Agencies,
Freddie Mac or the Insurer, increase the Credit Limits on HELOC Mortgage Loans
included in Pool II provided that (i) new appraisals are obtained and the
Combined Loan-to-Value Ratios of the HELOC Mortgage Loans after giving effect to
such increase are less than or equal to the Combined Loan-to-Value Ratios of the
Mortgage Loans as of the Cut-Off Date and (ii) such increases are consistent
with the Servicer's credit and collection policies. No material change or
departure from the Servicer's credit and collection policies with respect to any
Mortgage Loans as in effect as of the Closing Date shall be permitted without
the prior written consent of the Insurer and of Freddie Mac.

     In addition, the Servicer may agree to changes in the terms of a Mortgage
Loan at the request of the Mortgagor; provided that (i) such changes do not
materially and adversely affect the interests of Securityholders, Residual
Certificateholders, Freddie Mac or the Insurer, (ii) such changes are consistent
with prudent and customary business practice as evidenced by a certificate
signed by a Servicing Officer delivered to the Trustee, the Insurer and Freddie
Mac and (iii) the Rating Agencies, the Insurer and Freddie Mac are promptly
notified of the changes.

     In addition to the foregoing, the Servicer may solicit Mortgagors to change
any other terms of the related Mortgage Loans; provided that such changes (i) do
not materially and adversely affect the interest of Securityholders, the Insurer
or Freddie Mac and (ii) are consistent with prudent and customary business
practice as evidenced by a certificate signed by a Servicing Officer delivered
to the Trustee, the Insurer and Freddie Mac. Nothing herein shall limit the
right of the Servicer to solicit Mortgagors with respect to new loans (including
mortgage loans) that are not Mortgage Loans.

     The relationship of the Servicer (and of any successor to the Servicer as
servicer under this Agreement) to the Trustee under this Agreement is intended
by the parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.

     (b) In the event that the rights, duties and obligations of the Servicer
are terminated hereunder, any successor to the Servicer in its sole discretion
may, to the extent permitted by applicable law, terminate the existing
subservicer arrangements with any subservicer, without charge, or assume the
terminated Servicer's rights under such subservicing arrangements which
termination or assumption will not violate the terms of such arrangements.

     Section 3.02. Collection of Certain Mortgage Loan Payments.

                                       27
<PAGE>

     (a) 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, follow such
collection procedures as it follows with respect to home equity loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Servicer
may in its discretion (i) waive any late payment charge or any assumption fees
or other fees which may be collected in the ordinary course of servicing such
Mortgage Loans and (ii) arrange with a Mortgagor a schedule for the payment of
interest due and unpaid; provided that such arrangement is consistent with the
Servicer's policies with respect to the Mortgage Loans it owns or services;
provided, further, that notwithstanding such arrangement such Mortgage Loans
will be included in the information regarding delinquent Mortgage Loans set
forth in the Servicing Certificate and monthly statement to Securityholders
pursuant to Section 4.01.

     (b) The Servicer shall on the Closing Date deposit into the Collection
Account any amounts representing payments on, and any collections in respect of,
the Mortgage Loans received after the related Cut-Off Date and prior to the
Closing Date (exclusive of payments in respect of accrued interest due on or
prior to such Cut-Off Date) and thereafter the Servicer, or the Sponsor, as the
case may be, shall deposit into the Collection Account within one Business Day
following receipt thereof the following payments and collections received or
made by it (without duplication):

       (i) all collections on and in respect of the Mortgage Loans;

       (ii) the amounts, if any, deposited to the Collection Account pursuant
     to Section 3.04;

       (iii) Net Liquidation Proceeds;

       (iv) Insurance Proceeds (including, for this purpose, any amount
     required to be credited by the Servicer pursuant to the last sentence of
     Section 3.04 and excluding the portion thereof, if any, that has been
     applied to the restoration or repair of the related Mortgaged Property or
     released to the related Mortgagor in accordance with the normal servicing
     procedures of the Servicer);

       (v) any amounts required to be deposited therein pursuant to
     Section 7.01;

       (vi) any amounts drawn under the Policy pursuant to Section 8.4(d) of
     the Pooling Agreement; and

       (vii) any amounts drawn pursuant to the Demand Note;

provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Servicer need not deposit in the Collection Account amounts representing
Foreclosure Profits, fees (including annual fees) or late charge penalties
payable by Mortgagors, or amounts received by the Servicer for the accounts of
Mortgagors for application towards the payment of taxes,

                                       28
<PAGE>

insurance premiums, assessments, excess pay off amounts and similar items. The
Servicer shall remit all Foreclosure Profits to the Sponsor.

     The Trustee shall hold amounts deposited in the Collection Account as
trustee for the Securityholders, the Insurer and Freddie Mac. The Servicer shall
notify the Trustee, the Insurer, and Freddie Mac in writing on each
Determination Date of the amount of payments and collections in the Collection
Account allocable to Interest Collections and Principal Collections for the
related Payment Date. Following such notification, the Servicer shall be
entitled to withdraw from the Collection Account and retain any amounts that
constitute income and gain realized from the investment of such payments and
collections.

     At the direction of the Servicer, the Trustee shall invest funds in the
Collection Account in Eligible Investments. All income and gain realized from
any investment in Eligible Investments of funds in the Collection Account shall
be for the benefit of the Servicer and shall be subject to its withdrawal from
time to time. The amount of any losses incurred in respect of the principal
amount of any such investments shall be deposited in the Collection Account by
the Servicer out of its own funds immediately as realized.

     Section 3.03. Withdrawals from the Collection Account. From time to time,
withdrawals may be made from the Collection Account by the Servicer for the
following purposes:

       (i) If not received by the Servicer pursuant to Section 3.02(b), to the
     Servicer as payment for its Servicing Fee pursuant to Section 3.08;

       (ii) To pay to the Servicer amounts on deposit in the Collection Account
     that are not to be included in the distributions and payments pursuant to
     Section 8.7 of the Pooling Agreement to the extent provided by the second
     to the last and the last paragraph of Section 3.02(b);

       (iii) To make or to permit the Paying Agent to make distributions and
     payments pursuant to Section 8.7 of the Pooling Agreement;

       (iv) Prior to the Collection Period preceding the commencement of the
     Rapid Amortization Period, to pay to the Sponsor the amount of any
     Additional Balances as and when created during the related Collection
     Period; provided, that the aggregate amount so paid to the Sponsor in
     respect of Additional Balances at any time during any Collection Period
     shall not exceed the amount of Principal Collections theretofore received
     for such Collection Period;

       (v) To pay to the Servicer any Liquidation Expenses not reimbursed prior
     to the deposit of Net Liquidation Proceeds to the Collection Account;

       (vi) Upon termination of the Trust, to make any payments required by
     Section 7.01.

     If the Servicer deposits in the Collection Account any amount not required
to be deposited therein or any amount in respect of payments by Mortgagors made
by checks

                                       29
<PAGE>

subsequently returned for insufficient funds or other reason for non-payment it
may at any time withdraw such amount from the Collection Account, and any such
amounts shall not be included in the amounts to be deposited in the Collection
Account pursuant to Section 3.02(b), any provision herein to the contrary
notwithstanding.

     Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the Servicer or the related subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time. The Servicer shall also maintain on property acquired upon foreclosure,
or by deed in lieu of foreclosure, hazard insurance with extended coverage in an
amount which is at least equal to the lesser of (i) the maximum insurable value
from time to time of the improvements which are a part of such property or (ii)
the combined principal balance owing on such Mortgage Loan and any mortgage loan
senior to such Mortgage Loan at the time of such foreclosure or deed in lieu of
foreclosure plus accrued interest and the good-faith estimate of the Servicer of
related Liquidation Expenses to be incurred in connection therewith. Amounts
collected by the Servicer under any such policies shall be deposited in the
Collection Account to the extent called for by Section 3.02. In cases in which
any Mortgaged Property is located in a federally designated flood area, the
hazard insurance to be maintained for the related Mortgage Loan shall include
flood insurance. All such flood insurance shall be in such amounts as are
required under applicable guidelines of the Federal Flood Emergency Act. The
Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake or other additional insurance and shall be under no obligation itself
to maintain any such additional insurance on property acquired in respect of a
Mortgage Loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Servicer shall obtain and maintain a blanket policy consistent with prudent
industry standards insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry standards, it shall (a)
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.04 and (b) if there shall have been a loss
which would have been covered by such policy, deposit in the Collection Account
without right of reimbursement, as the case may be, the amount not otherwise
payable under the blanket policy because of any deductible clause.

     Section 3.05. Assumption and Modification Agreements. In any case in which
a Mortgaged Property has been or is about to be conveyed by the Mortgagor, the
Servicer shall exercise its right to accelerate the maturity of such Mortgage
Loan consistent with the then current practice of the Servicer and without
regard to the inclusion of such Mortgage Loan in the Trust. If it elects not to
enforce its right to accelerate or if it is prevented from doing so by
applicable law, the Servicer (so long as such action conforms with the
underwriting standards generally acceptable in the industry at the time for new
origination) is authorized to take or enter into an assumption and modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Loan Agreement and, to the extent permitted by applicable law, the Mortgagor
remains liable thereon. The Servicer shall notify the Trustee that any
assumption and modification agreement has been completed by delivering to the
Trustee an Officer's Certificate

                                       30
<PAGE>

signed by a Servicing Officer certifying that such agreement is in compliance
with this Section 3.05 and by forwarding to the Trustee the original copy of
such assumption and modification agreement. Any such assumption and modification
agreement shall, for all purposes, be considered a part of the related Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. No change in the terms of the related Loan Agreement may be made
by the Servicer in connection with any such assumption to the extent that such
change would not be permitted to be made in respect of the original Loan
Agreement pursuant to the fourth paragraph of Section 3.01(a). Any fee collected
by the Servicer for entering into any such agreement will be retained by the
Servicer as additional servicing compensation.

     Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans. The Servicer shall foreclose upon or otherwise
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default when, in the opinion of the
Servicer based upon the practices and procedures referred to in the following
sentence, no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.02; provided, that if the Servicer has knowledge
or reasonably believes that any Mortgaged Property is affected by hazardous or
toxic wastes or substances and that the acquisition of such Mortgaged Property
would not be commercially reasonable, then the Servicer will not cause the Trust
to acquire title to such Mortgaged Property in a foreclosure or similar
proceeding. In connection with such foreclosure or other conversion, the
Servicer shall follow such practices (including, in the case of any default on a
related senior mortgage loan, the advancing of funds to correct such default)
and procedures as it shall deem necessary or advisable and as shall be normal
and usual in its general mortgage servicing activities. The foregoing is subject
to the proviso that the Servicer shall not be required to incur any Liquidation
Expenses or to otherwise expend its own funds in connection with any foreclosure
or towards the correction of any default on a related senior mortgage loan or
restoration of any property unless it shall determine that such expenditure will
increase Net Liquidation Proceeds.

     In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of the Trust.

     The Servicer, in its sole discretion, shall have the right but not the
obligation to purchase for its own account from the Trust any Mortgage Loan
which is 91 days or more delinquent. The Servicer shall notify Freddie Mac and
the Insurer in writing of any such purchase. The price for any Mortgage Loan
purchased hereunder (which shall be at a purchase price equal to the Loan
Purchase Price thereof), shall be deposited in the Collection Account and the
Trustee, upon receipt of a certificate from the Servicer in the form of Exhibit
C-1 hereto, shall release or cause to be released to the Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the Servicer, in each case without recourse,
representation or warranty, as shall be necessary to vest in the purchaser of
such Mortgage Loans any Mortgage Loans released pursuant hereto and the Servicer
shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loans and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The Servicer shall
thereupon own such Mortgage Loans, and all security and documents, free of any
further

                                       31
<PAGE>

obligation to the Trustee, the Insurer, Freddie Mac, the Securityholders or the
Residual Certificateholders with respect thereto.

     Section 3.07. Trustee to Cooperate. On or before each Payment Date, the
Servicer will notify the Trustee of the payment in full of the Principal Balance
of any Mortgage Loan during the preceding Collection Period, which notification
shall be by a certification (which certification shall include a statement to
the effect that all amounts received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.02 have
been so deposited or credited) of a Servicing Officer. Upon any such payment in
full, the Servicer is authorized to execute, pursuant to the authorization
contained in Section 3.01, if the assignments of Mortgage have been recorded as
required hereunder, an instrument of satisfaction regarding the related
Mortgage, which instrument of satisfaction shall be recorded by the Servicer if
required by applicable law and be delivered to the Person entitled thereto. It
is understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. If the Trustee is holding the Mortgage
Files, from time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, or in connection with the payment in full of the Principal
Balance of any Mortgage Loan, the Trustee shall, upon request of the Servicer
and delivery to the Trustee of a Request for Release substantially in the form
attached hereto as Exhibit C signed by a Servicing Officer, release the related
Mortgage File to the Servicer and the Trustee shall execute such documents, in
the forms provided by the Servicer, as shall be necessary to the prosecution of
any such proceedings or the taking of other servicing actions. Such trust
receipt shall obligate the Servicer to return the Mortgage File to the Trustee
when the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the trust receipt shall be
released by the Trustee.

     In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the Assignments of
Mortgage in accordance with the provisions hereof, the Trustee shall, if so
requested in writing by the Servicer, execute an appropriate assignment in the
form provided to the Trustee by the Servicer to assign such Mortgage Loan for
the purpose of collection to the Servicer or to the related subservicer (any
such assignment shall unambiguously indicate that the assignment is for the
purpose of collection only), and, upon such assignment, the Servicer will
thereupon bring all required actions in its own name and otherwise enforce the
terms of the Mortgage Loan and deposit the Net Liquidation Proceeds, exclusive
of Foreclosure Profits, received with respect thereto in the Collection Account.
In the event that all delinquent payments due under any such Mortgage Loan are
paid by the Mortgagor and any other defaults are cured, then the Servicer shall,
within two Business Days, reassign such Mortgage Loan to the Trustee and return
the related Mortgage File to the place where it was being maintained. The
Residual Certificateholders shall be deemed to have repurchased the ownership
interest in any Liquidated Mortgage Loan in Pool I beneficially held by Holders
of the Class A-1 Certificates. After such repurchase, the Servicer, if requested
by such Residual Certificateholders and if offered suitable indemnification and
reimbursement for expenses, is authorized to seek a deficiency judgment if
permitted by law against the Mortgagor under such Liquidated Mortgage Loan on
behalf of the Residual Certificateholders to the extent of any Liquidation Loss
Amount.

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<PAGE>

     Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall be entitled to receive the Servicing Fee pursuant
to Section 3.03 as compensation for its services in connection with servicing
the Mortgage Loans. Moreover, additional servicing compensation in the form of
late payment charges or other receipts not required to be deposited in the
Collection Account (other than Foreclosure Profits) shall be retained by the
Servicer. The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including payment of all other fees
and expenses not expressly stated hereunder to be for the account of the
Securityholders and the Residual Certificateholders) and shall not be entitled
to reimbursement therefor except as specifically provided herein. Liquidation
Expenses are reimbursable to the Servicer solely from related Liquidation
Proceeds.

     Section 3.09. Annual Statement as to Compliance.

     (a) The Servicer will deliver to the Trustee, the Insurer, Freddie Mac and
the Rating Agencies, on or before March 31 of each year, beginning March 31,
2001, an Officer's Certificate stating that (i) a review of the activities of
the Servicer during the preceding fiscal year (or such shorter period as is
applicable in the case of the first report) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
of its material obligations under this Agreement throughout such fiscal 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.

     (b) The Servicer shall deliver to the Trustee, the Insurer, Freddie Mac and
each of the Rating Agencies, promptly after having obtained knowledge thereof,
but in no event later than five Business Days thereafter, written notice by
means of an Officer's Certificate of any event which with the giving of notice
or the lapse of time or both, would become an Event of Servicing Termination.

     Section 3.10. Annual Servicing Report. On or before March 31 of each year,
beginning March 31, 2001, the Servicer, at its expense, shall cause a firm of
nationally recognized independent public accountants (who may also render other
services to the Servicer) to furnish a report to the Trustee, the Insurer,
Freddie Mac and each Rating Agency to the effect that such firm has examined
certain documents and records relating to the servicing of mortgage loans during
the most recent fiscal year then ended under pooling and servicing agreements
(substantially similar to this Agreement, including this Agreement), that such
examination was conducted substantially in compliance with the audit guide for
audits of non-supervised mortgagees approved by the Department of Housing and
Urban Development for use by independent public accountants (to the extent that
the procedures in such audit guide are applicable to the servicing obligations
set forth in such agreements) and that such examination has disclosed no items
of noncompliance with the provisions of this Agreement which, in the opinion of
such firm, are material, except for such items of noncompliance as shall be set
forth in such report.

                                       33
<PAGE>

     Section 3.11. Annual Opinion of Counsel. On or before March 31 of each
year, beginning March 31, 2001, the Sponsor, at its expense, shall deliver to
the Trustee, the Insurer and Freddie Mac the applicable Opinion of Counsel
specified in Exhibit B hereto.

     Section 3.12. Access to Certain Documentation and Information Regarding the
Mortgage Loans.

     (a) Servicer shall provide to the Trustee, the Insurer, Freddie Mac, any
Securityholders that are federally insured savings and loan associations, the
Office of Thrift Supervision, successor to the Federal Home Loan Bank Board, the
FDIC and the supervisory agents and examiners of the Office of Thrift
Supervision access to the documentation regarding the Mortgage Loans required by
applicable regulations of the Office of Thrift Supervision and the FDIC (acting
as operator of the SAIF or the BIF), such access being afforded without charge
but only upon reasonable request and during normal business hours at the offices
of the Servicer. Nothing in this Section 3.12 shall derogate from the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Servicer to provide
access as provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.

     (b) The Servicer shall supply information in such form as the Trustee shall
reasonably request to the Trustee and the Paying Agent, on or before the start
of the Determination Date preceding the related Payment Date, as is required in
the Trustee's reasonable judgment to enable the Paying Agent or the Trustee, as
the case may be, to make required distributions and to furnish the required
reports to Securityholders and to make any claim under the Policy or Guarantee.

     Section 3.13. Maintenance of Certain Servicing Insurance Policies. The
Servicer shall maintain, at its own expense, a blanket fidelity bond (the
"Fidelity Bond") and an errors and omissions insurance policy, with broad
coverage with financially responsible companies on all officers, employees, or
other persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The Fidelity
Bond and errors and omissions insurance policy shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.13 requiring the
Fidelity Bond and errors and omissions insurance policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by Freddie Mac in
Freddie Mac's Seller/Servicer's Guide. Upon request of the Trustee, the Servicer
shall cause to be delivered to the Trustee a certified true copy of the Fidelity
Bond and errors and omissions insurance policy and a statement from the surety
and the insurer that such Fidelity Bond and errors and omissions insurance
policy shall in no event be terminated or materially modified without thirty
days' prior written notice to the Trustee.

                                       34
<PAGE>

     Section 3.14. Reports to the Securities and Exchange Commission. The
Trustee shall, on behalf of the Trust, cause to be filed with the Securities and
Exchange Commission any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission thereunder. Upon the
request of the Trustee, each of the Servicer and the Sponsor shall cooperate
with the Trustee in the preparation of any such report and shall provide to the
Trustee in a timely manner all such information or documentation as the Trustee
may reasonably request in connection with the performance of its duties and
obligations under this Section.

     Section 3.15. Tax Returns. In accordance with Section 2.09 hereof, the
Servicer shall prepare and file any Federal, State or local income and franchise
tax return for the Trust as well as any other applicable return and apply for a
taxpayer identification number on behalf of the Trust as provided in Article V
of the Trust Agreement, including, without limitation, forms 1099 and 1065. The
Sponsor shall treat the Mortgage Loans as its property for all Federal, State or
local tax purposes and shall report all income earned thereon (including amounts
payable as fees to the Servicer) as its income for income tax purposes. In the
event the Trust shall be required pursuant to an audit or administrative
proceeding or change in applicable regulations to file Federal, State or local
tax returns, the Servicer shall prepare and file or shall cause to be prepared
and filed any tax returns required to be filed by the Trust; the Trustee shall
promptly sign such returns and deliver such returns after signature to the
Servicer and such returns shall be filed by the Servicer. The Trustee shall also
prepare or shall cause to be prepared all tax information required by law to be
distributed to Securityholders. In no event shall the Trustee or the Servicer be
liable for any liabilities, costs or expenses of the Trust, the Securityholders,
the Residual Certificateholders or the Security Owners arising under any tax
law, including, without limitation, Federal, state or local income and franchise
or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to comply
therewith), except as provided in Sections 5.06 and 5.07 of this Agreement. The
Trustee shall represent the Trust in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority or
otherwise act on behalf of the Trust in relation to any tax matter involving the
Trust, provided, that to the extent that such representation affects Freddie
Mac's obligations under the Guarantee, the Trustee agrees to consult with
Freddie Mac and accommodate Freddie Mac's reasonable requests.

     Section 3.16. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
The Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws. In
particular, with respect to the requirement under Section 6050J of the Code to
the effect that the Servicer shall make reports of foreclosures and abandonments
of any mortgaged property for each year beginning in 2000, the Servicer shall
file reports relating to each instance occurring during the previous calendar
year in which the Servicer (i) on behalf of the Trustee acquires an interest in
any Mortgaged Property through foreclosure or other comparable conversion in
full or partial satisfaction of a Mortgage Loan, or (ii) knows or has reason to
know that any Mortgaged Property has been abandoned. The reports from the
Servicer shall be in form and substance sufficient to meet the reporting
requirements imposed by Section 6050J.

                                       35
<PAGE>

     Section 3.17. Inspection Rights; Miscellaneous

     (a) Within 90 days of the Closing Date, Freddie Mac will have the right to
review up to 500 of the Mortgage Files and the related underwriting
documentation in order to ascertain whether each Mortgage Loan was originated
generally in accordance with the Servicer's underwriting criteria.

     If Freddie Mac determines that more than 20% (by number) of the 500
Mortgage Loans in such sample were not so originated in accordance with such the
Servicer's underwriting criteria, Freddie Mac will have the right to review
additional Mortgage Loans until Freddie Mac has reviewed a sample of Mortgage
Loans less than 20% (by number) of which were not so originated.

     With respect to any Mortgage Loan for which the value of the related
Mortgaged Property at the time of origination did not adequately support the
original loan amount of the Mortgage Loan due to the value, condition,
marketability or adverse environmental conditions of such Mortgaged Property,
the Sponsor shall repurchase such Mortgage Loan or replace such Mortgage Loan
with a substitute Mortgage Loan acceptable to Freddie Mac and the Insurer. In
addition, Freddie Mac shall have the right to collect data on an additional
1,200 Mortgage Loans over and above the Mortgage Loans reviewed as described in
the first paragraph of this Section 3.17(a).

     Freddie Mac has the right to review any Mortgage Loan at any time. With
respect to any Mortgage Loan that goes into foreclosure, Freddie Mac will have
the right to request that the Servicer deliver a copy of the related Mortgage
File to Freddie Mac.

     (b) Freddie Mac, for a period of two years from the Closing Date, may
contact the Servicer to confirm that the Servicer continues actively to engage
in a business to originate mortgage loans to low-income families and to obtain
other non-proprietary information about the Sponsor's activities that may assist
Freddie Mac in completing its own regulatory requirements. The Servicer will use
its best efforts to provide such information to Freddie Mac.

     (c) For each Mortgage Loan, the Servicer will accurately and fully report
its borrower credit files to each of Equifax Credit Information Services, Inc.,
TransUnion, LLC and Experion Information Solution, Inc. (or their successors) in
a timely manner on a monthly basis.

     (d) Freddie Mac, from time to time, shall have the right to audit the
Servicer's servicing practices and to review the Mortgage Files. The Servicer
shall forward to Freddie Mac and the Insurer all of its financial statements.

     (e) The Servicer will not increase the applicable Credit Limit on any HELOC
Mortgage Loan included in Pool I.

     (f) The Servicer will not allow any further draws on any HELOC Mortgage
Loan if (i) the related borrower is 90 days delinquent in payment of principal
and interest on such HELOC Mortgage Loan; (ii) the related borrower is 60 days
delinquent in payment of principal and interest on such HELOC Mortgage Loan,
unless a payment has been made by the borrower in the last 30 days on that
60-day delinquent HELOC Mortgage Loan; or (iii) any loan senior to

                                       36
<PAGE>

that HELOC Mortgage Loan is 90 days delinquent in payment of principal and
interest or 60 days delinquent in such payment, unless a payment has been made
by the borrower in the last 30 days on that 60-day delinquent loan; provided,
however, that if the Servicer does not service such senior loan, then the
condition described in clause (iii) will be satisfied to the extent that, to the
best knowledge of the Servicer, such senior loan is not so delinquent.

                                   ARTICLE IV

                              SERVICING CERTIFICATE

Section 4.01. Servicing Certificate. Not later than seven (7) Business Days
prior to the Payment Date, the Servicer shall deliver to the Trustee, a
Servicing Certificate (in written form or the form of computer readable media or
such other form as may be agreed to by the Trustee and the Servicer), together
with an Officer's Certificate to the effect that such Servicing Certificate is
true and correct in all material respects, stating the related Collection
Period, Payment Date, the series number of the Securities, the date of this
Agreement, and:

       (i) the aggregate amount of collections received on the Mortgage Loans on
     or prior to the Determination Date in respect of such Collection Period;

       (ii) the aggregate amount of (a) Interest Collections and (b) Principal
     Collections for such Collection Period;

       (iii) the Principal Collections for such Payment Date, separately stating
     the components thereof;

       (iv) any accrued and unpaid Servicing Fees for previous Collection
     Periods and the Servicing Fee for such Collection Period;

       (v) the related Pool Balance for each Pool as of the end of the preceding
     Collection Period and as of the end of the second preceding Collection
     Period;

       (vi) the aggregate amount of Additional Balances created during the
     previous Collection Period;

       (vii) by Pool and in the aggregate, the number and aggregate Principal
     Balances of Mortgage Loans (A) as to which the Minimum Monthly Payment is
     delinquent for 30-59 days, 60-89 days, 90-119 days, 120-149 days, 150-179
     days and 180 or more days respectively and (B) that have become REO, in
     each case as of the end of the preceding Collection Period; (C) as to which
     foreclosure proceedings have been commenced, and (D) in bankruptcy and
     delinquent as of the close of business on the last day of the calendar
     month preceding such Distribution Date;

       (viii) the amount to be paid to the Servicer pursuant to Section
     8.7(d)(xi) of the Pooling Agreement;

                                       37
<PAGE>

       (ix) the number and Principal Balances of any Mortgage Loans removed to
     the Sponsor pursuant to Section 2.07;

     The Trustee shall conclusively rely upon the information contained in a
Servicing Certificate for purposes of making distributions pursuant to Section
8.7 of the Pooling Agreement, shall have no duty to inquire into such
information and shall have no liability in so relying. The format and content of
the Servicing Certificate may be modified by the mutual agreement of the
Servicer, the Trustee, the Insurer and Freddie Mac. The Servicer shall give
notice of any such change to the Rating Agencies.

     Section 4.02. Reserved.

     Section 4.03. The Trustee Remittance Report.

     (a) On each Determination Date by noon Eastern Standard time, the Trustee
shall furnish a report (the "Trustee Remittance Report") in the form attached as
Exhibit F-1 to this Agreement (together with a statement containing the
information that is required to be included in the statement to be prepared by
the Trustee pursuant to Section 4.03) to the Guarantor and the Insurer by
electronic medium as agreed to by the Trustee, the Guarantor and the Insurer, or
as applicable.

     (b) Subject to paragraph (d) below, if in any month the Trustee fails to
deliver the Trustee Remittance Report by 5:00 p.m. Eastern Standard time on the
related Determination Date, the Guarantor shall use its best efforts to
determine the amount of any required Guarantor Payment. If on any Distribution
Date the Guarantor makes any Guarantee Payment as a result of the failure of the
Trustee to distribute any remittance, the Trustee shall pay the Guarantor from
its own funds (not from the proceeds of the Trust Fund), not later than the
fourth Business Day following such Distribution Date, a $100 fee plus an amount
equal to the product of (i) the principal portion of such Guarantee Payment,
(ii) a percentage equal to (A) the Prime Rate plus 2.00% divided by (B) 365 and
(iii) the number of days between the Determination Date and the date on which
the Guarantor received the Trustee Remittance Report.

     (c) Subject to paragraph (d) below, if in any month the Trustee fails to
provide the Guarantor the Trustee Remittance Report on or prior to the
Determination Date, the Trustee shall pay to the Guarantor the following
amounts: (i) upon the first such failure, $500; (ii) upon the second such
failure, $750; and (iii) upon the third such failure, $1,000; provided, however,
that the Trustee shall not be required to make any such payment upon the first
such failure during each successive two year period following the Closing Date.
The fourth consecutive such failure to provide a Trustee Remittance Report to
the Guarantor pursuant to Section 4.03 (a) shall constitute an event of default
and permit the Guarantor to remove the Trustee for cause.

     (d) The Trustee shall have no responsibility or liability (including
removal as Trustee) under paragraphs (b) and (c) of this Section 4.03 if the
Trustee's failure to timely deliver the Trustee Remittance Report is due to the
failure of the Servicer to furnish the Trustee with a Servicing Certificate or
Loan Data Remittance Report in accordance with Sections 4.01 and 4.04(a). If the
Trustee's failure to timely deliver the Trustee Remittance Report is due to the
failure of the Servicer to furnish the Trustee with a Servicing Certificate or
Loan Data

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<PAGE>

Remittance Report in accordance with Sections 4.01 and 4.04(a), the Servicer
shall pay to the Guarantor the amount set forth in Section 4.03(b) above
provided, however, that the Servicer shall not be required to make any such
payment upon the first such failure during each successive two year period
following the Closing Date. The fourth consecutive such failure to provide the
Trustee with a report to accordance with Section 4.04(a) and thereby causing the
Trustee's failure to timely deliver a Trustee Remittance Report to the Guarantor
pursuant to Section 4.03(a) shall constitute an Event of Servicing Termination
and permit the Guarantor to remove the Servicer for cause.

     (e) On each Determination Date by noon Eastern Standard time, the Trustee
shall forward to the Guarantor by electronic medium as agreed to by the Trustee
and the Guarantor a report describing each Mortgage Loan that became a
Liquidated Mortgage Loan during the related Collection Period, any Liquidation
Proceeds received or Liquidation Loss Amounts incurred with respect to each such
Liquidated Mortgage Loan and Liquidation Expenses incurred in the liquidation of
any such Liquidated Mortgage Loan, in each case to the extent that the Trustee
has received from the Servicer a report providing such information.

     Section 4.04. Loan Data Remittance Report.

     (a) On the seventh Business Day before each Payment Date (the "Loan Data
Remittance Date") by noon Eastern Standard time, the Servicer shall furnish a
report (the "Loan Data Remittance Report") in the form attached as Exhibit F-2
to this Agreement to the Guarantor, the Insurer and the Trustee by electronic
medium as agreed to by the Servicer, the Trustee, the Insurer and the Guarantor.

     (b) If in any month the Servicer fails to provide the Guarantor the Loan
Data Remittance Report on or prior to the Loan Data Remittance Date, the
Servicer shall pay to the Guarantor the following amounts: (i) upon the first
such failure, $500; (ii) upon the second such failure, $750; and (iii) upon the
third such failure, $1,000; provided, however, that the Servicer shall not be
required to make any such payment upon the first such failure during each
successive two year period following the Closing Date. The fourth consecutive
such failure to provide a Loan Data Remittance Report to the Guarantor pursuant
to Section 4.04(a) shall constitute an event of default and permit the Guarantor
to remove the Servicer for cause.

     Section 4.05. Reserve Fund.

     (a) Amounts on deposit in the Reserve Fund will, at the direction of the
Servicer, be invested in Eligible Investments maturing no later than the day
before the next Payment Date or on such Payment Date if approved by the Rating
Agencies and the Controlling Party.

     All income and gain realized from any investment of funds in the Reserve
Fund shall be considered part of the Reserve Fund until released pursuant to the
Pooling Agreement. Following that point all earnings shall go to the Sponsor.
The Sponsor will report for Federal, state and local income tax purposes the
income, if any, represented by the Reserve Fund.

     (b) Following the termination of the Trust pursuant to Section 7.01 hereof,
the Trustee shall withdraw all amounts then on deposit in the Reserve Fund
pursuant to the Pooling Agreement.

                                       39
<PAGE>

                                   ARTICLE V

                          THE SERVICER AND THE SPONSOR

     Section 5.01. Liability of the Servicer and the Sponsor. The Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Servicer herein. The Sponsor
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Sponsor.

     Section 5.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer or the Sponsor. Any corporation into which the Servicer or the
Sponsor may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Servicer or the Sponsor shall
be a party, or any corporation succeeding to the business of the Servicer or the
Sponsor, shall be the successor of the Servicer or the Sponsor, 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.

     Section 5.03. Limitation on Liability of the Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the Securityholders or
Residual Certificateholders for any action taken or for refraining from the
taking of any action by the Servicer in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any breach of representations
and warranties made herein, or against any specific liability imposed on the
Servicer for a breach of its servicing under this Agreement or against liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties of the Servicer or by reason of reckless
disregard of obligations and duties of the Servicer hereunder. The Servicer and
any director or officer or employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Servicer and any
director or officer or employee or agent of the Servicer shall be indemnified by
the Trust and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Securities,
other than any loss, liability or expense related to any specific Mortgage Loan
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or negligence, breach of
representations and warranties made herein, or against any specific liability
imposed on the Servicer for a breach of its servicing under this Agreement or
against in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to duties to service the Mortgage Loans in accordance with this
Agreement, and which in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may in its sole discretion undertake any
such action which it may deem necessary or desirable in respect of this
Agreement, and the rights and duties of the parties hereto and the interests of
the Securityholders and Residual Certificateholders hereunder. In such event,
the reasonable legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust and
the Servicer shall only be entitled to be reimbursed therefor pursuant to
Section 8.7(d)(xi) of the Pooling Agreement. The

                                       40
<PAGE>

Servicer's right to indemnity or reimbursement pursuant to this Section 5.03
shall survive any resignation or termination of the Servicer pursuant to Section
5.04 or 6.01 with respect to any losses, expenses, costs or liabilities arising
prior to such resignation or termination (or arising from events that occurred
prior to such resignation or termination).

     Section 5.04. Servicer Not to Resign. Subject to the provisions of Section
5.02, the Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Trustee, the Insurer and
Freddie Mac in writing and such proposed successor servicer is reasonably
acceptable to the Trustee; (b) each Rating Agency shall have delivered a letter
to the Trustee, the Insurer and Freddie Mac prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Servicer hereunder will not result in the qualification, reduction
or withdrawal of the then current rating of the Securities without regard to the
Policy; and (c) such proposed successor servicer is reasonably acceptable to the
Controlling Party, as evidenced by a letter from each to the Trustee; provided,
however, that no such resignation by the Servicer shall become effective until
the Trustee or successor servicer designated by the Servicer as provided above
shall have assumed the Servicer's responsibilities and obligations hereunder or
the Trustee shall have designated a successor servicer in accordance with
Section 6.02. Any such resignation shall not relieve the Servicer of
responsibility for any of the obligations specified in Sections 6.01 and 6.02 as
obligations that survive the resignation or termination of the Servicer. Any
such determination permitting the resignation of the Servicer pursuant to clause
(i) above shall be evidenced by an Opinion of Counsel to such effect delivered
to the Trustee, the Insurer and Freddie Mac. The Servicer shall have no claim
(whether by subrogation or otherwise) or other action against any Securityholder
or Residual Certificateholder for any amounts paid by the Servicer pursuant to
any provision of this Agreement.

     Section 5.05. Delegation of Duties. In the ordinary course of business, the
Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, or any subservicer referred to in Section 3.01,
who agrees to conduct such duties in accordance with standards comparable to
those with which the Servicer complies pursuant to Section 3.01. Such delegation
shall not relieve the Servicer of its liabilities and responsibilities with
respect to such duties and shall not constitute a resignation within the meaning
of Section 5.04. The Servicer's delegation of any of its duties hereunder to any
subservicer shall be subject to the prior approval of the Controlling Party;
provided, that any such subservicer must be an "approved servicer" of Freddie
Mac. The Servicer shall terminate its delegation of any of its duties hereunder
to any subservicer at the Controlling Party's reasonable request.

     Section 5.06. Indemnification of the Trust by the Servicer. The Servicer
shall indemnify and hold harmless the Trust, the Owner Trustee and the Trustee
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of the Servicer's activities or omissions in servicing or
administering the Mortgage Loans that are not in accordance with this Agreement,
including, but not limited to, any judgment, award, settlement,

                                       41
<PAGE>

reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim. Any
such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
5.06 shall survive termination of this Agreement.

     Section 5.07. Indemnification of the Trust by the Sponsor. Notwithstanding
anything to the contrary contained herein, the Sponsor (i) agrees to be liable
directly to the injured party for the entire amount of any losses, claims,
damages, liabilities and expenses of the Trust (other than those attributable to
a Securityholder as a result of defaults on the Mortgage Loans) to the extent
that the Sponsor would be liable if the Trust were a partnership under the
Delaware Revised Uniform Limited Partnership Act in which the Sponsor was a
general partner and (ii) shall indemnify and hold harmless the Trust, the Owner
Trustee and the Trustee from and against any loss, liability, expense, damage,
claim or injury (other than those attributable to a Securityholder as a result
of defaults on the Mortgage Loans) arising out of or based on this Agreement by
reason of any acts, omissions, or alleged acts or omissions arising out of
activities of the Trust, the Owner Trustee or the Trustee, or the actions of the
Servicer, including, but not limited to, amounts payable to the Servicer
pursuant to Section 5.03, any judgment, award, settlement, reasonable attorneys'
fees and other costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim; provided that the Sponsor
shall not indemnify the Owner Trustee or the Trustee (but shall indemnify any
other injured party) if such loss, liability, expense, damage or injury is due
to the Owner Trustee's or the Trustee's willful malfeasance, bad faith or
negligence, breach of representations and warranties made herein, or against any
specific liability imposed on the Owner Trustee or Trustee for a breach of its
obligations hereunder. The provisions of this indemnity shall run directly to
and be enforceable by an injured party subject to the limitations hereof.

     Section 5.08. Limitation on Liability of the Sponsor. None of the directors
or officers or employees or agents of the Sponsor shall be under any liability
to the Trust, the Owner Trustee or the Trustee, the Securityholders or the
Residual Certificateholders, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and the issuance of the
Securities; provided, however, that this provision shall not protect any such
Person against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith, negligence or breach of representations and
warranties made herein, or against any specific liability imposed on such Person
in the performance of the duties hereunder. Except as provided in Section 5.07,
the Sponsor shall not be under any liability to the Trust, the Owner Trustee or
the Trustee or the Securityholders or Residual Certificateholders for any action
taken or for refraining from the taking of any action in its capacity as Sponsor
pursuant to this Agreement whether arising from express or implied duties under
this Agreement; provided, however, that this provision shall not protect the
Sponsor against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties hereunder. The
Sponsor and any director or officer or employee or agent of the Sponsor may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.

                                       42
<PAGE>

                                   ARTICLE VI

                              SERVICING TERMINATION

     Section 6.01. Events of Servicing Termination. If any one of the following
events ("Events of Servicing Termination") shall occur and be continuing:

       (i) Any failure by the Servicer to deposit in the Collection Account any
     deposit required to be made under the terms of this Agreement which
     continues unremedied for a period of one Business Day after the date upon
     which written notice of such failure shall have been given to the Servicer
     by the Trustee or to the Servicer and the Trustee by the Insurer or Freddie
     Mac or Holders of Securities evidencing more than 25% of the Principal
     Balance of the Securities instruct otherwise; or

       (ii) Failure on the part of the Servicer duly to observe or perform in
     any material respect any other covenants or agreements of the Servicer set
     forth in the Securities or in this Agreement, which failure continues
     unremedied for a period of 15 days after the date on which written notice
     of such failure, requiring the same to be remedied, and stating that such
     notice is a "Notice of Default" hereunder, shall have been given to the
     Servicer by the Trustee or to the Servicer and the Trustee by the Insurer
     or Freddie Mac or the Holders of Securities evidencing more than 25% of the
     Principal Balance of the Securities; or

       (iii) The entry against the Servicer of a decree or order by a court or
     agency or supervisory authority having jurisdiction in the premises for the
     appointment of a trustee, conservator, receiver or liquidator in any
     insolvency, conservatorship, receivership, readjustment of debt,
     marshalling of assets and liabilities or similar proceedings, or for the
     winding up or liquidation of its affairs, and the continuance of any such
     decree or order unstayed and in effect for a period of 60 consecutive days;
     or

       (iv) The consent by the Servicer to the appointment of a trustee,
     conservator, receiver or liquidator in any insolvency, conservatorship,
     receivership, readjustment of debt, marshalling of assets and liabilities
     or similar proceedings of or relating to the Servicer or of or relating to
     substantially all of its property; or the Servicer shall admit in writing
     its inability to pay its debts generally as they become due, file a
     petition to take advantage of any applicable insolvency or reorganization
     statute, make an assignment for the benefit of its creditors, or
     voluntarily suspend payment of its obligations;

       (v) the occurrence of an Event of Servicer Termination under the
     Insurance Agreement;

       (vi) the Servicer is no longer an "approved servicer" of Freddie Mac;

then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Servicer, either the Trustee,
the Controlling Party or the Holders of Securities evidencing more than 50% of
the Outstanding Amount of the Securities, in each case with the consent of the
Controlling Party, by notice then given in writing to the Servicer (and to

                                       43
<PAGE>

the Trustee if given by the Insurer or the Holders of Securities) may terminate
all of the rights and obligations of the Servicer as servicer under this
Agreement. Upon the occurrence of a Servicer Termination Delinquency Rate
Trigger or Servicer Termination Loss Trigger as those terms are defined in the
Insurance Agreement, the Insurer may, in its reasonable discretion, terminate
all of the rights and obligations of the Servicer pursuant to the terms hereof.
Any such notice to the Servicer shall also be given to each Rating Agency,
Freddie Mac and the Insurer. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Securities or the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee pursuant to and under this Section 6.01;
and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of each
Mortgage Loan and related documents, or otherwise. The Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the Trustee for the administration by it of all cash amounts that
shall at the time be held by the Servicer to be deposited by it in the
Collection Account, or that have been deposited by the Servicer in the
Collection Account or thereafter received by the Servicer with respect to the
Mortgage Loans. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with amending this Agreement to reflect such succession
as Servicer pursuant to this Section 6.01 shall be paid by the predecessor
Servicer (or if the predecessor Servicer is the Trustee, the initial Servicer)
upon presentation of reasonable documentation of such costs and expenses.

     Notwithstanding the foregoing, a delay in or failure of performance under
Section 6.01(i) for a period of one Business Day or under Section 6.01(ii) for a
period of 15 days, shall not constitute an Event of Servicing Termination if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes or floods. The preceding sentence shall not relieve the Servicer
from using its best efforts to perform its respective obligations in a timely
manner in accordance with the terms of this Agreement and the Servicer shall
provide the Trustee, the Sponsor, Freddie Mac, the Insurer and the
Securityholders and Residual Certificateholders with an Officer's Certificate
giving prompt notice of such failure or delay by it, together with a description
of its efforts to so perform its obligations. The Servicer shall immediately
notify the Trustee, the Insurer and Freddie Mac in writing of any Events of
Servicing Termination.

     Section 6.02. Trustee to Act; Appointment of Successor.

     (a) On and after the time the Servicer receives a notice of termination
pursuant to Section 6.01 or resigns pursuant to Section 5.04, the Trustee shall
be the successor in all respects to the Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions hereof.
Notwithstanding the above, if the Trustee becomes the Servicer hereunder, it
shall have no responsibility or obligation (i) of repurchase or substitution
with respect to any Mortgage Loan, (ii) with respect to any

                                       44
<PAGE>

representation or warranty of the Servicer, and (iii) for any act or omission of
either a predecessor or successor Servicer other than the Trustee. As
compensation therefor, the Trustee shall be entitled to such compensation as the
Servicer would have been entitled to hereunder if no such notice of termination
had been given. In addition, the Trustee will be entitled to compensation with
respect to its expenses in connection with conversion of certain information,
documents and record keeping, as provided in Sections 6.7 and 6.8 of the Pooling
Agreement. Notwithstanding the above, (i) if the Trustee is unwilling to act as
successor Servicer, or (ii) if the Trustee is legally unable so to act, the
Trustee may with the consent of the Controlling Party (in the situation
described in clause (i)) or shall (in the situation described in clause (ii))
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer with all licenses and permits required to perform its
obligations under this Agreement and having a net worth of not less than
$15,000,000 as the successor to the Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder; provided that any such successor Servicer shall be acceptable to the
Controlling Party, as evidenced by its prior written consent, which consent
shall not be unreasonably withheld; and provided, further, that the appointment
of any such successor Servicer will not result in the qualification, reduction
or withdrawal of the ratings assigned to the Securities by the Rating Agencies
without regard to the Policy or the Guarantee. Pending appointment of a
successor to the Servicer hereunder, unless the Trustee is prohibited by law
from so acting, the Trustee shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in an amount
equal to the compensation which the Servicer would otherwise have received
pursuant to Section 3.08 (or such lesser compensation as the Trustee and such
successor shall agree). The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.

     (b) Any successor, including the Trustee, to the Servicer as servicer shall
during the term of its service as servicer (i) continue to service and
administer the Mortgage Loans for the benefit of the Securityholders and
Residual Certificateholders, the Insurer and Freddie Mac and (ii) maintain in
force a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and a fidelity bond in
respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 3.13. The appointment of a successor Servicer
shall not affect any liability of the predecessor Servicer which may have arisen
under this Agreement prior to its termination as Servicer (including, without
limitation, any deductible under an Insurance Policy pursuant to Section 3.04),
nor shall any successor Servicer be liable for any acts or omissions of the
predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein.

     Section 6.03. Notification to Securityholders and Residual
Certificateholders. Upon any termination or appointment of a successor to the
Servicer pursuant to this Article VI or Section 5.04, the Trustee shall give
prompt written notice thereof to the Securityholders and Residual
Certificateholders (at their respective addresses appearing in the Security
Register and in the Residual Certificate Register), the Insurer, Freddie Mac and
each Rating Agency.

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<PAGE>

                                   ARTICLE VII

                                   TERMINATION

     Section 7.01. Termination.

     (a) The respective obligations and responsibilities of the Servicer, the
Sponsor and the Trustee created hereby (other than the obligation of the Trustee
to make certain payments to Securityholders after the final Payment Date and the
obligation of the Servicer to send certain notices as hereinafter set forth)
shall terminate upon the last action required to be taken by the Trustee on the
final Payment Date pursuant to this Article VII following the later of (A) the
Payment Date following payment in full of all amounts owing to the Insurer and
Guarantor and (B) the earliest of (i) the transfer, under the conditions
specified in Section 7.01(b), to the Sponsor of the Securityholders' interest in
each Mortgage Loan and all property acquired in respect of any Mortgage Loans
remaining in the Trust for an amount equal to the sum of (v) the sum of the
Class A-1 Certificate Principal Balance and the Class A-2 Note Principal
Balance, (w) the sum of accrued and unpaid Class A-1 Interest Payment Amount and
Class A-2 Interest Payment Amount through the day preceding the final Payment
Date, (x) the sum of the Class A-1 Deferred Interest and Class A-2 Deferred
Interest and any interest accrued on any Class A-1 Deferred Interest or Class
A-2 Deferred Interest to the extent legally permissible, (y) all amounts due and
owing the Insurer pursuant to the Insurance Agreement and Section 8.7 of the
Pooling Agreement and (z) all amounts due and owing Freddie Mac under the
Pooling Agreement, (ii) the day following the Payment Date on which the
distribution made to Securityholders has reduced the Class A-1 Certificate
Principal Balance and the Class A-2 Note Principal Balance to zero and no other
amounts are owed to the Securityholders hereunder, no other amounts are owed to
the Insurer pursuant to the Insurance Agreement and Section 8.7 of the Pooling
Agreement and no other amounts are owed to Freddie Mac under the Pooling
Agreement, (iii) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust (including, without limitation, the disposition of
the Mortgage Loans pursuant to Section 5.4 of the Pooling Agreement) or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (iv) the Payment Date in September 2026;
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the date of death of the last surviving
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof. Upon termination in
accordance with clause (a)(B)(i) of this Section 7.01, the Trustee shall execute
such documents and instruments of transfer presented by the Sponsor, in each
case without recourse, representation or warranty, and take such other actions
as the Sponsor may reasonably request to effect the transfer of the Mortgage
Loans to the Sponsor.

     (b)  (i)  The Sponsor shall have the right to exercise the option to effect
     the transfer to the Sponsor of each Pool I Mortgage Loan pursuant to
     Section 7.01(a)(B) above on any Payment Date on or after the Payment Date
     immediately prior to which the Class A-1 Certificate Principal Balance is
     less than ten percent (10%) of the Original Class A-1 Certificate Principal
     Balance and all amounts due and owing to the Insurer for unpaid premiums
     and unreimbursed draws on the Policy (in each case, related to the Class
     A-1 Certificates) and all other amounts due and owing to the Insurer
     pursuant to the Insurance Agreement, together with interest thereon as
     provided under the Insurance

                                       46

<PAGE>

     Agreement, and all amounts due and owing to Freddie Mac under the Pooling
     Agreement, have been paid.

          (ii) The Sponsor shall have the right to exercise the option to effect
     the transfer to the Sponsor of each Pool II Mortgage Loan pursuant to
     Section 7.01(a)(B) above on any Payment Date on or after the Payment Date
     immediately prior to which the Class A-2 Note Principal Balance is less
     than ten percent (10%) of the Original Class A-2 Note Principal Balance and
     all amounts due and owing to the Insurer for unpaid premiums and
     unreimbursed draws on the Policy (in each case, related to the Class A-2
     Notes) and all other amounts due and owing to the Insurer for unpaid
     premiums and unreimbursed draws on the Policy and all other amounts due and
     owing to the Insurer pursuant to the Insurance Agreement and to Freddie
     Mac, together with interest thereon as provided under the Insurance
     Agreement, have been paid.

     (c) The Sponsor, at its expense, shall prepare and deliver to the Trustee
for execution, at the time the related Mortgage Loans are to be released to the
Sponsor, appropriate documents assigning each such Mortgage Loan from the
Trustee to the Sponsor and shall promptly record such assignments.

     (d) The Sponsor shall not exercise its right to repurchase the Mortgage
Loans pursuant to Section 7.01(b) hereof if (a) such repurchase would result in
a draw on the Policy or a Guarantee Payment, without the consent of the Insurer
or Freddie Mac as applicable, which consent shall not be unreasonably withheld,
(b) reimbursement is due to the Insurer or Freddie Mac and (c) the
Overcollateralization Amount for Pool I and/or Pool II at such time does not
equal the Specified Overcollateralization Amount for such Pool (unless the
Controlling Party waives such requirement).

                                  ARTICLE VIII

                      ADMINISTRATIVE DUTIES OF THE SERVICER

Section 8.01.     Administrative Duties.

     (a) Duties with Respect to the Pooling Agreement. The Servicer shall
perform all its duties and the duties of the Issuer under the Pooling Agreement.
In addition, the Servicer shall consult with the Owner Trustee as the Servicer
deems appropriate regarding the duties of the Issuer under the Pooling
Agreement. The Servicer shall monitor the performance of the Issuer and shall
advise the Owner Trustee when action is necessary to comply with the Issuer's
duties under the Pooling Agreement. The Servicer shall prepare for execution by
the Issuer or shall cause the preparation by other appropriate Persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer to prepare, file or deliver pursuant to the
Pooling Agreement. In furtherance of the foregoing, the Servicer shall take all
necessary action that is the duty of the Issuer to take pursuant to the Pooling
Agreement.

                                       47
<PAGE>

     (b) Duties with Respect to the Issuer.

       (i) In addition to the duties of the Servicer set forth in this Agreement
     or any of the Basic Documents, the Servicer shall perform such calculations
     and shall prepare for execution by the Issuer or the Owner Trustee or shall
     cause the preparation by other appropriate Persons of all such documents,
     reports, filings, instruments, certificates and opinions as it shall be the
     duty of the Issuer or the Owner Trustee to prepare, file or deliver
     pursuant to this Agreement or any of the Basic Documents or under state and
     federal tax and securities laws, and at the request of the Owner Trustee
     shall take all appropriate action that it is the duty of the Issuer to take
     pursuant to this Agreement or any of the Basic Documents, including,
     without limitation, pursuant to Sections 2.6 and 2.11 of the Trust
     Agreement. In accordance with the directions of the Issuer or the Owner
     Trustee, the Servicer shall administer, perform or supervise the
     performance of such other activities in connection with the Mortgage Loans
     (including the Basic Documents) as are not covered by any of the foregoing
     provisions and as are expressly requested by the Issuer or the Owner
     Trustee and are reasonably within the capability of the Servicer.

       (ii) Notwithstanding anything in this Agreement or any of the Basic
     Documents to the contrary, the Servicer shall be responsible for promptly
     notifying the Owner Trustee and the Trustee, the Insurer and Freddie Mac in
     the event that any withholding tax is imposed on the Issuer's payments (or
     allocations of income) to a Residual Certificateholder (as defined in the
     Trust Agreement) as contemplated by this Agreement. Any such notice shall
     be in writing and specify the amount of any withholding tax required to be
     withheld by the Owner Trustee or the Trustee pursuant to such provision.

       (iii) Notwithstanding anything in this Agreement or the Basic Documents
     to the contrary, the Servicer shall be responsible for performance of the
     duties of the Issuer or the Sponsor set forth in Section 5.1(a), (b), (c)
     and (d) of the Trust Agreement with respect to, among other things,
     accounting and reports to Residual Certificateholders (as defined in the
     Trust Agreement).

       (iv) The Servicer shall perform the duties of the Sponsor specified in
     Section 11.2 of the Trust Agreement required to be performed in connection
     with the resignation or removal of the Owner Trustee, and any other duties
     expressly required to be performed by the Servicer under this Agreement or
     any of the Basic Documents.

       (v) In carrying out the foregoing duties or any of its other obligations
     under this Agreement, the Servicer may enter into transactions with or
     otherwise deal with any of its Affiliates; provided, however, that the
     terms of any such transactions or dealings shall be in accordance with any
     directions received from the Issuer and shall be, in the Servicer's
     opinion, no less favorable to the Issuer in any material respect.

     (c) Non-Ministerial Matters. With respect to matters that in the reasonable
judgment of the Servicer are non-ministerial, the Servicer shall not take any
action pursuant to this Article VIII unless within a reasonable time before the
taking of such action, the Servicer shall have

                                       48
<PAGE>

notified the Owner Trustee, the Insurer and Freddie Mac of the proposed action
and the Owner Trustee, the Insurer and Freddie Mac shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, "non-ministerial matters" shall include:

       (A) the amendment of or any supplement to the Pooling Agreement;

       (B) the initiation of any claim or lawsuit by the Issuer and the
     compromise of any action, claim or lawsuit brought by or against the Issuer
     (other than in connection with the collection of the Mortgage Loans);

       (C) the amendment, change or modification of this Agreement or any of the
     Basic Documents;

       (D) the appointment of successor Security Registrars, successor Paying
     Agents and successor Trustees pursuant to the Pooling Agreement or the
     appointment of successor Servicers or the consent to the assignment by the
     Security Registrar, Paying Agent or Trustee of its obligations under the
     Pooling Agreement; and

       (E) the removal of the Trustee.

     (d) Exceptions. Notwithstanding anything to the contrary in this Agreement,
except as expressly provided herein or in the other Basic Documents, the
Servicer, in its capacity hereunder, shall not be obligated to, and shall not,
(1) make any payments to the Securityholders or Residual Certificateholders
under the Basic Documents, (2) sell the Trust Property pursuant to Section 5.4
of the Pooling Agreement, (3) take any other action that the Issuer directs the
Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.

     (e) The Trustee or any successor Servicer shall not be responsible for any
obligations or duties of the Servicer under Section 8.01.

     Section 8.02. Records. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer
and the Trustee at any time during normal business hours.

     Section 8.03. Additional Information to be Furnished to the Issuer. The
Servicer shall furnish to the Issuer and the Trustee from time to time such
additional information regarding the Mortgage Loans as the Issuer and the
Trustee shall reasonably request.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

Section 9.01. Amendment. This Agreement may be amended from time to time by
agreement among the Sponsor, the Servicer, and the Trustee, in each case without
notice to or the consent of any of the Securityholders or Residual
Certificateholders, but only with the

                                       49
<PAGE>

consent of the Insurer and of Freddie Mac (which consent shall not be
unreasonably withheld), (i) to cure any ambiguity, (ii) to correct any defective
provisions or to correct or supplement any provisions herein that may be
inconsistent with any other provisions herein, (iii) to add to the duties of the
Sponsor or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising under this Agreement or the Policy, as the case may
be, which shall not be inconsistent with the provisions of this Agreement, (v)
to add or amend any provisions of this Agreement as required by any Rating
Agency or any other nationally recognized statistical rating organization in
order to maintain or improve any rating of the Securities (it being understood
that, after obtaining the ratings in effect on the Closing Date, neither the
Trustee, the Sponsor nor the Servicer is obligated to obtain, maintain or
improve any such rating) or (vi) to comply with any requirement imposed by the
Code; provided, however, that such action shall not, as evidenced by an Opinion
of Counsel, materially and adversely affect the interests of any Securityholder
or any Residual Certificateholder, the Insurer or Freddie Mac; and provided,
further, that the amendment shall be deemed not to adversely affect in any
material respect the interests of the Securityholders and the Residual
Certificateholders and no opinion referred to in the preceding proviso shall be
required to be delivered if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Securities without regard to the Policy or Guarantee.

     This Agreement also may be amended from time to time by agreement among the
Servicer, the Sponsor and the Trustee, with the consent of the Insurer, Freddie
Mac and the Holders of the Securities evidencing more than 50% of the
Outstanding Amount of the Securities and the Holders of the Residual
Certificates evidencing more than 50% of the percentage interest in the Residual
Certificates (which consent of such Holders of Securities and Residual
Certificates given pursuant to this Section 9.01 or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
all future Holders of such securities and of any security issued upon the
transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the security) for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Securityholders or the Residual Certificateholders; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments on the Securities or distributions or payments under the Policy
which are required to be made on any Security without the consent of the Holder
of such Security or (ii) reduce the aforesaid percentage required to consent to
any such amendment, without the consent of the Holders of all then outstanding
Securities and Residual Certificates or (iii) adversely affect in any material
respect the interests of the Insurer or the interests of Freddie Mac.

     Following the execution and delivery of any such amendment hereto or to the
Policy, either the Sponsor, if the Sponsor requested the amendment, or the
Servicer, if the Servicer requested the amendment, shall reimburse the Insurer
and Freddie Mac for the reasonable out-of-pocket costs and expenses incurred by
each in connection with such amendment.

     Prior to the execution of any such amendment, the party hereto requesting
any such amendment shall furnish written notification of the substance of such
amendment to each Rating Agency. In addition, promptly after the execution of
any such amendment made with the

                                       50
<PAGE>

consent of the Securityholders, the Trustee shall furnish written notification
of the substance of such amendment to each Securityholder and fully executed
original counterparts of the instruments effecting such amendment to the Insurer
and Freddie Mac.

     It shall not be necessary for the consent of Securityholders under this
Section 9.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Securityholders and Residual
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.

     In executing any amendment permitted by this Section 9.01, the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that such amendment is authorized or permitted hereby
and that all conditions precedent to the execution and delivery of such
amendment have been satisfied. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights, duties or
immunities under this Agreement or otherwise.

     Section 9.02. Recordation of Agreement. 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
Trustee, but only upon direction of Securityholders accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of Securityholders. The Securityholders requesting such
recordation shall bear all costs and expenses of such recordation. The Trustee
shall have no obligation to ascertain whether such recordation so affects the
interests of the Securityholders.

     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 9.03. Limitation on Rights of Securityholders. No Securityholder
shall have any right to vote (except as provided in Sections 6.01, 7.01, and
9.01 herein and Section 5.4 of the Pooling Agreement) or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Securities, be construed so as to constitute the Securityholders from
time to time as partners or members of an association; nor shall any
Securityholder 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 Securityholder shall have any right by virtue or by availing itself of
any provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Securities evidencing more than 50% of the Outstanding Amount of the
Securities shall have made written request upon the Trustee to institute such
action, suit or

                                       51

<PAGE>

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 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each Securityholder
with every other Securityholder and the Trustee, that no one or more Holders
of Securities shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the Securities,
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
Securityholders. For the protection and enforcement of the provisions of this
Section 9.03, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

     By accepting its Certificate, each Securityholder agrees that unless a
Insurer Default exists, the Insurer shall have the right to exercise all rights
of the Securityholder under this Agreement without any further consent of the
Securityholder.

     Section 9.04. 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 9.05. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified mail, return receipt requested, to (a) in
the case of the Sponsor, GreenPoint Mortgage Securities Inc., 700 Larkspur
Landing Circle, Suite 250, Larkspur, California 94939, Attention: Peter T. Paul,
(b) in the case of the Servicer, GreenPoint Mortgage Funding, Inc., 1100
Larkspur Landing Circle, Suite 101, Larkspur, California 94939, Attention:
Gilbert MacQuarrie, (c) in the case of the Trustee, at the Corporate Trust
Office, (d) in the case of the Insurer, Financial Guaranty Insurance Company,
115 Broadway, New York, New York 10006, Attention: Research and Risk Management
GreenPoint Home Equity Loan Trust--2000-2 (telecopy number (212) 312-3225), (e)
in the case of Freddie Mac, Federal Home Loan Mortgage Corporation, 8200 Jones
Branch Drive, McLean, Virginia 22102, Attention: Vice-President, Mortgage
Funding (telecopy number (703) 903-2138), (f) Moody's, Residential Loan
Monitoring Group, 4th Floor, 99 Church Street, New York, New York 10007, and (g)
in the case of Standard & Poor's, 55 Water Street, New York, New York 10041, or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party. Any notice required or permitted to be
mailed to a Securityholder shall be given by first class mail, postage prepaid,
at the address of such Holder as shown in the Security Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Securityholder or Residual
Certificateholder receives such notice. Any notice or other document required to
be delivered or mailed by the Trustee to any Rating Agency shall be given on a
best efforts basis and only as a matter of courtesy and accommodation and the
Trustee shall have no liability for failure to deliver such notice or document
to any Rating Agency.

                                       52
<PAGE>

     Section 9.06. 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 Securities or
the rights of the Holders thereof.

     Section 9.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 5.02 and 5.04, this Agreement
may not be assigned by the Sponsor or the Servicer without the prior written
consent of the Controlling Party and Holders of the Securities evidencing
Percentage Interests aggregating not less than 66%.

     Section 9.08. Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Residual
Certificateholders, the Security Owners, the Insurer, Freddie Mac and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person will have any right or obligation hereunder.

     Section 9.09. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

     Section 9.10. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

     Section 9.11. Insurance Agreement. The Trustee is authorized and directed
to execute and deliver the Insurance Agreement and to perform the obligations of
the Trustee thereunder. In addition, the Sponsor and Servicer hereby agree to
provide to Freddie Mac all of the information provided to the Insurer pursuant
to Section 2.03(f) of the Insurance Agreement.

     Section 9.12. Nonpetition Covenant. Until one year plus one day shall have
elapsed since the termination of the Trust in accordance with Section 7.01, none
of the Sponsor, the Company, the Servicer, nor the Trustee shall petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Sponsor or the Trust
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Sponsor or the Trust or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Sponsor or the Trust.

                                       53
<PAGE>

     IN WITNESS WHEREOF, the Sponsor, the Servicer and the Trustee have caused
this Agreement to be duly executed by their respective officers all as of the
day and year first above written.

                                     GREENPOINT MORTGAGE SECURITIES INC.,
                                       as Sponsor

                                     By: /s/ David Molumby
                                         -----------------------------------
                                         Name: David Molumby
                                         Title: Vice President

                                     GREENPOINT MORTGAGE FUNDING, INC.,
                                        as Company and Servicer

                                     By: /s/ Gilbert J. MacQuarrie
                                         -----------------------------------
                                         Name: Gilbert J. MacQuarrie
                                         Title: Executive Vice President/Chief
                                         Financial Officer

                                     BANK ONE, N.A.,
                                       as Trustee

                                     By: /s/ Steven E. Charles
                                         -----------------------------------
                                         Name: Steven E. Charles
                                         Title:

                                     GREENPOINT HOME EQUITY LOAN TRUST
                                        2000-2, as Issuer
                                        By: Wilmington Trust Company, not in its
                                        individual capacity but solely as Owner
                                        Trustee

                                     By: /s/ Anita Dallago
                                         -----------------------------------
                                         Name: Anita Dallago
                                         Title: Financial Services Officer

                         [Sale and Servicing Agreement]

<PAGE>

State of California      )
                         ) ss.:
County of Marin          )

On the 25th day of September, 2000 before me, a notary public in and for the
State of California, personally appeared David Molumby, known to me who, being
by me duly sworn, did depose and say that he resides at Larkspur, California;
that he is the Vice President of GreenPoint Mortgage Securities of GreenPoint
Mortgage Securities Inc., a Delaware corporation, one of the parties that
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.

                                             /s/ Melissa S. Farley
                                             -----------------------------------
                                             Notary Public

[Notarial Seal]

<PAGE>

State of Delaware      )
                       ) ss.:
County of New Castle   )

On the 22th day of September, 2000 before me, a notary public in and for the
State of Delaware, personally appeared Anita E. Dallago, known to me who, being
by me duly sworn, did depose and say that he resides at Delaware; that he is the
FSO of Wilmington Trust Corporation, a Delaware corporation, one of the parties
that executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.

                                              /s/ Leigh Emmi
                                              ----------------------------------
                                              Notary Public

[Notarial Seal]

<PAGE>

State of California    )
                       ) ss.:
County of Marin        )

On the 25th day of September, 2000 before me, a notary public in and for the
State of California, personally appeared Gilbert J. MacQuarrie, known to me who,
being by me duly sworn, did depose and say that he resides at Larkspur,
California; that he is the Executive Vice President/Chief Financial Officer of
GreenPoint Mortgage Funding, Inc., a closely-held California corporation, one of
the parties that executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that he signed his name thereto by like order.

                                           /s/ Melissa S. Farley
                                           ------------------------------
                                           Notary Public

[Notarial Seal]

<PAGE>

State of New York      )
                       ) ss.:
County of New York     )

On the 25th day of September, 2000 before me, a notary public in and for the
State of New York, personally appeared Steven E. Charles, known to me who, being
by me duly sworn, did depose and say that he resides at 153 N. Dixon, Batavia
IL; that he is a Vice President of Bank One, N.A., a National Banking
Association, one of the parties that executed the foregoing instrument; and that
he signed his name thereto by order of the Board of Directors of said
corporation.

                                           /s/ Marlene J. Horowitz
                                           -----------------------------------
                                           Notary Public

[Notarial Seal]

<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                             MORTGAGE LOAN SCHEDULE

                             [On file with Trustee]

                                      A-1

<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                           FORM OF OPINION OF COUNSEL
                       WITH RESPECT TO SECTION 3.11 OF THE
                          SALE AND SERVICING AGREEMENT

The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the opinions of counsel
to the Company delivered on the Closing Date. Unless otherwise indicated, all
capitalized terms used herein shall have the meanings ascribed to them in the
Sale and Servicing Agreement dated as of September 1, 2000 among GreenPoint
Mortgage Funding, Inc. (the "Company" and the "Servicer"), GreenPoint Mortgage
Securities Inc. (the "Sponsor") and Bank One, N.A., as Trustee. Terms used but
not defined herein shall have the meaning given to such terms in the
above-referenced Sale and Servicing Agreement.

The Trustee has a valid perfected first priority security interest with respect
to the Sponsor's right, title and interest in and to the Mortgage Loans
(including all Eligible Substitute Mortgage Loans).

                                      B-1

<PAGE>

                                                                     EXHIBIT C-1
                                                                     -----------

                              OFFICER'S CERTIFICATE

                      REQUEST BY THE SERVICER FOR PERMANENT
                  RELEASE OF MORTGAGE LOANS AND MORTGAGE FILES

TO:  Bank One, N.A.,
       as Trustee
     1 Bank One Plaza
     Suite ILI-0126
     Chicago, IL 60670-0126

Gentlemen:

In connection with the payment in full of the Mortgage Loans held by you as
Trustee, under the Sale and Servicing Agreement dated as of September 1, 2000
among GreenPoint Mortgage Funding, Inc., as Servicer, GreenPoint Mortgage
Securities Inc., as Sponsor, and you, as Trustee, the undersigned requests the
release of the Mortgage Loans and the Mortgage Files for the Mortgage Loans
identified in the schedule attached to this Request.

The undersigned hereby certifies that any and all payments received on the
Mortgage Loans identified in the schedule attached to this Request which are
required to be deposited in the Collection Account pursuant to Section 3.02 of
such Sale and Servicing Agreement have been so deposited.

                                             GREENPOINT MORTGAGE FUNDING, INC.,
                                               as Servicer

                                             By:
                                                -------------------------------
                                                 Name:
                                                      -------------------------
                                                 Title:
                                                      -------------------------
                                                 Date:
                                                     --------------------------

ACKNOWLEDGED BY:

BANK ONE, N.A.,
  as Trustee

By:
   -------------------------------
     Name:
          ------------------------
     Title:
           -----------------------
     Date:
          ------------------------

                                     C-1-1

<PAGE>

                                                                     EXHIBIT C-2
                                                                     -----------

                              OFFICER'S CERTIFICATE

                      REQUEST BY THE SERVICER FOR TEMPORARY
                  RELEASE OF MORTGAGE LOANS AND MORTGAGE FILES

TO:   Bank One, N.A.,
        as Trustee
      1 Bank One Plaza
      Suite ILI-0126
      Chicago, IL 60670-0126

Gentlemen:

In connection with the administration of the Mortgage Loans held by you as
Trustee, under the Sale and Servicing Agreement dated as of September 1, 2000
among GreenPoint Mortgage Funding, Inc., as Servicer, GreenPoint Mortgage
Securities Inc., as Sponsor, and you, as Trustee, the undersigned requests the
temporary release of the Mortgage Loans and the related Mortgage Files for the
Mortgage Loans identified in the schedule attached to this Request.

                                           GREENPOINT MORTGAGE FUNDING, INC.,
                                             as Servicer

                                           By:
                                              --------------------------------
                                              Name:
                                                  ----------------------------
                                              Title:
                                                   ---------------------------
                                              Date:
                                                  ----------------------------

ACKNOWLEDGED BY:

BANK ONE, N.A.,
as Trustee

By:
   -------------------------------
    Name:
         -------------------------
    Title:
          ------------------------
    Date:
        --------------------------

                                     C-2-1

<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                          FORM OF CREDIT LINE AGREEMENT

                                      D-1

<PAGE>

                                                                       EXHIBIT E
                                                                       ---------

                            FORM OF MORTGAGE NOTE FOR
                            CLOSED END MORTGAGE LOANS

                                      E-1

<PAGE>

                                                                     EXHIBIT F-1
                                                                     -----------

                         FORM OF FREDDIE MAC CERTIFICATE
                             BOND SUMMARY REPORTING

DETAIL RECORD FIELDS:                                  FILE NAME:  T0NNMMYY.BND

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
  FIELD NAME          FLD NBR   FORMAT       FIELD POSITION                    DEFINITION
---------------------------------------------------------------------------------------------------------------------------
<S>                   <C>      <C>           <C>              <C>
Series #  (Deal          1      10 (x)           001-010       As defined by issuer or as assigned - T0nn
Identifier)
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           011
---------------------------------------------------------------------------------------------------------------------------
Class #                  2       2 (x)           012-013       As assigned or determined by issuer.  Input default value if
                                                               not applicable.
---------------------------------------------------------------------------------------------------------------------------
Blank                            5 (x)           014-018
---------------------------------------------------------------------------------------------------------------------------
CUSIP #                  3       9 (x)           019-027       If not available, Input default value.  Freddie Mac may
                                                               provide dummy numbers, if CUSIP numbers are not assigned by
                                                               the issuer.
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           028
---------------------------------------------------------------------------------------------------------------------------
Coupon - Current         4       6.3             029-034       Bond Coupon Rate
Pass-through Rate
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           035
---------------------------------------------------------------------------------------------------------------------------
Original Face Value      5      13.2             036-048       Par Value, original issue amount, of Class
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           049
---------------------------------------------------------------------------------------------------------------------------
Beginning Unpaid         6      13.2             050-062       Beginning Class UPB as of beginning of cycle
Principal Balance
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           063
---------------------------------------------------------------------------------------------------------------------------
Principal payment        7      13.2             064-076       Dollar amount of class principal payment
amount
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           077
---------------------------------------------------------------------------------------------------------------------------
Interest payment amount  8      13.2             078-090       Dollar amount of class interest payment
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           091
---------------------------------------------------------------------------------------------------------------------------
Total Distribution       9      13.2             092-104       Dollar amount of principal & interest payment
---------------------------------------------------------------------------------------------------------------------------
Blank                             1 (x)          105
---------------------------------------------------------------------------------------------------------------------------
Deferred Interest        10     13.2             106-118       Dollar amount of overcollateralization  (Difference between
                                                               security principal and mortgage principal balances applied
                                                               this period.  This can include non-cash allocations)
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           119
---------------------------------------------------------------------------------------------------------------------------
Principal Loss           11     13.2             120-132       Dollar amount of principal losses applied this period
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           133
---------------------------------------------------------------------------------------------------------------------------
Interest Loss            12     13.2             134-146       Dollar amount of interest losses applied this period
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           147
---------------------------------------------------------------------------------------------------------------------------
Ending Unpaid            13     13.2             148-160       Ending Class UPB as of beginning of cycle
Principal Balance
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           161
---------------------------------------------------------------------------------------------------------------------------
Principal Distribution   14      9.7             162-170       Factor representing the principal payment divided by the
Factor                                                         Original UPB of the class.

<PAGE>

---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           171
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     F-1-1

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
  FIELD NAME          FLD NBR   FORMAT       FIELD POSITION                    DEFINITION
---------------------------------------------------------------------------------------------------------------------------
<S>                   <C>      <C>           <C>              <C>
Interest Distribution    15      9.7             172-180       Factor representing the interest payment divided by the
Factor                                                         Original UPB of the class.
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           181
---------------------------------------------------------------------------------------------------------------------------
Prepayment Interest      16      9.7             182-190       If loans were prepaid and an interest shortfall arose in
Shortfall                                                      this period, it should be entered in this field.  If not
                                                               applicable, a zero should be used.
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           191
---------------------------------------------------------------------------------------------------------------------------
Total Distribution       17      9.7             192-200       Factor representing the combined principal and interest
Factor                                                         payment divided by the Original UPB of the class.
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           201
---------------------------------------------------------------------------------------------------------------------------
Deferred Interest        18      9.7             202-210       Factor representing any increase in residual class due to
Factor                                                         credit enhancement requirements.  This is determined by
                                                               dividing the increase amount by the original UPB.
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           211
---------------------------------------------------------------------------------------------------------------------------
Ending Principal         19      9.7             212-220       Ending UPB divided by original UPB.
Balance Factor
---------------------------------------------------------------------------------------------------------------------------
Blank                            1 (x)           221
---------------------------------------------------------------------------------------------------------------------------
Remaining Unpaid         20     13.2             222-234       If interest should be due, but not received on a given
Interest                                                       amount, then that amount should be entered.
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     F-1-2

<PAGE>

                                                                     EXHIBIT F-2
                                                                     -----------

                        FORM OF FREDDIE MAC CERTIFICATE:
                              LOAN LEVEL REPORTING

DETAIL RECORD FIELDS:                                    FILE NAME: T0##MMYY.LNS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
DATA: T0NNMMYY.LNS     FIELD NBR   FORMAT            DEFINITION
-----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>               <C>
Servicer Loan No.         1        13(X)             Unique loan number assigned to the mortgage by the Seller/Servicer
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Due Date of Last Paid     2        YYYYMMDD          DUE DATE of last full payment received from the borrower.
Installment  (DDLPI)
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Last Payment Received     3        YYYYMMDD          RECEIPT DATE of the last fully paid monthly installment of principal,
Date (LPRD)                                          interest, and escrow  (if any) that was received from the borrower.
                                                     Note:  Dates of partial payments should not be entered here.  {Data is
                                                     when payment was actually received from the borrower)  IF THIS
                                                     INFORMATION IS NOT AVAILABLE, THEN  POPULATE THE FIELD WITH THE DEFAULT
                                                     VALUE OF 19000101.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Unpaid Principal          4        13.2              Unpaid Principal balance as of the end of the current period
Balance (UPB) 100%
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Interest Paid             5        13.2              Gross / Coupon Interest payment amount
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Principal Paid            6        13.2              Total principal paid down on the mortgage balance.

                                                     *  For approved payment reversals or principal applied incorrectly in a
                                                        prior cycle the amount of negative principal to bring the mortgage
                                                        balance in line with the correct UPB reported.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Draw Amount               7        13.2              Total draws made against the line of credit for the current month
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     F-2-1

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
DATA: T0NNMMYY.LNS     FIELD NBR   FORMAT            DEFINITION
-----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>               <C>
Exception Code            8        2(x)              This field should contain an exception code only when exception activity
                                                     occurs for that period, otherwise this field should contain a 0.
                                                     DEFAULT VALUE IS 0.
                                                     40 Inactivate loan, deemed the loan non-recoverable
                                                     60 Payoff - mortgage matured
                                                     61 Payoff - mortgage prepaid
                                                     65 Payoff - mortgage repurchased
                                                     69 Payoff - mortgage liquidated
                                                     70 Transfer to REO (status change exception)
                                                     72 Foreclosure (change of status from Active to Foreclosure)
                                                     80 Substituted Loan - Loan is added as a substitute for another loan
                                                     81 Reinstated Loan - Loan was previously delinquent, but the borrower has
                                                        brought it current.
                                                     90 Loan Modified - This is an exceptional activity code which is reserved
                                                        for future use. Modifications typically require repurchase from the trust
                                                        prior to modifying the loan.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Exception Date            9        YYYYMMDD          Date the exception occurred.  If an exception has not occurred, this
                                                     field should contain the default value of 19000101.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Mortgage Note Rate        10       6.3               Rate associated with the borrower's scheduled payment
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Mortgage P&I Amount       11       13.2              Principal and interest portion of the borrowers minimum installment.
                                                     Note:  100% of the principal and interest amount should be entered in
                                                     this field, including servicing and guarantee fees.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Realized Losses           12       13.2              Amount of realized losses for that period.  This field will also include
                                                     any supplemental claims or proceeds for loans liquidated in a previous
                                                     cycle.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Cumulative Principal      13       13.2              Total principal payments advanced by the Servicer and not repaid by the
Advances                                             borrower.
                                                     NOT APPLICABLE--DO NOT REPORT
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Interest Advances         14       13.2              Amount of interest payment advanced by the Servicer for that period.
                                                     NOT APPLICABLE--DO NOT REPORT
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Loan Status               15       1(X)              Pertains to activity in the prior reporting cycle.
                                                     0 - Active
                                                     4 - Foreclosure
                                                     5 - REO
                                                     6 - Closed (PAYOFFS & REPURCHASES)
                                                     9 - Bankruptcy (OVERRIDES Active Status)
                                                     Note: 30,60 & 90 day delinquency status will be derived from the DDLPI
                                                     field.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Subservicer No.           16        6                Subservicer ID# - S/S# assigned by Freddie Mac - 6 digits
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Actual Loan Balance       17       13.2              Actual loan balance outstanding from the borrower.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     F-2-2

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
DATA: T0NNMMYY.LNS     FIELD NBR   FORMAT            DEFINITION
-----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>               <C>
Next Interest Rate        18       YYYYMMDD          Applies only to ARM loans and reflects the next pending interest rate
Change Date                                          adjustment date. DEFAULT IS 19000101.  SINCE LOANS ADJUST MONTHLY, ONLY
                                                     REPORT THE FIRST ADJUSTMENT DATE FOR LOANS WITH TEASER PERIOD.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Next Interest Payment     19       YYYYMMDD          Applies only to payment capped ARM loans and reflects the next pending
Change Date                                          payment adjustment date. DEFAULT IS 19000101.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Index Value at Reset      20       6.3               The index rate used in determining the ARM coupon.
Date                                                 DEFAULT VALUE IS 0 FOR AN ARM LOAN IF THE INDEX IS NOT CHANGING IN THE
                                                     CURRENT PERIOD.  ALSO POPULATE 0 IF THE LOAN IS A FIXED RATE LOAN.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Next Mortgage Rate        21       6.3               Should be populated in advance of the rate adjustment.. DEFAULT VALUE IS
EXPECTED AT RESET DATE                               0 FOR AN ARM LOAN IF THE RATE IS NOT CHANGING.  DEFAULT VALUE IS 0 IF
                                                     THE LOAN IS A FIXED RATE LOAN.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Collateral Group No. #    22       2                 This is a collateral grouping number for whole loan directed collateral
                                                     deals. DEFAULT VALUE IS 0.  REPORT THE HELOCS AND FIXED RATES SEPARATELY.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Current Arrearage Paid    23       13.2              The current amount of cashflow applied to the arrearage balance.
                                                     Applies to loans that have been or are currently in default. DEFAULT
                                                     VALUE IS 0.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Outstanding Arrearage     24       13.2              The total amount of outstanding interest accrued under forbearance
Balance                                              period, after current arrearage payment. DEFAULT VALUE IS 0.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Freddie Mac Loan Number   25       13(X)             Unique & permanent loan number assigned to the mortgage by Freddie Mac.
                                                     Used for disclosure.
-----------------------------------------------------------------------------------------------------------------------------
Blank                              1(x)
-----------------------------------------------------------------------------------------------------------------------------
Prepayment Premium        26       13.2              The borrowers penalty payment for prepaying his mortgage.  This amount
Amount                                               is allocated  in aggregate as a directed collateral amount to a specific
                                                     bond. DEFAULT VALUE IS 0.
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Notes:
o    File must be a text file (either space or tab delimited).
o    Any dates should be in YYYYMMDD format.  They should not contain slashes
     (/) or dashes (-).
o    Number fields should NOT include commas.
o    Any negative number should be denoted by a "-" in front of the number, do
     not put the "-" after the number or use parentheses.

                                     F-2-3<PAGE>

                                                                  EXECUTION COPY

================================================================================

                                 TRUST AGREEMENT

                                     between

                       GREENPOINT MORTGAGE SECURITIES INC.
                                     Sponsor

                                       and

                            WILMINGTON TRUST COMPANY
                                  Owner Trustee

                          Dated as of September 1, 2000

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
<S>                                                                                                             <C>
ARTICLE I Definitions.............................................................................................1

     SECTION 1.1.   Defined Terms.................................................................................1
     SECTION 1.2.   Other Definitional Provisions.................................................................2
     SECTION 1.3.   Action by or Consent of Securityholders and Residual Certificateholders.......................3

ARTICLE II Organization...........................................................................................3

     SECTION 2.1.   Name..........................................................................................3
     SECTION 2.2.   Office........................................................................................3
     SECTION 2.3.   Purposes and Powers...........................................................................4
     SECTION 2.4.   Appointment of Owner Trustee..................................................................4
     SECTION 2.5.   Initial Capital Contribution of Trust Estate..................................................4
     SECTION 2.6.   Declaration of Trust..........................................................................5
     SECTION 2.7.   Liability.....................................................................................5
     SECTION 2.8.   Title to Trust Property.......................................................................5
     SECTION 2.9.   Situs of Trust................................................................................5
     SECTION 2.10.  Representations and Warranties of the Sponsor.................................................6
     SECTION 2.11.  Federal Income Tax Allocations................................................................7
     SECTION 2.12.  Covenants of the Sponsor......................................................................8
     SECTION 2.13.  Covenants of the Residual Certificateholders..................................................8

ARTICLE III Certificates and Transfer of Interests................................................................9

     SECTION 3.1.   Form..........................................................................................9
     SECTION 3.2.   Execution, Authentication and Delivery, Security Interest.....................................9
     SECTION 3.3.   Registration; Registration of Transfer and Exchange..........................................10
     SECTION 3.4.   Mutilated, Destroyed, Lost or Stolen Securities..............................................12
     SECTION 3.5.   Persons Deemed Owners........................................................................13
     SECTION 3.6.   Payment of Principal and Interest............................................................13
     SECTION 3.7.   Cancellation.................................................................................13
     SECTION 3.8.   Book-Entry Securities........................................................................13
     SECTION 3.9.   Notices to Clearing Agency...................................................................14
     SECTION 3.10.  Definitive Securities........................................................................14

ARTICLE IV Ownership of Trust Property; Residual Certificates and Transfer of Interests..........................15

     SECTION 4.1.   Trust Property Ownership.....................................................................15
     SECTION 4.2.   The Residual Certificates....................................................................16
     SECTION 4.3.   Authentication of Residual Certificates......................................................16
     SECTION 4.4.   Registration of Transfer and Exchange of Residual Certificates...............................16
     SECTION 4.5.   Mutilated, Destroyed, Lost or Stolen Residual Certificates...................................17
</TABLE>

                                       i

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                             <C>
     SECTION 4.6.   Persons Deemed Residual Certificateholders...................................................17
     SECTION 4.7.   Access to List of Residual Certificateholders' Names and Addresses...........................17
     SECTION 4.8.   Maintenance of Office or Agency..............................................................18
     SECTION 4.9.   ERISA Restrictions...........................................................................18
     SECTION 4.10.  Restrictions on Transfer of Residual Certificates............................................18
     SECTION 4.11.  Acceptance of Obligations....................................................................20
     SECTION 4.12.  Distributions on Residual Certificates.......................................................20

ARTICLE V Voting Rights and Other Actions........................................................................20

     SECTION 5.1.   Prior Notice to Holders with Respect to Certain Matters......................................20
     SECTION 5.2.   Action by Residual Certificateholders with Respect to Certain Matters........................20
     SECTION 5.3.   Action with Respect to Bankruptcy............................................................21
     SECTION 5.4.   Restrictions on Residual Certificateholders' Power...........................................21
     SECTION 5.5.   Majority Control.............................................................................22
     SECTION 5.6.   Rights of the Controlling Party..............................................................22

ARTICLE VI Certain Duties........................................................................................22

     SECTION 6.1.   Accounting and Records to the Class A-1 Securityholders, Residual
                          Certificateholders, the Internal Revenue Service and Others............................22
     SECTION 6.2.   Signature on Returns; Tax Matters Partner....................................................23
     SECTION 6.3.   Certificate Purchase Agreement and Underwriting Agreement....................................23

ARTICLE VII Authority and Duties of Owner Trustee................................................................23

     SECTION 7.1.   General Authority............................................................................23
     SECTION 7.2.   General Duties...............................................................................24
     SECTION 7.3.   Action upon Instruction......................................................................24
     SECTION 7.4.   No Duties Except as Specified in this Agreement or in Instructions...........................25
     SECTION 7.5.   No Action Except under Specified Documents or Instructions...................................25
     SECTION 7.6.   Restrictions.................................................................................26

ARTICLE VIII Concerning the Owner Trustee........................................................................26

     SECTION 8.1.   Acceptance of Trust and Duties...............................................................26
     SECTION 8.2.   Furnishing of Documents......................................................................27
     SECTION 8.3.   Representations and Warranties...............................................................27
     SECTION 8.4.   Reliance; Advice of Counsel..................................................................27
     SECTION 8.5.   Not Acting in Individual Capacity............................................................28
     SECTION 8.6.   Owner Trustee Not Liable for Securities, Residual Certificates or Mortgage Loans.............28
     SECTION 8.7.   Owner Trustee May Own Securities and Residual Certificates...................................29
     SECTION 8.8.   Payments from Owner Trust Estate.............................................................29
     SECTION 8.9.   Doing Business in Other Jurisdictions........................................................29
</TABLE>

                                       ii

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                             <C>
ARTICLE IX Compensation of Owner Trustee.........................................................................29

     SECTION 9.1.   Owner Trustee's Fees and Expenses............................................................29
     SECTION 9.2.   Indemnification..............................................................................29
     SECTION 9.3.   Payments to the Owner Trustee................................................................30
     SECTION 9.4.   Non-recourse Obligations.....................................................................30

ARTICLE X Termination of Trust Agreement.........................................................................30

     SECTION 10.1.  Termination of Trust Agreement...............................................................30

ARTICLE XI Successor Owner Trustees and Additional Owner Trustees................................................32

     SECTION 11.1.  Eligibility Requirements for Owner Trustee...................................................32
     SECTION 11.2.  Resignation or Removal of Owner Trustee......................................................32
     SECTION 11.3.  Successor Owner Trustee......................................................................33
     SECTION 11.4.  Merger or Consolidation of Owner Trustee.....................................................33
     SECTION 11.5.  Appointment of Co-Owner Trustee or Separate Owner Trustee....................................34

ARTICLE XII Miscellaneous........................................................................................35

     SECTION 12.1.  Supplements and Amendments...................................................................35
     SECTION 12.2.  No Legal Title to Owner Trust Estate in Residual Certificateholders..........................36
     SECTION 12.3.  Limitations on Rights of Others..............................................................36
     SECTION 12.4.  Notices......................................................................................36
     SECTION 12.5.  Severability.................................................................................37
     SECTION 12.6.  Separate Counterparts........................................................................37
     SECTION 12.7.  Assignments; Insurer and Freddie Mac.........................................................37
     SECTION 12.8.  No Petition..................................................................................38
     SECTION 12.9.  No Recourse..................................................................................38
     SECTION 12.10. Headings.....................................................................................38
     SECTION 12.11. GOVERNING LAW................................................................................38
     SECTION 12.12. Servicer.....................................................................................38
</TABLE>

EXHIBITS

Exhibit A    Form of Class A-1 Certificate
Exhibit B    Form of Residual Certificate
Exhibit C    Form of Certificate of Trust

                                      iii

<PAGE>

     TRUST AGREEMENT dated as of September 1, 2000 (the "Agreement") between
GREENPOINT MORTGAGE SECURITIES INC., a Delaware corporation (the "Sponsor"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation as Owner Trustee.

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.1. Defined Terms. For the purposes of this Agreement, the
following terms shall have the meanings set forth below. All other capitalized
terms used herein but not defined shall have the meanings set forth in Annex A
to the Pooling Agreement and Indenture dated as of September 1, 2000 (the
"Pooling Agreement"), between the Issuer and the Trustee, as the same may be
amended and supplemented from time to time.

     "Affiliate" shall mean with respect to any specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, or owns, directly or indirectly,
50% or more of, the Person specified.

     "Agreement" shall mean this Trust Agreement, as the same may be amended and
supplemented from time to time.

     "Benefit Plan" shall have the meaning assigned to such term in Section 4.9.

     "Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss. 3801 et seq. as the same may be amended from time to
time.

     "Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit C to be filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.

     "Class A-1 Certificate" shall mean a trust certificate evidencing the
beneficial ownership interest of a Securityholder in the Trust, substantially in
the form of Exhibit A attached hereto.

     "Definitive Residual Certificates" shall mean Residual Certificates issued
in certificated, fully registered form.

     "Definitive Securities" shall mean Securities issued in certificated, fully
registered form.

     "Expenses" shall have the meaning assigned to such term in Section 9.2.

     "Holder" shall mean, as appropriate, the Person in whose name a Security is
registered on the Security Register or in whose name a Residual Certificate is
registered on the Residual Certificate Register.

     "Indemnified Parties" shall have the meaning assigned to such term in
Section 9.2.

<PAGE>

     "Instructing Party" shall have the meaning assigned to such term in Section
7.3.

     "Owner" shall have the meaning assigned to such term in Section 3.5.

     "Owner Trust Estate" shall mean all right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to Article II
of the Sale and Servicing Agreement, all funds on deposit from time to time in
the Collection Account and all other property of the Trust from time to time,
including any rights of the Issuer pursuant to the Sale and Servicing Agreement
and any rights of the Sponsor, in its capacity as Purchaser, pursuant to the
Mortgage Loan Purchase Agreement.

     "Proposer" shall have the meaning ascribed to it in Section 5.2(b) herein.

     "Residual Certificate" shall mean a trust certificate evidencing the
beneficial ownership interest of a Residual Certificateholder in the Trust,
substantially in the form of Exhibit B attached hereto.

     "Residual Certificateholder" shall mean the Person in whose name a Residual
Certificate is registered on the Residual Certificate Register.

     "Residual Certificate Register" and "Residual Certificate Registrar" shall
mean the register maintained and the registrar respectively appointed pursuant
to Section 4.4.

     "Secretary of State" shall mean the Secretary of State of the State of
Delaware.

     "Security" shall mean a Class A-1 Certificate or a Class A-2 Note.

     "Securityholder" shall mean the Person in whose name a Security is
registered on the Security Register.

     "Security Majority" shall mean a majority by principal amount of the
Securityholders so long as the Securities are outstanding and a majority by
principal amount of the Residual Certificateholders thereafter.

     "Security Register" and "Security Registrar" shall mean the register
maintained and the registrar respectively appointed pursuant to Section 3.3.

     "Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

     SECTION 1.2. Other Definitional Provisions.

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

                                       2
<PAGE>

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

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

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

     SECTION 1.3. Action by or Consent of Securityholders and Residual
Certificateholders. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Securityholders or Residual Certificateholders,
such provision shall be deemed to refer to the Securityholder or Residual
Certificateholder, as the case may be, of record as of the Record Date
immediately preceding the date on which such action is to be taken, or consent
given, by Securityholders or Residual Certificateholders. Solely for the
purposes of any action to be taken, or consented to, by Securityholders or
Residual Certificateholders, any Security or Residual Certificate registered in
the name of the Sponsor or any Affiliate thereof shall be deemed not to be
outstanding; provided, however, that, solely for the purpose of determining
whether the Trustee is entitled to rely upon any such action or consent, only
Securities or Residual Certificates which the Owner Trustee, or the Trustee,
respectively, knows to be so owned shall be so disregarded.

                                   ARTICLE II

                                  ORGANIZATION

     SECTION 2.1. Name. There is hereby formed a trust to be known as
"GreenPoint Home Equity Loan Trust 2000-2", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.

     SECTION 2.2. Office. The office of the Trust shall be in the care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Residual
Certificateholders, the Holders of the Class A-1 Certificates and the Sponsor.

                                       3
<PAGE>

     SECTION 2.3. Purposes and Powers.

     (a) The purpose of the Trust is, and the Trust shall have the power and
authority, to engage in the following activities:

       (i) to issue the Class A-2 Notes pursuant to the Pooling Agreement and
     the Class A-1 Certificates and the Residual Certificates pursuant to this
     Agreement, and to sell the Securities;

       (ii) to assign, grant, transfer, pledge, mortgage and convey the Owner
     Trust Estate to the Trustee on behalf of the Securityholders and for the
     benefit of the Insurer and Freddie Mac and to hold, manage and distribute
     to the Residual Certificateholders pursuant to the terms of the Sale and
     Servicing Agreement any portion of the Owner Trust Estate released from the
     Lien of, and remitted to the Trust pursuant to, the Pooling Agreement;

       (iii) with the proceeds of the sale of the Securities, to pay the
     organizational, start-up and transactional expenses of the Trust and to pay
     the balance to the Sponsor pursuant to the Sale and Servicing Agreement;

       (iv) to enter into and perform its obligations under the Basic Documents
     to which it is a party;

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

       (vi) subject to compliance with the Basic Documents, to engage in such
     other activities as may be required in connection with conservation of the
     Owner Trust Estate and the making of distributions to the Securityholders
     and the Residual Certificateholders.

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

     SECTION 2.4. Appointment of Owner Trustee. The Sponsor hereby appoints the
Owner Trustee as trustee of the Trust effective as of the date hereof, to have
all the rights, powers and duties set forth herein.

     SECTION 2.5. Initial Capital Contribution of Trust Estate. The Sponsor
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt
in trust from the Sponsor, as of the date hereof, of the foregoing contribution,
which shall constitute the initial Owner Trust Estate and shall be deposited in
the Collection Account. On or prior to the Closing Date, the Owner Trustee will
also, upon receipt thereof, acknowledge on behalf of the Trust receipt of the

                                       4
<PAGE>

Mortgage Loans pursuant to the Sale and Servicing Agreement. The Sponsor shall
pay organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.

     SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Residual Certificateholders,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income tax purposes, the Trust shall be treated as a branch;
provided, however, that in the event Residual Certificates are owned by more
than one Residual Certificateholder, it is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall then be
treated as a partnership and that, unless otherwise required by appropriate tax
authorities, only after such time the Trust will file or cause to be filed
annual or other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes. Effective
as of the date hereof, the Owner Trustee shall have all rights, powers and
duties set forth herein and to the extent not inconsistent herewith, in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust with the Secretary of
State.

     SECTION 2.7. Liability. No Holder shall have any personal liability for any
liability or obligation of the Trust.

     SECTION 2.8. Title to Trust Property.

     (a) Legal title to all the Owner Trust Estate shall be vested at all times
in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Owner Trust Estate to be vested
in a trustee or trustees, in which case title shall be deemed to be vested in
the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.

     (b) The Holders shall not have legal title to any part of the Trust
Property. The Holders shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Article IX.
No transfer, by operation of law or otherwise, of any right, title or interest
by any Residual Certificateholder or any Holder of any Class A-1 Certificate of
its ownership interest in the Owner Trust Estate shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Trust Property.

     SECTION 2.9. Situs of Trust. The Trust will be located and administered in
the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
Illinois. Payments will be received by the Trust only in Delaware or Illinois
and payments will be made by the Trust only from Delaware or Illinois. The Trust
shall not have any employees in any state other than Delaware; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee, the
Servicer

                                       5
<PAGE>

or any agent of the Trust from having employees within or without the State of
Delaware. The only office of the Trust will be at the Corporate Trust Office in
Delaware.

     SECTION 2.10. Representations and Warranties of the Sponsor. The Sponsor
makes the following representations and warranties on which the Owner Trustee
relies in accepting the Owner Trust Estate in trust and issuing the Securities
and the Residual Certificates, upon which the Insurer relies in issuing the
Policy and upon which Freddie Mac relies in providing the Guarantee.

     (a) The Sponsor is duly organized and validly existing as a Delaware
corporation with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted and is proposed to be conducted pursuant to this Agreement and the
Basic Documents;

     (b) It is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of its property, the conduct of
its business and the performance of its obligations under this Agreement and the
Basic Documents requires such qualification;

     (c) The Sponsor has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms; this Agreement, when executed
and delivered by the Sponsor, will constitute the legal, valid and binding
obligations of the Sponsor, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles; the Sponsor has full power and authority to sell
and assign the property to be sold and assigned to and deposited with the Trust
and the Sponsor has duly authorized such sale and assignment and deposit to the
Trust by all necessary corporate action; and the execution, delivery and
performance of this Agreement has been duly authorized by the Sponsor by all
necessary corporate action;

     (d) No consent, license, approval or authorization or registration or
declaration with, any Person or with any governmental authority, bureau or
agency is required in connection with the execution, delivery or performance of
this Agreement and the Basic Documents, except for such as have been obtained,
effected or made;

     (e) The consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms hereof do not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the certificate of incorporation or by-laws of
the Sponsor, or any material indenture, agreement or other instrument to which
the Sponsor is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the best of the Sponsor's knowledge, any
order, rule or regulation applicable to the Sponsor of any court or of any
Federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Sponsor or its properties; and

                                       6
<PAGE>

     (f) There are no proceedings or investigations pending or, to its knowledge
threatened against it before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality having jurisdiction over it or
its properties (A) asserting the invalidity of this Agreement or any of the
Basic Documents, (B) seeking to prevent the issuance of the Securities or the
Residual Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Basic Documents, or (D) seeking to adversely affect the
federal income tax or other federal, state or local tax attributes of the
Securities or the Residual Certificates.

     SECTION 2.11. Federal Income Tax Allocations. For so long as the Trust has
a single owner for federal income tax purposes, it will, pursuant to Treasury
Regulations promulgated under section 7701 of the Code, be disregarded as an
entity distinct from the Certificateholder for all federal income tax purposes.
Accordingly, for federal income tax purposes, the Certificateholder will be
treated as (i) owning all assets owned by the Trust, (ii) having incurred all
liabilities incurred by the Trust, and (iii) all transactions between the Trust
and the Certificateholder will be disregarded.

     (b) Neither the Owner Trustee nor any Certificateholder will, under any
circumstances, and at any time, make an election on IRS Form 8832 or otherwise,
to classify the Trust as an association taxable as a corporation for federal,
state or any other applicable tax purpose.

     (c) In the event that the Trust is treated as a partnership for Federal
income tax purposes, net income of the Trust for any month as determined for
Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated: (i) to the
extent of available net income, among the Residual Certificateholders and the
Holders of any other securities treated as equity in the partnership as of the
first Record Date following the end of such month, in proportion to their
ownership of principal amount of Residual Certificates and any such securities
on such date; (ii) to the Sponsor, to the extent of any remaining net income.

     If the net income of the Trust for any month is insufficient for the
allocations described in clause (i) above, subsequent net income shall first be
allocated to make up such shortfall before being allocated as provided in clause
(ii). Net losses of the Trust, if any, for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated among the Residual
Certificateholders and the Holders of any other securities treated as equity in
the partnership as of the Record Date in proportion to their ownership
percentage of principal amount of Residual Certificates and any such securities,
respectively, on such Record Date until the principal balance of the Residual
Certificates and any such securities is reduced to zero. The Sponsor is
authorized to modify the allocations in this paragraph if necessary or
appropriate, in its sole discretion, for the allocations to fairly reflect the
economic income, gain or loss to the Residual Certificateholders and the Holders
of any other securities treated as equity in the partnership, or as otherwise
required by the Code.

                                       7
<PAGE>

     SECTION 2.12. Covenants of the Sponsor. The Sponsor agrees and covenants
for the benefit of each Residual Certificateholder, each Holder of a Class A-1
Certificate, the Insurer, Freddie Mac and the Owner Trustee, during the term of
this Agreement, and to the fullest extent permitted by applicable law, that:

     (a) it shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its certificate of
incorporation and the Basic Documents;

     (b) it shall not, for any reason, institute proceedings for the Trust to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Trust, or file a petition seeking or
consenting to reorganization or relief under any applicable federal or state law
relating to the bankruptcy of the Trust, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of the property of the Trust or
cause or permit the Trust to make any assignment for the benefit of creditors,
or admit in writing the inability of the Trust to pay its debts generally as
they become due, or declare or effect a moratorium on the debt of the Trust or
take any action in furtherance of any such action;

     (c) it shall obtain from each counterparty to each Basic Document to which
it or the Trust is a party and each other agreement entered into on or after the
date hereof to which it or the Trust is a party, an agreement by each such
counterparty that prior to the occurrence of the event specified in Section
10.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States; and

     (d) it shall not, for any reason, withdraw or attempt to withdraw from this
Agreement, dissolve, institute proceedings for it to be adjudicated a bankrupt
or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.

     SECTION 2.13. Covenants of the Residual Certificateholders. Each Residual
Certificateholder agrees:

     (a) to be bound by the terms and conditions of the Residual Certificates
and of this Agreement, including any supplements or amendments hereto and to
perform the obligations of a Residual Certificateholder as set forth therein or
herein, in all respects as if it were a signatory hereto. This undertaking is
made for the benefit of the Trust, the Owner Trustee, the Insurer, Freddie Mac
and all other Residual Certificateholders present and future;

                                       8
<PAGE>

     (b) to hereby appoint the Sponsor as such Residual Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust, if any, and agree that, if requested by the Trust,
it will sign such federal income tax information return in its capacity as
holder of an interest in the Trust. Each Residual Certificateholder also hereby
agrees that in its tax returns it will not take any position inconsistent with
those taken in any tax returns that may be filed by the Trust;

     (c) if such Residual Certificateholder is other than an individual or other
entity holding its Residual Certificate through a broker who reports securities
sales on Form 1099-B, to notify the Owner Trustee of any transfer by it of a
Residual Certificate in a taxable sale or exchange, within 30 days of the date
of the transfer; and

     (d) until the completion of the events specified in Section 10.1(e), not
to, for any reason, institute proceedings for the Trust or the Sponsor to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Trust, or file a petition seeking or
consenting to reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Sponsor or
the Trust or a substantial part of its property, or cause or permit the Sponsor
or the Trust to make any assignment for the benefit of its creditors, or admit
in writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any action in furtherance of
any such action.

     Except as provided in Section 2.13, and notwithstanding any other provision
to the contrary in this Agreement, no Residual Certificateholder other than the
Sponsor in its capacity as the "Sponsor" shall be deemed to have adopted, be
bound by, or succeed in any way to any representation by, or duty of
indemnification by or any other duty of, the Sponsor, including those contained
in Sections 2.10, 2.12, 3.5, 4.6, 9.2 or elsewhere herein.

                                  ARTICLE III

                     CERTIFICATES AND TRANSFER OF INTERESTS

     SECTION 3.1. Form. The Class A-1 Certificates, together with the Owner
Trustee's certificate of authentication, shall be in substantially the form set
forth in Exhibit A, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Trust Agreement and
may have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Class A-1 Certificates, as evidenced by their
execution of the Class A-1 Certificates. Any portion of the text of any Class
A-1 Certificate may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Certificate.

     Each Class A-1 Certificate shall be dated the date of its authentication.
The terms of the Class A-1 Certificates set forth in Exhibit A are part of the
terms of this Trust Agreement.

     SECTION 3.2. Execution, Authentication and Delivery, Security Interest.
The Class A-1 Certificates shall be executed on behalf of the Issuer by any of
its Authorized

                                       9
<PAGE>

Officers. The signature of any such Authorized Officer on the Certificates may
be original or facsimile.

     Class A-1 Certificates bearing the original or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Class A-1
Certificates or did not hold such offices at the date of such Class A-1
Certificates.

     The Trustee shall authenticate and shall deliver Class A-1 Certificates for
original issue in an aggregate principal amount of $275,831,000.

     Each Class A-1 Certificate shall be dated the date of its authentication.
The Class A-1 Certificates shall be issuable as registered Class A-1
Certificates in the minimum denomination of $1,000 and in integral multiples of
$1,000 in excess thereof.

     No Class A-1 Certificate shall be entitled to any benefit under this Trust
Agreement or under the Pooling Agreement or be valid or obligatory for any
purpose, unless there appears attached to such Class A-1 Certificate a
certificate of authentication substantially in the form provided for herein
executed by the Owner Trustee by the manual signature of one of its authorized
signatories, and such certificate attached to any Class A-1 Certificate shall be
conclusive evidence, and the only evidence, that such Class A-1 Certificate has
been duly authenticated and delivered hereunder. The Class A-1 Certificates
shall initially be delivered as Definitive Securities.

     The issuance of the Class A-1 Certificates is intended to convey the
beneficial property ownership rights set forth in Section 4.1 hereof. In the
event, for any reason, and solely in such event, any transaction hereunder is
construed by any court or regulatory authority as a loan or other purchase and
sale of the related Trust Property, the Trust shall be deemed to have hereby
pledged to the Certificateholders as security for the performance by the Trust
of all of its obligations from time to time arising hereunder and under any and
all purchases effected pursuant thereto, and shall be deemed to have granted to
the Certificateholders a security interest in, the related Trust Property and
all distributions in respect thereof, and the proceeds of any and all of the
foregoing (collectively, the "Collateral"). In furtherance of the foregoing, (i)
this Agreement shall constitute a security agreement, (ii) the
Certificateholders shall have all of the rights of a secured party with respect
to the Collateral pursuant to applicable law and (iii) the Owner Trustee shall
execute all documents, including, but not limited to, financing statements under
the Uniform Commercial Code as in effect in any applicable jurisdictions, as may
be reasonably required to effectively perfect and evidence a first priority
security interest in the Collateral. Owner Trustee covenants not to pledge,
assign or grant any security interest to any other party in any Trust Property.

     SECTION 3.3. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Securities and the registration of transfers of
Securities. The Trustee shall be "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.

                                       10
<PAGE>

Upon any resignation of any Security Registrar, the Issuer shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Security Registrar.

     If a Person other than the Trustee is appointed by the Issuer as Security
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Security Registrar and of the location, and any change in
the location, of the Security Register, and the Trustee shall have the right to
inspect the Security Register at all reasonable times and to obtain copies
thereof. The Trustee shall have the right to rely upon a certificate executed on
behalf of the Security Registrar by an Authorized Officer thereof as to the
names and addresses of the Holders of the Securities and the principal amounts
and number of such Securities.

     Upon surrender for registration or transfer of any Securities at the office
of the Security Registrar designated for such purpose, and if the requirements
of Section 8-401(1) of the UCC are met, the Issuer shall execute or cause the
Trustee to authenticate one or more new Securities, in any authorized
denominations, of the same class and a like aggregate principal amount. As of
the Closing Date, the Security Registrar has designated its offices located at
123 Washington Street, New York, New York 10006 for purposes of such
registration of transfer. A Securityholder may also obtain from the Trustee, in
the name of the designated transferee or transferees one or more new Securities,
in any authorized denominations, of the same class and a like aggregate
principal amount. Such requirements shall not be deemed to create a duty in the
Trustee to monitor the compliance by the Issuer with Section 8-401 of the UCC.

     At the option of the Holder, Securities may be exchanged for other
Securities in any authorized denominations, of the same class and a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
and if the requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute and upon its request the Trustee shall authenticate the Securities which
the Securityholder making the exchange is entitled to receive. Such requirements
shall not be deemed to create a duty in the Trustee to monitor the compliance by
the Issuer with Section 8-401 of the UCC.

     All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Issuer, evidencing the same
beneficial ownership interest or debt, as appropriate, and entitled to the same
benefits under this Trust Agreement and under the Pooling Agreement, as the
Securities surrendered upon such registration of transfer or exchange.

     Every Security presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in the form attached to Exhibit A, in the case of the
Class A-1 Certificates, or Exhibit A to the Pooling Agreement, in the case of
the Class A-2 Notes, duly executed by the Holder thereof or such Holder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Security
Registrar all in accordance with the Exchange Act, and (ii) accompanied by such
other documents as the Security Registrar may require.

     No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Security Registrar may require
payment of a sum sufficient to

                                       11
<PAGE>

cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.3 or 4.4 hereof or 9.6 of the Pooling Agreement
not involving any transfer.

     The Security Registrar shall not register the transfer of a Definitive
Security unless the Trustee has received a representation letter (in form and
substance satisfactory to the Trustee) from the prospective transferee to the
effect that either (a) such transferee is not an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA or a plan (as defined in Section 4975(e)(1) of the Code) that is
subject to Section 4975 of the Code (each, a "Benefit Plan") and is not acting
on behalf of or investing the assets of a Benefit Plan or (b) the acquisition
and continued holding of such Security by the transferee will be covered by a
U.S. Department of Labor prohibited transaction class exemption. Each Security
Owner, by acceptance of a beneficial interest in a Book-Entry Security, will be
deemed to make one of the foregoing representations.

     SECTION 3.4. Mutilated, Destroyed, Lost or Stolen Securities. If (i) any
mutilated Security is surrendered to the Security Registrar, or the Security
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Security, and (ii) there is delivered to the Trustee, the Insurer
and Freddie Mac such security or indemnity as may be required by it to hold the
Issuer, the Trustee, the Insurer and Freddie Mac harmless, then, in the absence
of notice to the Issuer, the Security Registrar or the Trustee that such Note
has been acquired by a bona fide purchaser, and provided that the requirements
of Section 8-405 of the UCC are met, the Issuer shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Security, a replacement
Security (such requirement shall not be deemed to create a duty in the Owner
Trustee to monitor the compliance by the Issuer with Section 8-405); provided,
however, that if any such destroyed, lost or stolen Security, but not a
mutilated Security, shall have become or within seven days shall be due and
payable, or shall have been called for redemption, the Issuer may, instead of
issuing a replacement Security, direct the Trustee, in writing, to pay such
destroyed, lost or stolen Security when so due or payable or upon the Redemption
Date without surrender thereof. If, after the delivery of such replacement
Security or payment of a destroyed, lost or stolen Security pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original
Security in lieu of which such replacement Security was issued presents for
payment such original Security, the Issuer, the Trustee, the Insurer and Freddie
Mac shall be entitled to recover such replacement Security (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Security from such Person to whom such replacement Security was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer, the Owner Trustee or the
Trustee in connection therewith.

     Upon the issuance of any replacement Security under this Section, the
Issuer may require the payment by the Holder of such Security of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee or the Owner Trustee) connected therewith.

                                       12
<PAGE>

     Every replacement Security issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Trust Agreement and
of the Pooling Agreement equally and proportionately with any and all other
Securities duly issued hereunder.

     The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

     SECTION 3.5. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Security, the Issuer, the Trustee, the Insurer
and Freddie Mac and any agent of the Issuer, the Trustee, the Insurer and
Freddie Mac may treat the Person in whose name any Security is registered (as of
the Record Date) as the owner (the "Owner") of such Security for the purpose of
receiving payments of principal of and interest, if any on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and none
of the Issuer, the Insurer, Freddie Mac, the Trustee nor any agent of the
Issuer, the Insurer, Freddie Mac or the Trustee shall be affected by notice to
the contrary.

     SECTION 3.6. Payment of Principal and Interest. All terms concerning the
accrual of interest on the Securities and payment of any amounts on the
Securities are contained in the Pooling Agreement.

     SECTION 3.7. Cancellation. Subject to Section 2.6(d) of the Pooling
Agreement, all Securities surrendered for payment, registration of transfer,
exchange or redemption shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by the
Trustee. Subject to Section 2.6(d) of the Pooling Agreement, the Issuer may at
any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by the Pooling Agreement or this Trust Agreement. Subject to Section
2.6(d) of the Pooling Agreement, all canceled Securities may be held or disposed
of by the Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Securities have not been previously disposed of by the Trustee.

     SECTION 3.8. Book-Entry Securities. The Class A-2 Notes, upon original
issuance, will be issued in the form of typewritten Notes representing the
Book-Entry Securities, to be delivered to The Depository Trust Company or its
custodian, the initial Clearing Agency, by, or on behalf of, the Issuer. Such
Class A-2 Notes shall initially be registered on the Security Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no Security
Owner will receive a Definitive Security representing such Security Owner's
interest in such Security, except as provided in Section 3.10. Unless and until
definitive, fully registered

                                       13
<PAGE>

Securities (the "Definitive Securities") have been issued to Security Owners
pursuant to Section 3.10:

       (i) the provisions of this Section shall be in full force and effect;

       (ii) the Security Registrar and the Trustee shall be entitled to deal
     with the Clearing Agency for all purposes of this Agreement or the Pooling
     Agreement (including the payment of principal of and interest on the Class
     A-2 Notes and the giving of instructions or directions hereunder) as the
     sole Holder of the Class A-2 Notes, and shall have no obligation to the
     Owners of the Class A-2 Notes;

       (iii) to the extent that the provisions of this Section conflict with any
     other provisions of this Agreement or with provisions of the Pooling
     Agreement, the provisions of this Section shall control;

       (iv) the rights of Class A-2 Note Owners shall be exercised only through
     the Clearing Agency and shall be limited to those established by law and
     agreements between such Class A-2 Note Owners and the Clearing Agency
     and/or the Clearing Agency Participants. Unless and until Definitive
     Securities are issued pursuant to Section 3.10, the initial Clearing Agency
     will make book-entry transfers among the Clearing Agency Participants and
     receive and transmit payments of principal of and interest on the Class A-2
     Notes to such Clearing Agency Participants;

       (v) whenever this Agreement or the Pooling Agreement requires or permits
     actions to be taken based upon instructions or directions of Holders of
     Securities evidencing a specified percentage of the Outstanding Amount of
     the Securities, the Clearing Agency shall be deemed to represent such
     percentage only to the extent that it has received instructions to such
     effect from Class A-2 Note Owners and/or Clearing Agency Participants
     owning or representing, respectively, such required percentage of the
     beneficial interest in the Class A-2 Notes and has delivered such
     instructions to the Trustee; and

       (vi) Class A-2 Note Owners may receive copies of any reports sent to
     Securityholder pursuant to this Agreement or the Pooling Agreement, upon
     written request, together with a certification that they are Security
     Owners and payment of reproduction and postage expenses associated with the
     distribution of such reports, from the Trustee at the Corporate Trust
     Office.

     SECTION 3.9. Notices to Clearing Agency. Whenever a notice or other
communication to the Securityholder is required under this Agreement or the
Pooling Agreement, unless and until Definitive Securities shall have been issued
to Security Owners pursuant to Section 3.10, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Securities to the Clearing Agency, and shall have no obligation to the Security
Owners.

     SECTION 3.10. Definitive Securities. If (i) the Servicer advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Class A-2 Notes, and
the Servicer is unable to locate a

                                       14
<PAGE>

qualified successor, (ii) the Servicer at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or (iii) after the occurrence of a Rapid Amortization Event, Class A-2
Securityholders representing beneficial interests aggregating at least a
majority of the Outstanding Amount of the Class A-2 Notes advise the Trustee
through the Clearing Agency in writing that the continuation of a book entry
system through the Clearing Agency is no longer in the best interests of the
Class A-2 Securityholders, then the Clearing Agency shall notify all Class A-2
Securityholders and the Trustee of the occurrence of any such event and of the
availability of Definitive Securities to Class A-2 Securityholders requesting
the same. Upon surrender to the Trustee of the typewritten Class A-2 Note or
Class A-2 Notes representing the Book-Entry Securities by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Trustee shall authenticate the Definitive Securities in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Security Registrar
or the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Securities, the Trustee shall
recognize the Holders of the Definitive Securities as Securityholders.

                                   ARTICLE IV

  OWNERSHIP OF TRUST PROPERTY; RESIDUAL CERTIFICATES AND TRANSFER OF INTERESTS

     SECTION 4.1. Trust Property Ownership. (a) Upon the formation of the Trust
by the contribution by the Sponsor pursuant to Section 2.5, the Owner Trustee,
contemporaneously therewith, having full power, authority, and authorization to
do so, has executed, authenticated, dated, issued, and delivered, in the name
and on behalf of the Trust, to the Sponsor, one (1) or more Residual
Certificates representing in the aggregate and together with the Class A-1
Certificates a 100% interest in the Trust, and has registered such Residual
Certificate(s) on the Residual Certificate Register in the name of the Sponsor.
Such Residual Certificate(s) are duly authorized, validly issued, and entitled
to the benefits of this Agreement. The Sponsor shall at all times keep and own a
Residual Certificate or Residual Certificates representing no less than 1%
interest, and at no time will the Sponsor sell or alienate its interest
represented by Residual Certificate(s) in such a way as to reduce its aggregate
beneficial ownership in the Residual Certificates to less than 1%.

     (b) Upon the transfer and assignment to the Trust of the Mortgage Loans
pursuant to Section 2.01 of the Sale and Servicing Agreement, the beneficial
ownership of the Trust's property shall be evidenced as follows:

        Class                                Property Owned
        -----                                --------------
Class A-1 Certificates     o  An undivided beneficial interest in the
                              Mortgage Loans included in Pool I to the extent of
                              or as defined by the right of such Class A-1
                              Certificates to receive payments of principal and
                              interest pursuant to the Pooling Agreement.

Residual Certificates      o  Subject to the rights of the Class A-1

                                       15
<PAGE>

                              Certificates, the Class A-2 Notes, the Insurer and
                              Freddie Mac, any and all other property of the
                              Trust from time to time.

     SECTION 4.2. The Residual Certificates. Except for Residual Certificates
issued to the Sponsor, the Residual Certificates shall be issued in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. The
Residual Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee. Residual
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Residual Certificates or did not hold such offices at the date of authentication
and delivery of such Residual Certificates. A transferee of a Residual
Certificate shall become a Residual Certificateholder, and shall be entitled to
the rights and subject to the obligations of a Residual Certificateholder
hereunder, upon due registration of such Residual Certificate in such
transferee's name pursuant to Section 4.4.

     SECTION 4.3. Authentication of Residual Certificates. Concurrently with the
initial sale of the Mortgage Loans to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Residual Certificates to
be executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Sponsor, signed by its chairman of the board, its president
or any vice president, its treasurer or any assistant treasurer without further
corporate action by the Sponsor, in authorized denominations. No Residual
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Residual
Certificate a certificate of authentication substantially in the form set forth
in Exhibit B, executed by the Owner Trustee, by manual signature; such
authentication shall constitute conclusive evidence that such Residual
Certificate shall have been duly authenticated and delivered hereunder. All
Residual Certificates shall be dated the date of their authentication.

     SECTION 4.4. Registration of Transfer and Exchange of Residual
Certificates. The Residual Certificate Registrar shall keep or cause to be kept,
at the office or agency maintained pursuant to Section 4.8, a Residual
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Owner Trustee shall provide for the registration of Residual
Certificates and of transfers and exchanges of Residual Certificates as herein
provided. The Owner Trustee shall be the initial Residual Certificate Registrar.

     In furtherance of and not in limitation of the foregoing, each Residual
Certificateholder, by acceptance of its Residual Certificate, specifically
acknowledges that it has no right to or interest in any monies at any time held
in the Reserve Fund prior to the release of such monies pursuant to Section
8.7(d)(xiv) of the Pooling Agreement, such monies being held in trust for the
benefit of the Securityholders and the Controlling Party. Notwithstanding the
foregoing, in the event that it is ever determined that the monies held in the
Reserve Fund constitute a pledge of collateral, then the provisions of the Sale
and Servicing Agreement shall be considered to constitute a security agreement
and the Sponsor and the Residual

                                       16
<PAGE>

Certificateholders hereby grant to the Trustee and the Controlling Party a first
priority perfected security interest in such amounts. In addition, each Residual
Certificateholder, by acceptance of its Residual Certificate, hereby appoints
the Sponsor as its agent to pledge a first priority perfected security interest
in the Reserve Fund, and any amounts held therein from time to time to the
Trustee and the Controlling Party and agrees to execute and deliver such
instruments of conveyance, assignment, grant, confirmation, etc., as well as any
financing statements, in each case as the Controlling Party shall consider
reasonably necessary in order to perfect the Trustee's security interest in the
Mortgage Loans.

     SECTION 4.5. Mutilated, Destroyed, Lost or Stolen Residual Certificates. If
(a) any mutilated Residual Certificate shall be surrendered to the Residual
Certificate Registrar, or if the Residual Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Residual
Certificate and (b) there shall be delivered to the Residual Certificate
Registrar, the Owner Trustee, the Insurer and Freddie Mac such security or
indemnity as may be required by them to save each of them harmless, then in the
absence of notice that such Residual Certificate shall have been acquired by a
bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute and
the Owner Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Residual Certificate, a new
Residual Certificate of like class, tenor and denomination. In connection with
the issuance of any new Residual Certificate under this Section, the Owner
Trustee or the Residual Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Residual Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Residual Certificate shall be found at any time.

     SECTION 4.6. Persons Deemed Residual Certificateholders. Every Person by
virtue of becoming a Residual Certificateholder in accordance with this
Agreement and the rules and regulations of the Residual Certificate Registrar
shall be deemed to be bound by the terms of this Agreement. Prior to due
presentation of a Residual Certificate for registration of transfer, the Owner
Trustee, the Residual Certificate Registrar, the Insurer and Freddie Mac and any
agent of the Owner Trustee, the Residual Certificate Registrar, the Insurer and
Freddie Mac, may treat the Person in whose name any Residual Certificate shall
be registered in the Residual Certificate Register as the owner of such Residual
Certificate for the purpose of receiving distributions pursuant to the Sale and
Servicing Agreement and the Pooling Agreement and for all other purposes
whatsoever, and none of the Owner Trustee, the Residual Certificate Registrar,
the Insurer or Freddie Mac nor any agent of the Owner Trustee, the Residual
Certificate Registrar, the Insurer or Freddie Mac shall be bound by any notice
to the contrary.

     SECTION 4.7. Access to List of Residual Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Sponsor, the Insurer or Freddie Mac, within 15 days after receipt
by the Owner Trustee of a request therefor from such Person in writing, a list,
of the names and addresses of the Residual Certificateholders as of the most
recent Record Date. If three or more Holders of Residual Certificates or one or
more Holders of Residual Certificates evidencing not less than 25% by Percentage
Interest apply in writing to the Owner Trustee, and such application states that
the applicants desire to communicate with other Residual Certificateholders with
respect to their

                                       17
<PAGE>

rights under this Agreement or under the Residual Certificates and such
application is accompanied by a copy of the communication that such applicants
propose to transmit, then the Owner Trustee shall, within five Business Days
after the receipt of such application, afford such applicants access during
normal business hours to the current list of Residual Certificateholders. Each
Holder, by receiving and holding a Residual Certificate, shall be deemed to have
agreed not to hold any of the Sponsor, the Servicer, the Owner Trustee, the
Insurer or Freddie Mac or any agent thereof accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.

     SECTION 4.8. Maintenance of Office or Agency. The Owner Trustee shall
maintain in Wilmington, Delaware an office or offices or agency or agencies
where Residual Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Residual Certificates and the Basic Documents may be served. The Owner
Trustee initially designates its Corporate Trust Office for such purposes. The
Owner Trustee shall give prompt written notice to the Sponsor, the Residual
Certificateholders, the Insurer and Freddie Mac of any change in the location of
the Residual Certificate Register or any such office or agency.

     SECTION 4.9. ERISA Restrictions. The Residual Certificates may not be
acquired by or for the account of (i) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a plan described in Section 4975(e)(1) of the Code, or (iii) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan"). By accepting and holding its beneficial
ownership interest in its Residual Certificate, the Holder thereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.

     SECTION 4.10. Restrictions on Transfer of Residual Certificates.

     (a) The Residual Certificates shall be assigned, transferred, exchanged,
pledged, financed, hypothecated or otherwise conveyed (collectively, for
purposes of this Section 4.10 and any other Section referring to the Residual
Certificates, "transferred" or a "transfer") only in accordance with this
Section 4.10.

     (b) No transfer of a Residual Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. Except for the initial issuance of the
Residual Certificate to the Sponsor, the Trustee shall require (i) the
transferee to execute an investment letter acceptable to and in form and
substance satisfactory to the Trustee and the Controlling Party certifying to
the Trustee and the Controlling Party the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee or the Controlling
Party or (ii) if the investment letter is not delivered, a written Opinion of
Counsel acceptable to and in form and substance satisfactory to the Trustee, the
Controlling Party and the Sponsor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor from said
Act or is being made pursuant to said Act, which Opinion of Counsel shall not be
an expense of the Trustee, the Controlling Party or the Sponsor. The Holder of a
Residual Certificate desiring to effect such transfer shall, and does hereby
agree

                                       18
<PAGE>

to, indemnify the Sponsor, the Insurer and Freddie Mac 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) The Residual Certificate and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent: (i)
the Person that acquires a Residual Certificate shall (A) be organized and
existing under the laws of the United States of America or any state thereof or
the District of Columbia; (B) expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, the Insurer and Freddie Mac, the
performance of every covenant and obligation of the Sponsor hereunder and (C) as
part of its acquisition of a Residual Certificate, acquire all rights of the
Sponsor or any transferee under this Section 4.10(c) to amounts payable to such
Sponsor or such transferee under Section 8.7(d)(xiv) of the Pooling Agreement;
(ii) the Holder of the Residual Certificates shall deliver to the Trustee, the
Insurer and Freddie Mac an Officer's Certificate stating that such transfer and
such supplemental agreement comply with this Section 4.10(c) and that all
conditions precedent provided by this Section 4.10(c) have been complied with
and an Opinion of Counsel stating that all conditions precedent provided by this
Section 4.10(c) have been complied with, and the Trustee may conclusively rely
on such Officer's Certificate, shall have no duty to make inquiries with regard
to the matters set forth therein and shall incur no liability in so relying;
(iii) the Holder of the Residual Certificates shall deliver to the Trustee, the
Insurer and Freddie Mac a letter from each Rating Agency confirming that its
rating of the Securities, after giving effect to such transfer, will not be
reduced or withdrawn without regard to the Policy or the Guarantee; (iv) the
transferee of the Residual Certificates shall deliver to the Trustee, the
Insurer and Freddie Mac an Opinion of Counsel to the effect that (a) such
transfer will not adversely affect the treatment of the Securities after such
transfer as debt for federal and applicable state income tax purposes, (b) such
transfer will not result in the Trust being subject to tax at the entity level
for federal or applicable state tax purposes, (c) such transfer will not have
any material adverse impact on the federal or applicable state income taxation
of a Securityholder or any Residual Certificateholder and (d) such transfer will
not result in the arrangement created by this Agreement or any "portion" of the
Trust, being treated as a taxable mortgage pool as defined in Section 7701(i) of
the Code; (v) all filings and other actions necessary to continue the perfection
of the interest of the Trust in the Mortgage Loans and the other property
conveyed hereunder shall have been taken or made and (vi) the Controlling Party
shall have consented to such transfer. Notwithstanding the foregoing, the
requirement set forth in subclause (i)(A) of this Section 4.10(c) shall not
apply in the event the Trustee shall have received a letter from each Rating
Agency confirming that its rating of the Securities, after giving effect to a
proposed transfer to a Person that does not meet the requirement set forth in
subclause (i)(A), shall not be reduced or withdrawn without regard to the Policy
or the Guarantee. Notwithstanding the foregoing, the requirements set forth in
this paragraph (c) shall not apply to the initial issuance of the Residual
Certificates to the Sponsor.

     Except for the initial issuance of the Residual Certificate to the Sponsor,
no transfer of a Residual Certificate shall be made unless the Trustee and the
Controlling Party shall have received a representation letter from the
transferee of such Residual Certificate, acceptable to and in form and substance
satisfactory to the Trustee and the Controlling Party to the effect that such
transferee is not a Benefit Plan, nor a Person acting on behalf of or using the
assets of a Benefit Plan, which representation letter shall not be an expense of
the Trustee, or the Controlling Party.

                                       19
<PAGE>

     (d) No transfer or pledge of the Residual Certificates shall result in more
than 98 other holders of Residual Certificates.

     SECTION 4.11. Acceptance of Obligations. The Sponsor, by its acceptance of
the Residual Certificates, agrees to be bound by and to perform all the duties
of the Sponsor set forth in this Agreement.

     SECTION 4.12. Distributions on Residual Certificates. The Holders of the
Residual Certificates will be entitled to distributions on each Payment Date, as
provided in the Sale and Servicing Agreement and the Pooling Agreement.

                                   ARTICLE V

                         VOTING RIGHTS AND OTHER ACTIONS

     SECTION 5.1. Prior Notice to Holders with Respect to Certain Matters. With
respect to the following matters, the Owner Trustee shall not take action unless
at least 30 days before the taking of such action, the Owner Trustee shall have
notified the Residual Certificateholders, the Controlling Party and Freddie Mac
in writing of the proposed action and the Residual Certificateholders and the
Controlling Party shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Residual Certificateholders or
the Controlling Party have withheld consent or provided alternative direction:

     (a) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute or unless such amendment would not materially and adversely affect the
interests of the Holders);

     (b) the amendment of the Pooling Agreement by a supplemental Pooling
Agreement in circumstances where the consent of any Securityholder is required;

     (c) the amendment of the Pooling Agreement by a supplemental Pooling
Agreement in circumstances where the consent of any Securityholder is not
required and such amendment materially adversely affects the interest of the
Residual Certificateholders; or

     (d) except pursuant to Section 9.01 of the Sale and Servicing Agreement,
the amendment, change or modification of the Sale and Servicing Agreement,
except to cure any ambiguity or defect or to amend or supplement any provision
in a manner that would not materially adversely affect the interests of the
Residual Certificateholders.

The Owner Trustee shall notify the Residual Certificateholders in writing of any
appointment of a successor Security Registrar, or Residual Certificate Registrar
within five Business Days thereof.

     SECTION 5.2. Action by Residual Certificateholders with Respect to Certain
Matters.

                                       20
<PAGE>

     (a) Upon the written request from time to time of Residual
Certificateholder(s) evidencing not less than 51% by Percentage Interest and
subject to the prior review by the Controlling Party, the Owner Trustee shall
take appropriate actions to remove Mortgage Loans from Pool I and/or Pool II
pursuant to Section 2.07 of the Sale and Servicing Agreement. The Owner Trustee
shall notify the Insurer and Freddie Mac of any such proposed removal. The Owner
Trustee will take such actions with respect to removal of Mortgage Loans as may
from time to time be proposed by the Residual Certificateholders pursuant to
Sections 5.2(b) and 5.5.

     (b) Upon the written request of any Residual Certificateholder or Class A-1
Securityholder (a "Proposer"), the Owner Trustee shall distribute promptly to
all Residual Certificateholders or Class A-1 Securityholders, as appropriate any
request for action or consent of Residual Certificateholders submitted by such
Proposer, with a copy to the Manager. The Owner Trustee shall provide a
reasonable method for collecting responses to such request and shall tabulate
and report the results thereof to the Residual Certificateholders or Class A-1
Securityholders, as appropriate, and the Manager. The Owner Trustee shall have
no responsibility or duty to determine if any such proposed action or consent is
permitted under the terms of this Agreement or applicable law.

     SECTION 5.3. Action with Respect to Bankruptcy. Until one year and one day
following the day on which the Securities have been paid in full, the Owner
Trustee shall not have the power to, and shall not, commence any proceeding or
other actions contemplated by Section 2.12(b) relating to the Trust without the
prior written consent of the Controlling Party. Until one year and one day
following the day on which the Securities have been paid in full, all amounts
due to the Insurer under the Insurance Agreement and to Freddie Mac under the
Pooling Agreement have been paid in full, the Policy has terminated and the
Trustee has surrendered the Policy to the Insurer, the Owner Trustee shall not
have the power to, and shall not, commence any proceeding or other actions
contemplated by Section 2.12(b) relating to the Trust without the prior written
consent of all of the Residual Certificateholders and the Controlling Party, and
the delivery to the Owner Trustee by each such Residual Certificateholder and
the Controlling Party, of a certificate certifying that such Residual
Certificateholder or Class A-1 Securityholders, as appropriate, reasonably
believes that the Trust is insolvent.

     SECTION 5.4. Restrictions on Residual Certificateholders' Power.

     (a) Neither the Residual Certificateholders nor the Controlling Party shall
direct the Owner Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or any of the Basic Documents or would be contrary
to Section 2.3 or otherwise contrary to law nor shall the Owner Trustee be
obligated to follow any such direction, if given.

     (b) Neither the Controlling Party nor any Residual Certificateholder (other
than the Sponsor as sole Residual Certificateholder) shall have any right by
virtue or by availing itself of any provisions of this Agreement to institute
any suit, action, or proceeding in equity or at law upon or under or with
respect to this Agreement or any Basic Document, unless such party is the
Instructing Party pursuant to Section 7.3 and unless such party previously shall
have given to the Owner Trustee a written notice of default and of the
continuance thereof, as provided in

                                       21
<PAGE>

this Agreement, and also unless Residual Certificateholders evidencing not less
than 25% by Percentage Interest or the Controlling Party shall have made written
request upon the Owner Trustee to institute such action, suit or proceeding in
its own name as Owner Trustee under this Agreement and shall have offered to the
Owner Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Owner
Trustee, for 30 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, and during such 30-day period no request or waiver inconsistent
with such written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 7.3; it being understood and intended,
and being expressly covenanted by each Residual Certificateholder with every
other Residual Certificateholder, the Owner Trustee or the Controlling Party,
that no Controlling Party or one or more Holders of Residual Certificates shall
have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb, or prejudice
the rights of the Holders of any other of the Residual 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 provided in
this Agreement and for the equal, ratable, and common benefit of all Residual
Certificateholders and the Controlling Party. For the protection and enforcement
of the provisions of this Section 5.4, each and every Residual
Certificateholder, the Owner Trustee and the Controlling Party shall be entitled
to such relief as can be given either at law or in equity.

     SECTION 5.5. Majority Control. No Residual Certificateholder or Class A-1
Securityholder shall have any right to vote or in any manner otherwise control
the operation and management of the Trust except as expressly provided in this
Agreement. Except as expressly provided herein, any action that may be taken by
the Residual Certificateholders or Class A-1 Securityholder under this Agreement
may be taken by the Holders of Residual Certificates or Class A-1 Certificates
evidencing not less than a 51% by Percentage Interest of such class. Except as
expressly provided herein, any written notice of the Residual
Certificateholders, or Class A-1 Securityholders delivered pursuant to this
Agreement shall be effective if signed by Residual Certificateholders or Class
A-1 Securityholders, as appropriate, evidencing not less than a 51% Percentage
Interest in such Class at the time of the delivery of such notice.

     SECTION 5.6. Rights of the Controlling Party. Notwithstanding anything to
the contrary in the Basic Documents, without the prior written consent of the
Controlling Party, the Owner Trustee shall not (i) remove the Servicer, (ii)
initiate any claim, suit or proceeding by the Trust or compromise any claim,
suit or proceeding brought by or against the Trust, other than with respect to
the enforcement of any Mortgage Loan or any rights of the Trust thereunder,
(iii) authorize the merger or consolidation of the Trust with or into any other
business trust or other entity, (iv) amend the Certificate of Trust or (v) amend
this Agreement in accordance with Section 12.1 of this Agreement.

                                   ARTICLE VI

                                 CERTAIN DUTIES

     SECTION 6.1. Accounting and Records to the Class A-1 Securityholders,
Residual Certificateholders, the Internal Revenue Service and Others. Subject to
Sections

                                       22
<PAGE>

8.01(b)(iii) and 8.01(c) of the Sale and Servicing Agreement, the Sponsor shall
(a) maintain (or cause to be maintained) the books of the Trust on a calendar
year basis on the accrual method of accounting, including, without limitation,
the allocations of net income under Section 2.11 hereof, (b) deliver (or cause
to be delivered) to each Residual Certificateholder, as may be required by the
Code and applicable Treasury Regulations, such information as may be required
(including Schedule K-1, if applicable) to enable each Residual
Certificateholder to prepare its Federal and state income tax returns, (c) file
or cause to be filed, if necessary, such tax returns relating to the Trust
(including a partnership information return, Form 1065), and direct the Owner
Trustee or the Servicer, as the case may be, to make such elections as may from
time to time be required or appropriate under any applicable state or Federal
statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a branch, or if applicable, as a partnership, for Federal
income tax purposes and (d) collect or cause to be collected any withholding tax
as described in and in accordance with Section 8.01(b)(ii) of the Sale and
Servicing Agreement with respect to income or distributions to Residual
Certificateholders and the appropriate forms relating thereto. The Owner Trustee
or the Servicer, as the case may be, shall make all elections pursuant to this
Section as directed in writing by the Sponsor. The Owner Trustee shall sign all
tax information returns, if any, filed pursuant to this Section 6.1 and any
other returns as may be required by law, and in doing so shall rely entirely
upon, and shall have no liability for information provided by, or calculations
provided by, the Sponsor or the Servicer. The Sponsor will direct the Owner
Trustee and the Owner Trustee shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect to the
Mortgage Loans. The Sponsor shall not direct the Owner Trustee to make, and the
Owner Trustee shall not make, the election provided under Section 754 of the
Code.

     SECTION 6.2. Signature on Returns; Tax Matters Partner.

     (a) Notwithstanding the provisions of Section 6.1 and in the event that the
Trust is characterized as a partnership, the Owner Trustee shall sign on behalf
of the Trust the tax returns of the Trust, unless applicable law requires a
Residual Certificateholder to sign such documents, in which case such documents
shall be signed by the Sponsor.

     (b) In the event that the Trust is characterized as a partnership, the
Sponsor shall be the "tax matters partner" of the Trust pursuant to the Code.

     SECTION 6.3. Certificate Purchase Agreement and Underwriting Agreement. The
Servicer is hereby authorized to execute and deliver the Certificate Purchase
Agreement in respect to the Class A-1 Certificates and the Underwriting
Agreement with respect to the Class A-2 Notes.

                                  ARTICLE VII

                      AUTHORITY AND DUTIES OF OWNER TRUSTEE

     SECTION 7.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in

                                       23
<PAGE>

such form as the Sponsor shall approve as evidenced conclusively by the Owner
Trustee's execution thereof, and on behalf of the Trust, to direct the Trustee
to authenticate and deliver Class A-1 Certificates in the aggregate principal
amount of $275,831,000 and Class A-2 Notes in the aggregate principal amount of
$77,669,000. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Basic Documents. The Owner Trustee is further authorized from time to time
to take such action as the Instructing Party recommends with respect to the
Basic Documents so long as such activities are consistent with the terms of the
Basic Documents. The Owner Trustee may rely on the Manager to carry out any
action that the Owner Trustee is authorized or directed to perform hereunder, to
the extent permitted by the Management Agreement.

     SECTION 7.2. General Duties. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and to administer the Trust in the interest of the
Holders, subject to the Basic Documents and in accordance with the provisions of
this Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Trust or the Owner
Trustee hereunder or under any Basic Document, and the Owner Trustee shall not
be liable for the default or failure of the Servicer to carry out its
obligations under the Sale and Servicing Agreement or the failure of the Manager
to carry out its obligations under the Management Agreement.

     SECTION 7.3. Action upon Instruction.

     (a) Subject to Article V, the Controlling Party (the "Instructing Party")
shall have the exclusive right to direct the actions of the Owner Trustee in the
management of the Trust, so long as such instructions are not inconsistent with
the express terms set forth herein or in any Basic Document. The Instructing
Party shall not instruct the Owner Trustee in a manner inconsistent with this
Agreement or the Basic Documents. In acting in accordance with the direction of
the Controlling Party pursuant to this Section or pursuant to Article V, the
Owner Trustee shall not be deemed to (i) owe any fiduciary obligation to the
Controlling Party or (ii) have violated any fiduciary responsibility to the
Residual Certificateholders, the Class A-1 Securityholders or Freddie Mac.

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

     (c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any instruction
of the Instructing Party received, the Owner Trustee shall not be liable on
account of

                                       24
<PAGE>

such action to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, notwithstanding
any other provision of this Agreement, take or refrain from taking such action,
not inconsistent with this Agreement or the Basic Documents, as it shall deem to
be in the best interests of the Residual Certificateholders and the Class A-1
Securityholders, and shall have no liability to any Person for such action or
inaction.

     (d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction and, notwithstanding any other provision of this
Agreement, to the extent that the Owner Trustee acts or refrains from acting in
good faith in accordance with any such instruction received, the Owner Trustee
shall not be liable, on account of such action or inaction, to any Person. If
the Owner Trustee shall not have received appropriate instruction within 10 days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to be
in the best interests of the Residual Certificateholders, and shall have no
liability to any Person for such action or inaction.

     SECTION 7.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 7.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.

     SECTION 7.5. No Action Except under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (ii) in accordance with the Basic Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 7.3.

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<PAGE>

     SECTION 7.6. Restrictions. The Owner Trustee shall not take any action (a)
that is inconsistent with the purposes of the Trust set forth in Section 2.3 or
(b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation or a publicly traded partnership for
Federal income tax purposes. The Residual Certificateholders shall not direct
the Owner Trustee to take action that would violate the provisions of this
Section.

                                  ARTICLE VIII

                          CONCERNING THE OWNER TRUSTEE

     SECTION 8.1. Acceptance of Trust and Duties. The Owner Trustee accepts the
trust hereby created and agrees to perform its duties hereunder with respect to
such trust but only upon the terms of this Agreement. The Owner Trustee also
agrees to disburse all monies actually received by it constituting part of the
Owner Trust Estate upon the terms of the Basic Documents and this Agreement. The
Owner Trustee shall not be answerable or accountable hereunder or under any
Basic Document under any circumstances, except (i) for its own willful
misconduct, bad faith or negligence, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 8.3 expressly made by the Owner
Trustee in its individual capacity, (iii) for liabilities arising from the
failure of the Owner Trustee to perform obligations expressly undertaken by it
in the last sentence of Section 7.4 hereof, or (iv) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):

     (a) the Owner Trustee shall not be liable for any error of judgment, not
constituting negligence, made by a Responsible Officer of the Owner Trustee;

     (b) the Owner Trustee shall not be liable with respect to any action taken
or omitted to be taken by it if such action or omission is in accordance with
the instructions of the Instructing Party, the Sponsor, the Servicer or any
Residual Certificateholder pursuant to the terms hereof;

     (c) or risk funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder or under any Basic Document
if the Owner Trustee shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;

     (d) by or arising under any of the Basic Documents, including the principal
of and interest on the Securities;

     (e) the Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Sponsor or for the form, character, genuineness, sufficiency, value or validity
of any of the Owner Trust Estate or for or in respect of the validity or
sufficiency of the Basic Documents, other than the certificates of
authentication on the Securities and the Residual Certificates, and the Owner
Trustee shall in no event assume or incur any liability, duty or obligation to
the Sponsor, the Insurer, Freddie Mac,

                                       26
<PAGE>

Trustee, any Residual Certificateholder, other than as expressly provided for
herein and in the Basic Documents;

     (f) the Owner Trustee shall not be liable for the default or misconduct of
the Sponsor, the Insurer, Freddie Mac, the Trustee, or the Servicer under any of
the Basic Documents or otherwise and the Owner Trustee shall have no obligation
or liability to perform the obligations under this Agreement or the Basic
Documents that are required to be performed by the Sponsor under this Agreement,
by the Trustee under the Pooling Agreement or the Servicer under the Sale and
Servicing Agreement; and

     (g) the Owner Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of the
Instructing Party or any of the Residual Certificateholders, unless such
Instructing Party or Residual Certificateholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its gross negligence, bad
faith or willful misconduct in the performance of any such act.

     SECTION 8.2. Furnishing of Documents. The Owner Trustee shall furnish to
the Residual Certificateholders promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents.

     SECTION 8.3. Representations and Warranties. The Owner Trustee hereby
represents and warrants, in its individual capacity, to the Sponsor and the
Holders that:

     (a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.

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

     (c) Neither the execution nor the delivery by it of this Agreement, nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the terms or provisions hereof will contravene any federal or
Delaware state law, governmental rule or regulation governing the banking or
trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.

     SECTION 8.4. Reliance; Advice of Counsel.

                                       27
<PAGE>

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

     (b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and (ii) may
consult with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
opinion or advice of any such counsel, accountants or other such persons and
according to such opinion not contrary to this Agreement or any Basic Document.

     SECTION 8.5. Not Acting in Individual Capacity. Except as provided in this
Article VII, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.

     SECTION 8.6. Owner Trustee Not Liable for Securities, Residual Certificates
or Mortgage Loans. The recitals contained herein and in the Securities (other
than the signature and countersignature of the Owner Trustee on the
Certificates) and the Residual Certificates (other than the signature and
countersignature of the Owner Trustee on the Residual Certificates), shall be
taken as the statements of the Sponsor and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Basic Document, of the Securities (other than the signature and countersignature
of the Owner Trustee on the Securities) or of the Residual Certificates (other
than the signature and countersignature of the Owner Trustee on the Residual
Certificates), or of any Mortgage Loan or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage Loan, or the perfection
and priority of any security interest created by any Mortgage Loan or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to Residual Certificateholders under this Agreement or the
Securityholders under the Pooling Agreement, including, without limitation: the
existence, condition and ownership of any Mortgage Loan; the existence and
enforceability of any insurance thereon; the existence and contents of any
Mortgage Loan on any computer or other record thereof; the validity of the
assignment of any Mortgage Loan to the Trust or of any intervening assignment;
the completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan; the

                                       28
<PAGE>

compliance by the Sponsor, the Servicer or any other Person with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of the Trustee or
the Servicer or any subservicer taken in the name of the Owner Trustee.

     SECTION 8.7. Owner Trustee May Own Securities and Residual Certificates.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of Securities or Residual Certificates and may deal with the Sponsor,
the Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.

     SECTION 8.8. Payments from Owner Trust Estate. All payments to be made by
the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Wilmington Trust Company, or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.

     SECTION 8.9. Doing Business in Other Jurisdictions. Notwithstanding
anything contained to the contrary, neither Wilmington Trust Company or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 11.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Wilmington Trust Company (or any successor
thereto); or (iii) subject Wilmington Trust Company (or any successor thereto)
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.

                                   ARTICLE IX

                          COMPENSATION OF OWNER TRUSTEE

     SECTION 9.1. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder the Owner Trustee Fees, and
the Owner Trustee shall be entitled to be reimbursed by the Sponsor for its
other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ in connection with the exercise and performance
of its rights and its duties hereunder and under the Basic Documents.

     SECTION 9.2. Indemnification. The Sponsor shall be liable as primary
obligor for, and shall indemnify the Owner Trustee (in its individual and trust
capacities) and its

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<PAGE>

officers, directors, successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may (in its
trust or individual capacities) at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the Sponsor shall not be liable
for or required to indemnify the Owner Trustee from and against Expenses arising
or resulting from any of the matters described in the third sentence of Section
8.1. The indemnities contained in this Section and the rights under Section 9.1
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement. In any event of any claim, action or proceeding
for which indemnity will be sought pursuant to this Section, the Owner Trustee's
choice of legal counsel shall be subject to the approval of the Sponsor which
approval shall not be unreasonably withheld.

     SECTION 9.3. Payments to the Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article IX shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.

     SECTION 9.4. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Residual Certificateholder.

                                   ARTICLE X

                         TERMINATION OF TRUST AGREEMENT

     SECTION 10.1. Termination of Trust Agreement.

     (a) This Agreement and the Trust shall terminate and be of no further force
or effect upon the later of (i) the maturity or other liquidation of the last
Mortgage Loan (including the redemption by the Sponsor at its option of the
Securities as described in Section 7.01(b) of the Sale and Servicing Agreement)
and the subsequent distribution of amounts in respect of such Mortgage Loans as
provided in the Basic Documents or (ii) the payment to Residual
Certificateholders of all amounts required to be paid to them pursuant to this
Agreement and the payment to the Insurer and Freddie Mac of all amounts payable
or reimbursable to them pursuant to the Sale and Servicing Agreement, the
Pooling Agreement and, respectively, the Insurance Agreement and the Guarantee;
provided, however, that the rights to indemnification under Section 9.2 and the
rights under Section 9.1 shall survive the termination of the Trust. The
Servicer shall promptly notify the Owner Trustee, the Insurer and Freddie Mac of
any prospective termination pursuant to this Section 10.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Residual Certificateholder
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Residual Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or

                                       30
<PAGE>

winding up of all or any part of the Trust or Owner Trust Estate nor (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.

     (b) Except as provided in clause (a), neither the Sponsor nor any other
Residual Certificateholder shall be entitled to revoke or terminate the Trust.

     (c) Notice of any termination of the Trust, specifying the Payment Date
upon which the Residual Certificateholders shall surrender their Residual
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to Residual
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 7.01(c) of the Sale and
Servicing Agreement, stating (i) the Payment Date upon or with respect to which
final payment of the Residual Certificates shall be made upon presentation and
surrender of the Residual Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Payment Date is not applicable, payments being
made only upon presentation and surrender of the Residual Certificates at the
office of the Trustee therein specified. The Owner Trustee shall give such
notice to the Residual Certificate Registrar (if other than the Owner Trustee)
and the Trustee at the time such notice is given to Residual Certificateholders.
Upon presentation and surrender of the Residual Certificates, the Trustee shall
cause to be distributed to Residual Certificateholders amounts distributable on
such Payment Date pursuant to Section 8.7(d)(xiv) of the Pooling Agreement.

     In the event that all of the Residual Certificateholders shall not
surrender their Residual Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Owner Trustee
shall give a second written notice to the remaining Residual Certificateholders
to surrender their Residual Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Residual Certificates shall not have been surrendered for cancellation,
the Owner Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Residual Certificateholders
concerning surrender of their Residual Certificates, and the cost thereof shall
be paid out of the funds and other assets that shall remain subject to this
Agreement. Any funds remaining in the Trust after exhaustion of such remedies
shall be distributed, subject to applicable escheat laws, by the Owner Trustee
to the Sponsor and Holders shall look solely to the Sponsor for payment.

     (d) Any funds remaining in the Trust after funds for final distribution
have been distributed or set aside for distribution shall be distributed by the
Owner Trustee to the Sponsor.

     (e) Upon the winding up of the Trust and its termination, the Owner Trustee
shall cause the Certificate of Trust to be canceled by filing a certificate of
cancellation with the Secretary of State in accordance with the provisions of
Section 3810 of the Business Trust Statute.

                                       31
<PAGE>

                                   ARTICLE XI

             SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

     SECTION 11.1. Eligibility Requirements for Owner Trustee. The Owner Trustee
shall at all times be a corporation (i) satisfying the provisions of Section
3807(a) of the Business Trust Statute; (ii) authorized to exercise corporate
trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; (iv) having (or having a parent which has) a rating of at least A3
by Moody's or A-1 by Standard & Poor's; and (v) acceptable to the Insurer and
Freddie Mac. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 11.2.

     SECTION 11.2. Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Sponsor (or in the event that the Sponsor
is not the sole Residual Certificateholder, the Holders of Residual Certificates
evidencing not less than a majority in interest in the Trust), the Insurer,
Freddie Mac and the Servicer. Upon receiving such notice of resignation, the
Sponsor shall promptly appoint a successor Owner Trustee, meeting the
qualifications set forth in Section 11.1 herein, by written instrument, one copy
of which instrument shall be delivered to the resigning Owner Trustee and with
additional copies to the successor Owner Trustee, the Insurer and Freddie Mac
provided that the Sponsor shall have received written confirmation from each of
the Rating Agencies that the proposed appointment will not result in an
increased capital charge to the Insurer by either of the Rating Agencies. If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee or the Controlling Party may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee.

     If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 11.1 and shall fail to resign after written
request therefor by the Sponsor, or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Owner Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Residual Certificateholder with the consent of the Controlling Party may remove
the Owner Trustee. If the Residual Certificateholder shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the Sponsor
shall promptly appoint a successor Owner Trustee, meeting the qualifications set
forth in Section 11.1 herein, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the outgoing Owner Trustee so removed,
one copy to the Insurer, one copy to Freddie Mac and one copy to the successor
Owner Trustee and the Sponsor shall pay all fees owed to the outgoing Owner
Trustee, if not previously paid by the Trust.

                                       32
<PAGE>

     Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 11.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Sponsor shall provide notice of such resignation
or removal of the Owner Trustee to each of the Rating Agencies.

     Notwithstanding any other provision of this Agreement, and in addition to
any other method of removal of the Owner Trustee contained herein, upon a
proposal made pursuant to Section 5.2(b) and the subsequent consent of Residual
Certificateholders and Class A-1 Securityholders representing no less than a
66-2/3% Percentage Interest of each of the Residual Certificateholders and Class
A-1 Securityholders in the Trust, the Owner Trustee may be removed as Owner
Trustee, subject to the consent of the Controlling Party, which consents are not
to be unreasonably withheld. In the event the Owner Trustee is removed pursuant
to this paragraph, the provisions of this Agreement, including Article X herein,
shall apply as if the Owner Trustee had resigned hereunder.

     SECTION 11.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 11.2 shall execute, acknowledge and deliver to the
Sponsor, the Servicer, the Insurer and Freddie Mac and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Sponsor and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.

     No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 11.1.

     Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Residual Certificateholders, the Trustee, the Securityholders and
the Rating Agencies. If the Servicer shall fail to mail such notice within 10
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Servicer.

     SECTION 11.4. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder,

                                       33
<PAGE>

provided such corporation shall be eligible pursuant to Section 11.1, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.

     SECTION 11.5. Appointment of Co-Owner Trustee or Separate Owner Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Mortgaged Property may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Controlling Party to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee subject to the approval
of the Controlling Party (which approval shall not be unreasonably withheld)
shall have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 11.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 11.3.

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

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

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

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

     Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to 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. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its

                                       34
<PAGE>

instrument of appointment, either jointly with the Owner Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Owner Trustee.
Each such instrument shall be filed with the Owner Trustee and a copy thereof
given to the Servicer, the Insurer and Freddie Mac.

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

                                   ARTICLE XII

                                  MISCELLANEOUS

     SECTION 12.1. Supplements and Amendments.

     (a) This Agreement may be amended by the Sponsor and the Owner Trustee,
with the prior written consent of the Controlling Party and with prior written
notice to the Rating Agencies, without the consent of any of the Securityholders
or, in the event that the Sponsor is not the sole Residual Certificateholder,
the Residual Certificateholders, (i) to cure any ambiguity or defect or (ii) to
correct, supplement or modify any provisions in this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel which
may be based upon a certificate of the Servicer, adversely affect in any
material respect the interests of any Securityholder or Residual
Certificateholder.

     (b) This Agreement may also be amended from time to time, with the prior
written consent of the Controlling Party, by the Sponsor and the Owner Trustee,
with prior written notice to the Rating Agencies, and, to the extent such
amendment materially and adversely affects the interests of the Securityholders,
with the consent of the Securityholders evidencing not less than a majority of
the Outstanding Amount of the Securities and, the consent of the Residual
Certificateholders evidencing not less than a majority interest in the Trust
(which consent of any Holder of a Security or Residual Certificate given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holder and on all future Holders of such
Security or Residual Certificate and of any Security or Residual Certificate
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Security or Residual
Certificate) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Securityholders or the Residual Certificateholders;
provided, however, that, subject to the express rights of the Insurer and
Freddie Mac under the Basic Documents, no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Mortgage Loans or distributions that shall be
required to be made for the benefit of the Securityholders or the Residual
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Securities and the Residual Certificate, the Holders of which are

                                       35
<PAGE>

required to consent to any such amendment, without the consent of the Holders of
all the outstanding Securities and Holders of all outstanding Residual
Certificates.

     Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Residual Certificateholder, the Trustee, the Insurer, Freddie
Mac and each of the Rating Agencies.

     It shall not be necessary for the consent of Securityholders, the Residual
Certificateholders or the Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Residual Certificateholders provided
for in this Agreement or in any other Basic Document) and of evidencing the
authorization of the execution thereof by Residual Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of Trust, the
Owner Trustee shall cause the filing of such amendment with the Secretary of
State.

     Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.

     SECTION 12.2. No Legal Title to Owner Trust Estate in Residual
Certificateholders. The Residual Certificateholders shall not have legal title
to any part of the Owner Trust Estate. The Residual Certificateholders shall be
entitled to receive distributions with respect to their undivided ownership
interest therein only in accordance with Article IX. No transfer, by operation
of law or otherwise, of any right, title or interest of the Residual
Certificateholders to and in their ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.

     SECTION 12.3. Limitations on Rights of Others. Except for Section 2.7, the
provisions of this Agreement are solely for the benefit of the Owner Trustee,
the Sponsor, the Residual Certificateholders, the Servicer and, to the extent
expressly provided herein, the Insurer, Freddie Mac, the Trustee and the
Securityholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.

     SECTION 12.4. Notices.

Unless otherwise expressly specified or permitted by the terms hereof, all
notices shall be in writing and shall be deemed given upon receipt personally
delivered, delivered by overnight courier or mailed first class mail or
certified mail, in each case return receipt requested, and shall

                                       36
<PAGE>

be deemed to have been duly given upon receipt, if to the Owner Trustee,
addressed to the Corporate Trust Office; if to the Sponsor, addressed to
GreenPoint Mortgage Securities Inc., 700 Larkspur Landing Circle, Suite 240,
Larkspur, California 94939; if to the Insurer, addressed to Insurer, Financial
Guaranty Insurance Company, 115 Broadway, New York, New York 10006, Attention:
Research and Risk Management GreenPoint Home Equity Loan Trust--2000-2 ,
Telecopy No.: (212) 312-3225; if to Freddie Mac, addressed to Federal Home Loan
Mortgage Corporation, 8200 Jones Branch Drive, McLean, Virginia 22101,
Attention: Vice-President, Mortgage Funding, Telecopy No.: (703) 903-2138; or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party.

     (a) Any notice required or permitted to be given to a Residual
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Residual Certificate Register. Any notice
so mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Residual Certificateholder
receives such notice.

     SECTION 12.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     SECTION 12.6. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

     SECTION 12.7. Assignments; Insurer and Freddie Mac.

     (a) This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. This
Agreement shall also inure to the benefit of the Insurer and Freddie Mac.
Without limiting the generality of the foregoing, all covenants and agreements
in this Agreement which confer rights upon the Insurer and Freddie Mac shall be
for the benefit of and run directly to the Insurer and Freddie Mac,
respectively, and the Insurer and Freddie Mac shall each be entitled to rely on
and enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents. Each of the Insurer and
Freddie Mac may disclaim any of its rights and powers under this Agreement (but
not their duties and obligations under the Policy and the Guarantee,
respectively) upon delivery of a written notice to the Owner Trustee.

     (b) In accepting instructions from the Controlling Party pursuant to
Article V or Section 7.3 of this Agreement, and with respect to any other
obligations of the Owner Trustee to the Insurer and Freddie Mac under this
Agreement, the Owner Trustee undertakes to perform or observe only its express
obligations under this Agreement, and no implied obligations with respect to the
Insurer and Freddie Mac shall be read into this Agreement against the Owner
Trustee. The Owner Trustee shall not be deemed to owe any fiduciary duty to the
Insurer or Freddie Mac and it is expressly understood and agreed by the Insurer
and Freddie Mac that the Owner Trustee shall not be personally liable or
responsible for the payment of any amount owing

                                       37
<PAGE>

on or with respect to the Basic Documents or for the failure of the Trust to
perform its obligations under the Basic Documents or any other agreement with
respect thereto.

     SECTION 12.8. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Residual Certificateholder, by accepting a Residual Certificate, and the Trustee
and each Securityholder by accepting the benefits of this Agreement, hereby
covenants and agrees that they will not at any time institute against the
Sponsor, or join in any institution against the Sponsor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Securities, the Residual
Certificates, this Agreement or any of the Basic Documents.

     SECTION 12.9. No Recourse. Each Residual Certificateholder by accepting a
Residual Certificate acknowledges that such Residual Certificateholder's
Residual Certificates represent beneficial interests in the Trust only and do
not represent interests in or obligations of the Servicer, the Sponsor, the
Owner Trustee, the Trustee, the Insurer, Freddie Mac or any Affiliate thereof
and no recourse may be had against such parties or their assets, except as may
be expressly set forth or contemplated in this Agreement, the Residual
Certificates or the Basic Documents.

     SECTION 12.10. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.

     SECTION 12.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     SECTION 12.12. Servicer. The Servicer is authorized to prepare, or cause to
be prepared, execute and deliver on behalf of the Trust all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Trust or Owner Trustee to prepare, file or deliver pursuant to the Basic
Documents. Upon written request, the Owner Trustee shall execute and deliver to
the Servicer a limited power of attorney appointing the Servicer the Trust's
agent and attorney-in-fact to prepare, or cause to be prepared, execute and
deliver all such documents, reports, filings, instruments, certificates and
opinions.

                                       38
<PAGE>

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

                                    WILMINGTON TRUST COMPANY,
                                      Owner Trustee

                                    By: /s/ Anita Dallago
                                      ---------------------------------
                                      Name: Anita Dallago
                                      Title: Financial Services Officer

                                    GREENPOINT MORTGAGE SECURITIES INC.,
                                      Sponsor

                                    By: /s/ David Molumby
                                      ---------------------------------
                                      Name: David Molumby
                                      Title: Vice President

Acknowledged and Agreed:

GREENPOINT MORTGAGE FUNDING, INC.,
Servicer

By: /s/ Gilbert J. MacQuarrie
    -----------------------------------
    Name: Gilbert J. MacQuarrie
    Title: Executive Vice President/Chief Financial Officer

FINANCIAL GUARANTY INSURANCE COMPANY,
Insurer

By: /s/ Jayce Fox
    -----------------------------------
    Name: Jayce Fox
    Title: Team Leader

FEDERAL HOME LOAN MORTGAGE CORPORATION

By: /s/ Charles W. Pearson
    -----------------------------------
    Name: Charles W. Pearson
    Title:

<PAGE>

                                                                       EXHIBIT A

                              [Form of Certificate]

         GREENPOINT HOME EQUITY LOAN TRUST 2000-2 CLASS A-1 CERTIFICATE

REGISTERED                                                           $
                                                                      ---------
No. A-1-
        ---

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This is one of the Class A-1 Certificates referred to in the
within-mentioned Trust Agreement.

                     BANK ONE, NATIONAL ASSOCIATION, not in
                     its individual capacity but solely as Trustee

                     By:
                        -------------------------------------
                              Authenticating Agent

     THE PRINCIPAL OF THIS CLASS A-1 CERTIFICATE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-1 CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.

<PAGE>

                    GREENPOINT HOME EQUITY LOAN TRUST 2000-2

                CLASS A-1 VARIABLE RATE ASSET BACKED CERTIFICATES

     GreenPoint Home Equity Loan Trust 2000-2, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to FEDERAL HOME LOAN
MORTGAGE CORPORATION, or registered assigns, the principal sum of
($            ), such amount payable on each Payment Date in an amount equal to
the result obtained by multiplying (i) a fraction the numerator of which is
$        and the denominator of which is $         by (ii) the aggregate amount,
if any, payable from the Collection Account in respect of principal on the Class
A-1 Certificates pursuant to Section 9.7 of the Pooling Agreement; provided,
however, that the entire unpaid principal amount of this Certificate shall be
due and payable on the Payment Date in                            (the "Final
Scheduled Payment Date"). The Issuer will pay interest on this Class A-1
Certificate at the rate per annum provided in the Pooling Agreement on each
Payment Date on the principal amount of this Class A-1 Certificate outstanding
on the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date). Interest on this Class A-1 Certificate will
accrue for each Payment Date from the most recent Payment Date on which interest
has been paid to but excluding such Payment Date or, if no interest has yet been
paid, from September 26, 2000. Interest will be computed on the basis of the
actual number of days elapsed in a 360-day year. Such principal of and interest
on this Class A-1 Certificate shall be paid in the manner specified on the
reverse hereof.

     The principal of and interest on this Class A-1 Certificate are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A-1 Certificate shall be applied first to
interest due and payable on this Class A-1 Certificate as provided above and
then to the unpaid principal of this Class A-1 Certificate.

     This Class A-1 Certificate is entitled to the benefits of a financial
guaranty insurance policy (the "Policy") issued by Financial Guaranty Insurance
Company (the "Insurer"), pursuant to which the Insurer has unconditionally
guaranteed payments of the Insured Payments with respect to the Class A-1
Certificates on each Payment Date, all as more fully set forth in the Pooling
Agreement. This Class A-1 Certificate is additionally entitled to the benefits
of a guaranty issued by Federal Home Loan Mortgage Corporation ("Freddie Mac")
pursuant to which Freddie Mac has unconditionally guaranteed payments of the
Insured Payments with respect to the Class A-1 Certificates on each Payment
Date, to the extent such amounts have not otherwise been paid by the Insurer,
all as more fully set out in the Pooling Agreement.

     For purposes of federal income, state and local income and franchise and
any other income taxes, the Issuer will treat the Class A-1 Certificates as
indebtedness of the Sponsor and hereby instructs the Trustee to treat the Class
A-1 Certificates as indebtedness of the Sponsor for federal and state tax
reporting purposes. Each Securityholder by acceptance of a Class A-1 Certificate
(and each owner of a beneficial interest in a Class A-1 Certificate by
acceptance of such beneficial interest) agrees to treat the Class A-1
Certificates for federal income, state and local income and franchise and any
other income taxes as indebtedness of the Sponsor.

<PAGE>

     Each Securityholder or Security Owner, by acceptance of this Class A-1
Certificate or, in the case of a Security Owner, a beneficial interest in a
Class A-1 Certificate, covenants and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Trustee on the Class A-1 Certificates or under the Pooling
Agreement or any certificate or other writing delivered in connection therewith,
against (i) the Sponsor, the Servicer, the Trustee, or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any owner, beneficiary, agent, officer, director or employee of the
Sponsor, the Servicer, the Trustee, or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Sponsor, the
Servicer, the Owner Trustee or the Trustee or of any successor or assign of the
Sponsor, the Servicer, the Trustee, or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Trustee and the Owner Trustee have no such obligations in
their individual capacity) and except that any such owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.

     Reference is made to the further provisions of this Class A-1 Certificate
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-1 Certificate.

     Unless the certificate of authentication hereon has been executed by the
Owner Trustee whose name appears below by manual signature, this Class A-1
Certificate shall not be entitled to any benefit under the Pooling Agreement
referred to on the reverse hereof, or be valid or obligatory for any purpose.

     This Class A-1 Certificate is one of a duly authorized issue of Class A-1
Certificates of the Issuer, designated as its Class A-1 Variable Rate Asset
Backed Certificates (herein called the "Class A-1 Certificates"), all issued
under a Trust Agreement dated as of September 1, 2000 (such trust agreement, as
supplemented or amended, is herein called the "Trust Agreement"), between
GreenPoint Mortgage Securities Inc., as sponsor, and Wilmington Trust Company,
as owner trustee (the "Owner Trustee", which term includes any successor Owner
Trustee under the Trust Agreement). Certain rights of Securityholders in the
Class A-1 Certificates are additionally described in the Pooling Agreement and
Indenture dated as of September 1, 2000 (such pooling agreement, as supplemented
or amended, is herein called the "Pooling Agreement"), between the Issuer, Bank
One, N.A., as trustee (the "Trustee", which term includes any successor Trustee
under the Pooling Agreement) and the Federal Home Loan Mortgage Corporation
("Freddie Mac"). Reference is made to the Trust Agreement and all trust
agreements supplemental thereto and to the Pooling Agreement and all pooling
agreements supplemental thereto for statements of the respective rights and
obligations thereunder of the Issuer, the Trustee, the Owner Trustee and the
Holders of the Class A-1 Certificates. The Class A-1 Certificates are subject to
all terms of the Trust Agreement and the Pooling Agreement. All terms used in
this Class A-1 Certificate that are defined in the Pooling Agreement, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Pooling Agreement, as so supplemented or amended. If any such terms are
not defined in the Pooling Agreement, as supplemented or amended, then such
terms shall have the meanings assigned to them in or pursuant to the Trust
Agreement, as so supplemented or amended.

<PAGE>

     The Class A-1 Certificates and the Class A-2 Notes (together, the
"Securities") are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Pooling Agreement.

     Principal of the Class A-1 Certificates will be payable on each Payment
Date in an amount described in the Pooling Agreement. "Payment Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 16, 2000. The term "Payment
Date" shall be deemed to include the Final Scheduled Payment Date.

     As described above, the entire unpaid principal amount of this Class A-1
Certificate shall be due and payable on the earlier of the Final Scheduled
Payment Date and the Redemption Date, if any, pursuant to Section 10.1 of the
Pooling Agreement. Notwithstanding the foregoing, on the date on which a Rapid
Amortization Period as described in Sections 5.1 and 12.1 of the Pooling
Agreement shall have occurred and be continuing and the Controlling Party or the
Holders representing more than 50% of the Outstanding Amount of the Class A-1
Certificates, as the case may be shall have the right among others to direct the
Trustee to sell or liquidate the Pool I Mortgage Loans as provided in Section
12.1 of the Pooling Agreement and pay such amounts to the Class A-1
Certificates. All principal payments on the Class A-1 Certificates shall be made
pro rata to the Holders of the Class A-1 Certificates entitled thereto. The
Policy or the Guarantee will cover any amounts by which such remaining net
proceeds are insufficient to pay the Class A-1 Principal Balance, together with
all accrued and unpaid interest thereon.

     Payments of interest on this Class A-1 Certificate due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Class A-1 Certificate, shall be made by wire
transfer in immediately available funds to the account designated by the Person
whose name appears as the Holder of this Class A-1 Certificate (or one or more
Predecessor Securities) on the Security Register as of the close of business on
each Record Date. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Security Register as of the
applicable Record Date without requiring that this Class A-1 Certificate be
submitted for notation of payment. Any reduction in the principal amount of this
Class A-1 Certificate (or any one or more Predecessor Securities) effected by
any payments made on any Payment Date shall be binding upon all future Holders
of this Class A-1 Certificate and of any Class A-1 Certificate issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Pooling Agreement, for payment in full of the then remaining unpaid principal
amount of this Class A-1 Certificate on a Payment Date, then the Trustee, in the
name of and on behalf of the Issuer, will notify the Person who was the Holder
hereof as of the Record Date preceding such Payment Date by notice mailed prior
to such Payment Date and the amount then due and payable shall be payable only
upon presentation and surrender of this Certificate at the office of the
Trustee's agent appointed for such purposes located in The City of New York.

     The Issuer shall pay interest on overdue installments of interest at the
Class A-1 Interest Rate to the extent lawful.

<PAGE>

     As provided in the Pooling Agreement, the Class A-1 Certificates may be
redeemed pursuant to Section 10.1 of the Pooling Agreement, in whole, but not in
part, at the option of the Sponsor (with the consent of the Controlling Party
under certain circumstances), on any Payment Date on or after the date on which
the Class A-1 Certificate Principal Balance is less than 10% of the Original
Class A-1 Certificate Principal Balance.

     As provided in the Pooling Agreement and subject to certain limitations set
forth therein, the transfer of this Class A-1 Certificate may be registered on
the Security Register upon surrender of this Class A-1 Certificate for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Pooling Agreement, (i) duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly executed
by, the Holder hereof or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Security Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("Stamp") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, Stamp, all in accordance with the Exchange
Act, and (ii) accompanied by such other documents as the Trustee may require,
and thereupon one or more new Class A-1 Certificates of authorized denominations
and in the same aggregate principal amount will be issued to the designated
transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A-1 Certificate, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

     Each Securityholder or Security Owner, by acceptance of a Class A-1
Certificate or, in the case of a Security Owner, a beneficial interest in a
Class A-1 Certificate covenants and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Trustee on the Class A-1 Certificates or under the Pooling
Agreement or any certificate or other writing delivered in connection therewith,
against (i) the Sponsor, the Servicer, the Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any owner, beneficiary, agent, officer, director or employee of the
Sponsor, the Servicer, the Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Sponsor, the
Servicer, the Owner Trustee or the Trustee or of any successor or assign of the
Sponsor, the Servicer, the Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Trustee and the Owner Trustee have no such obligations in
their individual capacity) and except that any such owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.

     Each Securityholder or Security Owner, by acceptance of a Class A-1
Certificate or, in the case of a Security Owner, a beneficial interest in a
Class A-1 Certificate covenants and agrees that by accepting the benefits of the
Pooling Agreement and the Trust Agreement that such Securityholder will not at
any time institute against the Sponsor, or the Issuer or join in any institution
against the Sponsor, or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Class A-1 Certificates, the Trust Agreement, the
Pooling Agreement or the Basic Documents.

<PAGE>

     Prior to the due presentment for registration of transfer of this Class A-1
Certificate, the Issuer, the Trustee, the Insurer and Freddie Mac and any agent
of the Issuer, the Trustee, the Insurer or Freddie Mac may treat the Person in
whose name this Class A-1 Certificate (as of the day of determination or as of
such other date as may be specified in the Pooling Agreement) is registered as
the owner hereof for all purposes, whether or not this Class A-1 Certificate be
overdue, and neither the Issuer, the Trustee nor any such agent shall be
affected by notice to the contrary.

     The Pooling Agreement permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Class A-1 Certificates under the
Pooling Agreement at any time by the Issuer with the consent of the Insurer,
Freddie Mac and of the Holders of Securities representing a majority of the
Outstanding Amount of all Securities at the time Outstanding. Any such consent
or waiver by the Holder of this Class A-1 Certificate (or any one or more
Predecessor Securities) shall be conclusive and binding upon such Holder and
upon all future Holders of this Class A-1 Certificate and of any Class A-1
Certificate issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Class A-1 Certificate. The Pooling Agreement also permits the
Trustee to amend or waive certain terms and conditions set forth in the Pooling
Agreement without the consent of Holders of the Securities but with the consent
of the Insurer and Freddie Mac.

     The term "Issuer" as used in this Class A-1 Certificate includes any
successor to the Issuer under the Pooling Agreement or the Trust Agreement.

     The Class A-1 Certificates are issuable only in registered form in
denominations as provided in the Trust Agreement, subject to certain limitations
therein set forth.

     This Class A-1 Certificate and the Trust Agreement shall be construed in
accordance with the laws of the State of Delaware, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws. The Pooling Agreement shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.

     No reference herein to the Trust Agreement or the Pooling Agreement and no
provision of this Class A-1 Certificate, the Trust Agreement or of the Pooling
Agreement shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and interest on this Class A-1
Certificate at the times, place, and rate, and in the coin or currency herein
prescribed.

     Anything herein to the contrary notwithstanding, except as expressly
provided in the Trust Agreement, the Pooling Agreement or the Basic Documents,
neither Wilmington Trust Company in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the payment
of principal of or interest on, or performance of, or omission to perform, any
of the covenants, obligations or

<PAGE>

indemnifications contained in this Class A-1 Certificate or the Pooling
Agreement, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Issuer for the sole purposes of binding
the interests of the Issuer in the assets of the Issuer. The Holder of this
Class A-1 Certificate by the acceptance hereof agrees that except as expressly
provided in the Pooling Agreement or the Basic Documents in the case of a Rapid
Amortization Event with respect to the Class A-1 Certificates under the Pooling
Agreement, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Pooling Agreement or in this Class A-1 Certificate.

<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.

Date: September 26, 2000                GREENPOINT HOME EQUITY
                                        LOAN TRUST 2000-2

                                        By: Wilmington Trust Company, not in its
                                            individual capacity but
                                            solely as Owner Trustee

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

                     --------------------------------------
                         (name and address of assignee)

the within Class A-1 Certificate and all rights thereunder, and hereby
irrevocably constitutes and appoints, attorney, to transfer said Class A-1
Certificate on the books kept for registration thereof, with full power of
substitution in the premises.

Dated:                                                                       (1)
      ------------------------                   ----------------------------
                                                     Signature Guaranteed:

--------------------
     (1) NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Class A-1
Certificate in every particular, without alteration, enlargement or any change
whatsoever.

<PAGE>

                                                                       EXHIBIT B

                              RESIDUAL CERTIFICATE

THIS RESIDUAL CERTIFICATE REPRESENTS CERTAIN RESIDUAL RIGHTS TO PAYMENT TO THE
EXTENT DESCRIBED HEREIN AND IN THE TRUST AGREEMENT REFERRED TO HEREIN.

THIS RESIDUAL CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON.

THIS RESIDUAL CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS RESIDUAL CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.10 OF THE TRUST AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS RESIDUAL CERTIFICATE MAY BE MADE UNLESS THE TRANSFEREE
PROVIDES A REPRESENTATION LETTER FROM THE TRANSFEREE OF SUCH RESIDUAL
CERTIFICATE, ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE, THE INSURER AND FREDDIE MAC, TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT
TO THE PROVISIONS OF TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(e)(1) OF
THE INTERNAL REVENUE CODE, NOR A PERSON ACTING ON BEHALF OF OR USING THE ASSETS
OF ANY SUCH PLAN, WHICH REPRESENTATION LETTER SHALL NOT BE AN EXPENSE OF THE
TRUSTEE, THE INSURER OR FREDDIE MAC.

NO TRANSFER OF A RESIDUAL CERTIFICATE SHALL BE MADE UNLESS SUCH TRANSFER IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR IS MADE IN ACCORDANCE WITH
SAID ACT AND LAWS. EXCEPT FOR THE INITIAL ISSUANCE OF THE RESIDUAL CERTIFICATE
TO THE SPONSOR, THE TRUSTEE SHALL REQUIRE (i) THE TRANSFEREE TO EXECUTE AN
INVESTMENT LETTER ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE, THE INSURER AND FREDDIE MAC CERTIFYING TO THE TRUSTEE, THE INSURER AND
FREDDIE MAC THE FACTS SURROUNDING SUCH TRANSFER, WHICH INVESTMENT LETTER SHALL
NOT BE AN EXPENSE OF THE TRUSTEE, THE INSURER OR FREDDIE MAC OR (ii) IF THE
INVESTMENT LETTER IS NOT DELIVERED, A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO
AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE, THE INSURER, FREDDIE MAC
AND THE SPONSOR THAT SUCH TRANSFER MAY BE MADE PURSUANT TO AN EXEMPTION,
DESCRIBING THE APPLICABLE EXEMPTION AND THE BASIS THEREFOR, FROM SAID ACT OR IS
BEING MADE PURSUANT TO SAID

                                      B-1
<PAGE>

ACT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
INSURER, FREDDIE MAC OR THE SPONSOR. THE HOLDER OF A RESIDUAL CERTIFICATE
DESIRING TO EFFECT SUCH TRANSFER SHALL, AND DOES HEREBY AGREE TO, INDEMNIFY THE
SPONSOR, THE INSURER AND FREDDIE MAC AGAINST ANY LIABILITY THAT MAY RESULT IF
THE TRANSFER IS NOT SO EXEMPT OR IS NOT MADE IN ACCORDANCE WITH SUCH FEDERAL AND
STATE LAWS.

THE RESIDUAL CERTIFICATES AND ANY INTEREST THEREIN SHALL NOT BE TRANSFERRED
EXCEPT UPON SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT: (I) THE PERSON
THAT ACQUIRES A RESIDUAL CERTIFICATE SHALL (A) BE ORGANIZED AND EXISTING UNDER
THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE OR THE DISTRICT OF
COLUMBIA THEREOF, (B) EXPRESSLY ASSUME, BY AN AGREEMENT SUPPLEMENTAL HERETO,
EXECUTED AND DELIVERED TO THE TRUSTEE, THE INSURER AND FREDDIE MAC, THE
PERFORMANCE OF EVERY COVENANT AND OBLIGATION OF THE SPONSOR UNDER THE TRUST
AGREEMENT AND (C) AS PART OF ITS ACQUISITION OF A RESIDUAL CERTIFICATE, ACQUIRE
ALL RIGHTS OF THE SPONSOR OR ANY TRANSFEREE UNDER SECTION 4.10 OF THE TRUST
AGREEMENT TO AMOUNTS PAYABLE TO THE RESIDUAL CERTIFICATE OR SUCH TRANSFEREE
UNDER SECTIONS 9.6(D)(XIV) AND 9.5(C) OF THE POOLING AGREEMENT; (II) THE HOLDER
OF THE RESIDUAL CERTIFICATES SHALL DELIVER TO THE TRUSTEE, THE INSURER AND
FREDDIE MAC AN OFFICER'S CERTIFICATE STATING THAT SUCH TRANSFER AND SUCH
SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION 4.10(C) OF THE TRUST AGREEMENT AND
THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION 4.10(C) OF THE TRUST AGREEMENT
HAVE BEEN COMPLIED WITH AND AN OPINION OF COUNSEL STATING THAT ALL CONDITIONS
PRECEDENT PROVIDED BY SECTION 4.10(C) OF THE TRUST AGREEMENT HAVE BEEN COMPLIED
WITH, AND THE TRUSTEE MAY CONCLUSIVELY RELY ON SUCH OFFICER'S CERTIFICATE, SHALL
HAVE NO DUTY TO MAKE INQUIRIES WITH REGARD TO THE MATTERS SET FORTH THEREIN AND
SHALL INCUR NO LIABILITY IN SO RELYING; (III) THE HOLDER OF THE RESIDUAL
CERTIFICATES SHALL DELIVER TO THE TRUSTEE, THE INSURER AND FREDDIE MAC A LETTER
FROM EACH RATING AGENCY CONFIRMING THAT ITS RATING OF THE SECURITIES, AFTER
GIVING EFFECT TO SUCH TRANSFER, WILL NOT BE REDUCED OR WITHDRAWN WITHOUT REGARD
TO THE POLICY; (IV) THE TRANSFEREE OF THE RESIDUAL CERTIFICATES SHALL DELIVER TO
THE TRUSTEE, THE INSURER AND FREDDIE MAC AN OPINION OF COUNSEL TO THE EFFECT
THAT (A) SUCH TRANSFER WILL NOT ADVERSELY AFFECT THE TREATMENT OF THE SECURITIES
AFTER SUCH TRANSFER AS DEBT FOR FEDERAL AND APPLICABLE STATE INCOME TAX
PURPOSES, (B) SUCH TRANSFER WILL NOT RESULT IN THE TRUST BEING SUBJECT TO TAX AT
THE ENTITY LEVEL FOR FEDERAL OR APPLICABLE STATE TAX PURPOSES, (C) SUCH TRANSFER
WILL NOT HAVE ANY MATERIAL ADVERSE IMPACT ON THE FEDERAL OR APPLICABLE STATE
INCOME TAXATION OF A SECURITYHOLDER OR ANY RESIDUAL CERTIFICATEHOLDER AND (D)
SUCH TRANSFER WILL NOT RESULT IN THE ARRANGEMENT CREATED BY THE TRUST AGREEMENT
OR ANY "PORTION" OF THE TRUST, BEING TREATED AS A TAXABLE

                                      B-2

<PAGE>

MORTGAGE POOL AS DEFINED IN SECTION 7701(I) OF THE CODE; (V) ALL FILINGS AND
OTHER ACTIONS NECESSARY TO CONTINUE THE PERFECTION OF THE INTEREST OF THE TRUST
IN THE MORTGAGE LOANS AND THE OTHER PROPERTY CONVEYED UNDER THE TRUST AGREEMENT
SHALL HAVE BEEN TAKEN OR MADE AND (VI) THE INSURER AND FREDDIE MAC SHALL HAVE
CONSENTED TO SUCH TRANSFER.

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

                                      B-3

<PAGE>

          GREENPOINT HOME EQUITY LOAN TRUST 2000-2 RESIDUAL CERTIFICATE

Percentage Interest: 100%                          Cut-Off Date: August 31, 2000
First Payment Date: October 16, 2000              Issue Date: September 26, 2000

No. 1

                       GREENPOINT MORTGAGE SECURITIES INC.
                           Residual Certificateholder

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This is one of the Residual Certificates referred to in the
within-mentioned Trust Agreement.

                      WILMINGTON TRUST COMPANY, not in its
                      individual capacity but solely as Owner Trustee

                      By:
                         -------------------------------
                              Authenticating Agent

     The Trust was created pursuant to a Trust Agreement dated as of September
1, 2000 (the "Trust Agreement"), between the Sponsor and Wilmington Trust
Company, as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.

     This Residual Certificate is one of the duly authorized Residual
Certificates designated as GreenPoint Home Equity Loan "Asset Backed
Certificates" (herein called the "Residual Certificates"). Also issued under the
Trust Agreement are two classes of Securities designated as Class A-1
Certificates and Class A-2 Notes (collectively referred to herein as the
"Certificates"). These Residual Certificates are issued under and are subject to
the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Residual Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of the Trust
includes (A) a pool of certain adjustable rate home equity revolving credit line
loans (the "HELOC Mortgage Loans") (including any Additional Balances related
thereto) and certain second lien closed-end loans (the "Closed End Mortgage
Loans") in each case which substantially conform to the loan origination
standards with respect to loan balances as of the date of origination set form
by the Federal Home Loan Mortgage Corporation ("Freddie Mac") and (B) a pool of
certain HELOC Mortgage Loans (including any Additional Balances related thereto)
and certain Closed End Mortgage Loans which may not so conform.

                                      B-4

<PAGE>

     Under the Trust Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next Business Day
(the "Payment Date"), commencing on October 16, 2000, to the Person in whose
name this Residual Certificate is registered at the close of business on the
Business Day preceding such Payment Date (the "Record Date") such Residual
Certificateholder's Percentage Interest in the amount to be distributed to
Residual Certificateholders on such Payment Date.

     The holder of this Residual Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Residual Certificate are
subordinated to the rights of the Securityholders as described in the Sale and
Servicing Agreement, the Pooling Agreement and the Trust Agreement, as
applicable.

     The holder of this Residual Certificate, by acceptance of this Residual
Certificate, specifically acknowledges that it has no right to or interest in
any monies at any time held pursuant to the Reserve Fund or prior to the release
of such monies pursuant to Sections 9.6(d)(xiii) and 9.5(c) of the Pooling
Agreement, such monies being held in trust for the benefit of the
Securityholders and the Controlling Party. Notwithstanding the foregoing, in the
event that it is ever determined that the monies held in the Reserve Fund
constitute a pledge of collateral, then the provisions of the Sale and Servicing
Agreement shall be considered to constitute a security agreement and the holder
of this Residual Certificate hereby grants to the Trustee and the Controlling
Party a first priority perfected security interest in such amounts. In addition,
each Residual Certificateholder, by acceptance of its Residual Certificate,
hereby appoints the Sponsor as its agent to pledge a first priority perfected
security interest in the Reserve Fund and agrees to execute and deliver such
instruments of conveyance, assignment, grant, confirmation, etc., as well as any
financing statements, in each case as the Controlling Party shall consider
reasonably necessary in order to perfect the Trustee's security interest in the
Trust Property.

     It is the intent of the Sponsor, the Servicer, and the Residual
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a branch. In the event that the Residual Certificates are held by
more than one Holder, it is the intent of the Sponsor, the Servicer, and the
Residual Certificateholders that, for purposes of Federal income taxes, the
Trust will be treated as a partnership and the Residual Certificateholders will
be treated as partners in that partnership. The Sponsor and any other Residual
Certificateholders, by acceptance of a Residual Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Residual Certificates
for such tax purposes as partnership interests in the Trust. Each Residual
Certificateholder, by its acceptance of a Residual Certificate, covenants and
agrees that such Residual Certificateholder will not at any time institute
against the Trust or the Sponsor, or join in any institution against the Trust
or the Sponsor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Residual Certificates, the Certificates, the Trust Agreement or any of the
Basic Documents.

     Distributions on this Residual Certificate will be made as provided in the
Sale and Servicing Agreement and the Pooling Agreement by the Trustee by wire
transfer or check mailed to the Residual Certificateholder of record in the
Residual Certificate Register without the

                                      B-5

<PAGE>

presentation or surrender of this Residual Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Residual Certificate
will be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Residual
Certificate at the office or agency maintained for the purpose by the Owner
Trustee in the Corporate Trust Office.

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

     Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee, by manual signature, this Residual
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.

     The Residual Certificates do not represent an obligation of, or an interest
in, the Company, the Sponsor, the Servicer, the Insurer, Freddie Mac, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
herein or in the Trust Agreement, the Pooling Agreement or the Basic Documents.
In addition, this Residual Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections with respect to the Mortgage Loans, as more specifically set forth
herein, in the Sale and Servicing Agreement and in the Pooling Agreement. A copy
of each of the Sale and Servicing Agreement and the Trust Agreement may be
examined during normal business hours at the principal office of the Sponsor,
and at such other places, if any, designated by the Sponsor, by any Residual
Certificateholder upon written request.

     The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Sponsor and the rights of the Residual Certificateholders under the Trust
Agreement at any time by the Sponsor and the Owner Trustee with the prior
written consent of the Insurer and Freddie Mac and with the consent of the
holders of the Securities and the Residual Certificates evidencing not less than
a majority of the outstanding Securities and the Residual Certificates. Any such
amendment shall be conclusive and binding upon the holder of this Residual
Certificate and on all future holders of this Residual Certificate and of any
Residual Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this Residual
Certificate. The Trust Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the holders of any of the Residual
Certificates (other than the Sponsor , the Insurer or Freddie Mac).

     As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Residual Certificate is registrable in
the Residual Certificate Register upon surrender of this Residual Certificate
for registration of transfer at the offices or agencies of the Residual
Certificate Registrar maintained by the Owner Trustee in the Corporate Trust
Office, accompanied by a written instrument of transfer in form satisfactory to
the Owner Trustee and the Residual Certificate Registrar duly executed by the
holder hereof or such holder's

                                      B-6

<PAGE>

attorney duly authorized in writing, and thereupon one or more new Residual
Certificates in authorized denominations evidencing the same aggregate interest
in the Trust will be issued to the designated transferee. The initial Residual
Certificate Registrar appointed under the Trust Agreement is Wilmington Trust
Company.

     Except for Residual Certificates issued to the Sponsor, the Residual
Certificates are issuable only as registered Residual Certificates without
coupons in denominations of $1,000 or integral multiples of $1,000 in excess
thereof. As provided in the Trust Agreement and subject to certain limitations
therein set forth, Residual Certificates are exchangeable for new Residual
Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Residual Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.

     The Owner Trustee, the Residual Certificate Registrar, the Insurer, Freddie
Mac and any agent of the Owner Trustee, the Residual Certificate Registrar, the
Insurer or Freddie Mac may treat the person in whose name this Residual
Certificate is registered as the owner hereof for all purposes, and none of the
Owner Trustee, the Residual Certificate Registrar, the Insurer, Freddie Mac nor
any such agent shall be affected by any notice to the contrary.

     The obligations and responsibilities created by the Trust Agreement and the
Trust created thereby shall terminate upon the payment to Residual
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement, the Pooling Agreement and the Sale and Servicing Agreement and
the disposition of all property held as part of the Trust. The Sponsor may at
its option redeem the Securities at a price and upon the satisfaction of certain
conditions specified in Section 6.01(b) of the Sale and Servicing Agreement, and
if all of the Securities are redeemed, such redemption may result in termination
of the Trust which may effect a transfer of the Residual Certificates; however,
such right of purchase is exercisable, subject to certain restrictions, only on
any Payment Date on or after the Payment Date immediately prior to which the
related Security Principal Balance for a Class of Securities is less than 10% of
the related Original Security Principal Balance for such Class of Securities,
all amounts due and owing to the Insurer for unpaid premiums and unreimbursed
draws related to such Class of Securities on the Policy and all other amounts
due and owing to the Insurer pursuant to the Insurance Agreement together with
interest thereon as provided under the Insurance Agreement, and, for the Class
A-1 Certificates, all amounts due and owing to Freddie Mac for unreimbursed
payments pursuant to the Guarantee have been paid.

     The recitals contained herein shall be taken as the statements of the
Sponsor or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Residual Certificate
or of any Mortgage Loan or related document.

     Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee, by manual or facsimile signature,
this Residual Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.

                                      B-7

<PAGE>

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

                                    GREENPOINT HOME EQUITY LOAN TRUST 2000-2

                                    By: WILMINGTON TRUST COMPANY, not in its
                                    individual capacity but solely as Owner
                                    Trustee

                                    By:
                                       ---------------------------------------
                                       Name:
                                       Title:

Dated: September 26, 2000

                                      B-8

<PAGE>

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

-------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)

-------------------------------------------------------------------------------
the within Residual Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
                            ---------------------------------------------------
Attorney to transfer said Residual Certificate on the books of the Residual
Certificate Registrar, with full power of substitution in the premises.

Dated:

                                                                             *
                                          -----------------------------------
                                          Signature Guaranteed:

                                                                             *
                                          -----------------------------------

---------------
*        NOTICE: The signature to this assignment must correspond with the name
         of the registered owner as it appears on the face of the within
         Residual Certificate in every particular, without alteration,
         enlargement or any change whatever. Such signature must be guaranteed
         by an "eligible guarantor institution" meeting the requirements of the
         Residual Certificate Registrar, which requirements include membership
         or participation in STAMP or such other "signature guarantee program"
         as may be determined by the Residual Certificate Registrar in addition
         to, or in substitution for, STAMP, all in accordance with the
         Securities Exchange Act of 1934, as amended.

<PAGE>

                                                                       EXHIBIT C

                             CERTIFICATE OF TRUST OF
                    GREENPOINT HOME EQUITY LOAN TRUST 2000-2

     This Certificate of Trust of GreenPoint Home Equity Loan Trust 2000-2 (the
"Trust"), dated as of September __, 2000, is being duly executed and filed by
Wilmington Trust Company, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, ss. 3801 et
seq.).

     1. Name. The name of the business trust formed hereby is GreenPoint Home
Equity Loan Trust 2000-2.

     2. Delaware Trust. The name and business address of the Owner Trustee of
the Trust in the State of Delaware is Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001. Attn:
Corporate Trust Administration.

     3. This Certificate of Trust will be effective September 26, 2000.

     IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.

                            WILMINGTON TRUST COMPANY,
                            not in its individual capacity but solely as Owner
                            Trustee of the Trust.

                            By:
                               -----------------------------------------
                               Name:
                               Title:

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