Document:

AMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                     Trustee

                    ----------------------------------------
                         POOLING AND SERVICING AGREEMENT
                          Dated as of September 1, 2004
                    ----------------------------------------

                     Asset-Backed Pass-Through Certificates

                                 Series 2004-IA1

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

SECTION                                                                                                        PAGE
-------                                                                                                        ----
<S>                                                                                                            <C>
                                                     ARTICLE I

                                                    DEFINITIONS

         SECTION 1.01.     Defined Terms..........................................................................4
         SECTION 1.02.     Allocation of Certain Interest Shortfalls.............................................50
         SECTION 1.03      Rights of the NIMS Insurer............................................................51

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

         SECTION 2.01.     Conveyance of Mortgage Loans..........................................................52
         SECTION 2.02.     Acceptance of REMIC I by the Trustee..................................................54
         SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Seller or the
                           Depositor; Payment of Prepayment Charge Payment Amounts...............................56
         SECTION 2.04.     [Reserved]............................................................................59
         SECTION 2.05.     Representations, Warranties and Covenants of the Master Servicer.
                            .....................................................................................59
         SECTION 2.06.     Issuance of the REMIC I Regular Interests and the Class R-I Interest.
                            .....................................................................................62
         SECTION 2.07.     Conveyance of the REMIC I Regular Interests; Acceptance of
                           REMIC I and REMIC II by the Trustee; Issuance of Class R
                           Certificates..........................................................................62

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

         SECTION 3.01.     Master Servicer to Act as Master Servicer.............................................65
         SECTION 3.02.     Collection of Certain Mortgage Loan Payments..........................................67
         SECTION 3.03.     [Reserved]............................................................................68
         SECTION 3.04.     Collection Account, Escrow Account and Distribution Account...........................68
         SECTION 3.05.     Permitted Withdrawals From the Collection Account, Escrow
                           Account and Distribution Account......................................................72
         SECTION 3.06.     Investment of Funds in the Collection Account, the Escrow Account,
                           the REO Account and the Distribution Account..........................................75
         SECTION 3.07.     Payment of Taxes, Insurance and Other Charges.........................................77
         SECTION 3.08.     Maintenance of Hazard Insurance.......................................................77
         SECTION 3.09.     Maintenance of Mortgage Blanket Insurance.............................................78

                                                        ii

<PAGE>

SECTION                                                                                                        PAGE
-------                                                                                                        ----

         SECTION 3.10.     Fidelity Bond; Errors and Omissions Insurance.........................................78
         SECTION 3.11.     Enforcement of Due-On-Sale Clauses; Assumption Agreements.............................79
         SECTION 3.12.     Realization Upon Defaulted Mortgage Loans.............................................80
         SECTION 3.13.     Title, Management and Disposition of REO Property.....................................81
         SECTION 3.14.     [Reserved]............................................................................85
         SECTION 3.15.     Reports of Foreclosure and Abandonment of Mortgaged Properties.
                            .....................................................................................85
         SECTION 3.16.     Optional Purchase of Defaulted Mortgage Loans.........................................85
         SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files.......................................86
         SECTION 3.18.     Servicing Compensation................................................................87
         SECTION 3.19.     Statement as to Compliance............................................................88
         SECTION 3.20.     Independent Public Accountants' Servicing Report......................................88
         SECTION 3.21.     Access to Certain Documentation.......................................................89
         SECTION 3.22.     [Reserved]............................................................................89
         SECTION 3.23.     Advance Facility......................................................................89

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS

         SECTION 4.01.     Distributions.........................................................................91
         SECTION 4.02.     Statements to Certificateholders......................................................97
         SECTION 4.03.     Remittance Reports and Other Reports to the Trustee; Advances;
                           Payments in Respect of Prepayment Interest Shortfalls................................101
         SECTION 4.04.     Allocation of Realized Losses........................................................103
         SECTION 4.05.     Compliance with Withholding Requirements.............................................105
         SECTION 4.06.     Commission Reporting.................................................................105
         SECTION 4.07.     [Reserved]...........................................................................107
         SECTION 4.08.     [Reserved]...........................................................................107
         SECTION 4.09.     [Reserved]...........................................................................107
         SECTION 4.10      Net WAC Rate Carryover Reserve Account...............................................107

                                                     ARTICLE V

                                                 THE CERTIFICATES

         SECTION 5.01.     The Certificates.....................................................................110
         SECTION 5.02.     Registration of Transfer and Exchange of Certificates................................112
         SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates....................................117
         SECTION 5.04.     Persons Deemed Owners................................................................117
         SECTION 5.05.     Certain Available Information........................................................118

                                                    ARTICLE VI

                                                        iii

<PAGE>

SECTION                                                                                                        PAGE
-------                                                                                                        ----

                                       THE DEPOSITOR AND THE MASTER SERVICER

         SECTION 6.01.     Liability of the Depositor and the Master Servicer...................................119
         SECTION 6.02.     Merger or Consolidation of the Depositor or the Master Servicer.
                            ....................................................................................119
         SECTION 6.03.     Limitation on Liability of the Depositor, the Master Servicer and Others.
                            ....................................................................................119
         SECTION 6.04.     Limitation on Resignation of the Master Servicer.....................................120
         SECTION 6.05.     Rights of the Depositor in Respect of the Master Servicer............................121
         SECTION 6.06.     Sub-Servicing Agreements Between the Master Servicer and Sub-
                           Servicers............................................................................121
         SECTION 6.07.     Successor Sub-Servicers..............................................................123
         SECTION 6.08.     Liability of the Master Servicer.....................................................123
         SECTION 6.09.     No Contractual Relationship Between Sub-Servicers and the NIMS
                           Insurer, the Trustee or Certificateholders...........................................123
         SECTION 6.10.     Assumption or Termination of Sub-Servicing Agreements by Trustee.
                            ....................................................................................124
         SECTION 6.11.     Sub-Servicing Accounts...............................................................124

                                                    ARTICLE VII

                                                      DEFAULT

         SECTION 7.01.     Master Servicer Events of Default....................................................125
         SECTION 7.02.     Trustee to Act; Appointment of Successor.............................................127
         SECTION 7.03.     Notification to Certificateholders...................................................129
         SECTION 7.04.     Waiver of Master Servicer Events of Default..........................................129

                                                   ARTICLE VIII

                                              CONCERNING THE TRUSTEE

         SECTION 8.01.     Duties of Trustee....................................................................131
         SECTION 8.02.     Certain Matters Affecting the Trustee................................................132
         SECTION 8.03.     The Trustee Not Liable for Certificates or Mortgage Loans............................133
         SECTION 8.04.     Trustee May Own Certificates.........................................................134
         SECTION 8.05.     Trustee's Fees and Expenses..........................................................134
         SECTION 8.06.     Eligibility Requirements for Trustee.................................................134
         SECTION 8.07.     Resignation and Removal of the Trustee...............................................135
         SECTION 8.08.     Successor Trustee....................................................................136
         SECTION 8.09.     Merger or Consolidation of Trustee...................................................136
         SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee........................................136
         SECTION 8.11.     Appointment of Custodians............................................................137
         SECTION 8.12.     Appointment of Office or Agency......................................................138

                                                        iiv

<PAGE>

SECTION                                                                                                        PAGE
-------                                                                                                        ----

         SECTION 8.13.     Representations and Warranties of the Trustee........................................138

                                                    ARTICLE IX

                                                    TERMINATION

         SECTION 9.01      Termination Upon Repurchase or Liquidation of All Mortgage Loans.
                            ....................................................................................140
         SECTION 9.02      Additional Termination Requirements..................................................142

                                                     ARTICLE X

                                                 REMIC PROVISIONS

         SECTION 10.01.    REMIC Administration................................................................143
         SECTION 10.02.    Prohibited Transactions and Activities..............................................145
         SECTION 10.03.    Master Servicer and Trustee Indemnification.........................................146

                                           ARTICLE XI

                                    MISCELLANEOUS PROVISIONS

         SECTION 11.01.    Amendment...........................................................................147
         SECTION 11.02.    Recordation of Agreement; Counterparts..............................................148
         SECTION 11.03.    Limitation on Rights of Certificateholders..........................................148
         SECTION 11.04.    Governing Law.......................................................................149
         SECTION 11.05.    Notices.............................................................................149
         SECTION 11.06.    Severability of Provisions..........................................................150
         SECTION 11.07.    Notice to Rating Agencies and the NIMS Insurer......................................150
         SECTION 11.08.    Article and Section References......................................................151
         SECTION 11.09.    Grant of Security Interest..........................................................151
         SECTION 11.10     Third Party Rights..................................................................152
</TABLE>

                                                        v

<PAGE>

Exhibits
--------

Exhibit A-1       Form of Class A-1 Certificate
Exhibit A-2       Form of Class A-2 Certificate
Exhibit A-3       Form of Class A-3 Certificate
Exhibit A-4       Form of Class M-1 Certificate
Exhibit A-5       Form of Class M-2 Certificate
Exhibit A-6       Form of Class M-3 Certificate
Exhibit A-7       Form of Class M-4 Certificate
Exhibit A-8       Form of Class M-5 Certificate
Exhibit A-9       Form of Class M-6 Certificate
Exhibit A-10      Form of Class M-7 Certificate
Exhibit A-11      Form of Class M-8 Certificate
Exhibit A-12      Form of Class M-9 Certificate
Exhibit A-13      Form of Class CE Certificate
Exhibit A-14      Form of Class P Certificate
Exhibit A-15      Form of Class R Certificate
Exhibit A-16      Form of Class R-X Certificate
Exhibit B         Form of Lost Note Affidavit
Exhibit C-1       Form of Trustee's Initial Certification
Exhibit C-2       Form of Trustee's Final Certification
Exhibit C-3       Form of Trustee's Receipt of Mortgage Note
Exhibit D         Form of Mortgage Loan Purchase Agreement
Exhibit E         Request for Release
Exhibit F-1       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of Class CE and Class P Certificates Pursuant to Rule 144A
                  Under the 1933 Act
Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of
                  Transferor Affidavit in Connection with Transfer of Residual
                  Certificates
Exhibit G         Form of Certification with respect to ERISA and the Code
Exhibit H         Form of Cap Contracts
Exhibit I         Loss Mitigation Action Plan
Exhibit J-1       Form of Certification to Be Provided by the Depositor with
                  Form 10-K
Exhibit J-2       Form of Certification to Be Provided to Depositor by the
                  Trustee
Exhibit K         Annual Statement of Compliance pursuant to Section 3.19

Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule

                                       vi

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of September 1, 2004, among AMERIQUEST MORTGAGE SECURITIES INC., as
Depositor, AMERIQUEST MORTGAGE COMPANY, as Master Servicer and DEUTSCHE BANK
NATIONAL TRUST COMPANY, as Trustee.

                             PRELIMINARY STATEMENT:

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

                                     REMIC I
                                     -------

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

<TABLE>
<CAPTION>
                                      REMIC I                           Initial                    Latest Possible
       Designation                Remittance Rate                Uncertificated Balance            Maturity Date(1)
       -----------                ---------------                ----------------------            ----------------
<S>                                 <C>                          <C>                              <C>
         I-LTAA                     Variable(2)                  $    294,005,127.47              October 25, 2034
         I-LTA1                     Variable(2)                  $      1,414,000.00              October 25, 2034
         I-LTA2                     Variable(2)                  $        574,000.00              October 25, 2034
         I-LTA3                     Variable(2)                  $        517,050.00              October 25, 2034
         I-LTM1                     Variable(2)                  $        112,500.00              October 25, 2034
         I-LTM2                     Variable(2)                  $        106,500.00              October 25, 2034
         I-LTM3                     Variable(2)                  $         33,000.00              October 25, 2034
         I-LTM4                     Variable(2)                  $         69,000.00              October 25, 2034
         I-LTM5                     Variable(2)                  $         28,500.00              October 25, 2034
         I-LTM6                     Variable(2)                  $         27,000.00              October 25, 2034
         I-LTM7                     Variable(2)                  $         21,000.00              October 25, 2034
         I-LTM8                     Variable(2)                  $         31,500.00              October 25, 2034
         I-LTM9                     Variable(2)                  $         22,500.00              October 25, 2034
         I-LTZZ                     Variable(2)                  $      3,043,554.64              October 25, 2034
          I-LTP                     Variable(2)                  $            100.00              October 25, 2034
</TABLE>
----------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each REMIC I
         Regular Interest.
(2)      Calculated in accordance with the definition of "REMIC I Remittance
         Rate" herein.

<PAGE>

                                    REMIC II
                                    --------

          As provided herein, the Trustee will elect to treat the segregated
pool of assets consisting of the REMIC I Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated
Classes of Certificates.

<TABLE>
<CAPTION>
                                                                   Initial Aggregate
                                                                 Certificate Principal             Latest Possible
           Designation                 Pass-Through Rate                Balance                   Maturity Date(1)
           -----------                 -----------------                -------                   ----------------
<S>                                      <C>                     <C>                              <C>
            Class A-1                    Variable(2)             $   141,000,000.00               October 25, 2034
            Class A-2                    Variable(2)             $    57,400,000.00               October 25, 2034
            Class A-3                    Variable(2)             $    51,705,000.00               October 25, 2034
            Class M-1                    Variable(2)             $    11,250,000.00               October 25, 2034
            Class M-2                    Variable(2)             $    10,650,000.00               October 25, 2034
            Class M-3                    Variable(2)             $     3,300,000.00               October 25, 2034
            Class M-4                    Variable(2)             $     6,900,000.00               October 25, 2034
            Class M-5                    Variable(2)             $     2,850,000.00               October 25, 2034
            Class M-6                    Variable(2)             $     2,700,000.00               October 25, 2034
            Class M-7                    Variable(2)             $     2,100,000.00               October 25, 2034
            Class M-8                    Variable(2)             $     3,150,000.00               October 25, 2034
            Class M-9                    Variable(2)             $     2,250,000.00               October 25, 2034
        Class CE Interest               Variable(2)(3)           $     4,350,232.11               October 25, 2034
        Class P Interest                    N/A(4)               $           100.00               October 25, 2034
</TABLE>
----------------
1)       Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class CE Interest will accrue interest at its variable Pass-Through
         Rate on the Notional Amount of the Class CE Interest outstanding from
         time to time which shall equal the Uncertificated Balance of the REMIC
         I Regular Interests (other than REMIC I Regular Interest I-LTP). The
         Class CE Interest will not accrue interest on its Certificate Principal
         Balance.
(4)      The Class P Interest will not accrue interest.

                                        2

<PAGE>

                                    REMIC III
                                    ---------

          As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class CE Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC III." The Class R-III Interest will evidence the sole class
of "residual interests" in REMIC III for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated Class
of Certificates.

<TABLE>
<CAPTION>
                                                                   Initial Aggregate
                                                                 Certificate Principal             Latest Possible
           Designation                 Pass-Through Rate                Balance                   Maturity Date(1)
           -----------                 -----------------                -------                   ----------------
<S>                                      <C>                       <C>                            <C>
      Class CE Certificates              Variable(2)               $   4,350,232.11               October 25, 2034
</TABLE>
     -----------------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for the Class CE
         Certificates.
(2)      The Class CE Certificates will receive 100% of amounts received in
         respect of the Class CE Interest.

                                        3

<PAGE>

                                    REMIC IV
                                    --------

          As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class P Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC IV." The Class R-IV Interest will evidence the sole class
of "residual interests" in REMIC IV for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, solely for purposes of
satisfying Treasury regulation section 1.860G- 1(a)(4)(iii), the "latest
possible maturity date" for the indicated Class of Certificates:

<TABLE>
<CAPTION>
                                                                   Initial Aggregate
                                                                 Certificate Principal             Latest Possible
           Designation                 Pass-Through Rate                Balance                   Maturity Date(1)
           -----------                 -----------------                -------                   ----------------
<S>                                      <C>                     <C>                              <C>
      Class P Certificates               Variable(2)             $         100.00                 October 25, 2034
</TABLE>
     -----------------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for the Class P
         Certificates.
(2)      The Class P Certificates will receive 100% of amounts received in
         respect of the Class P Interest.

                  As of the Cut-off Date, the Mortgage Loans had an aggregate
Scheduled Principal Balance equal to $300,005,332.11.

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

                                        4

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

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

                  "Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Adjustable-Rate
Certificates and the Fixed-Rate Certificates or the Notional Amount in the case
of the Class CE Certificates, of such Certificate immediately prior to such
Distribution Date. The Class P Certificates are not entitled to distributions in
respect of interest and, accordingly, shall not accrue interest. All
distributions of interest on the Adjustable-Rate Certificates shall be
calculated on the basis of a 360- day year and the actual number of days in the
applicable Interest Accrual Period. All distributions of interest on the
Fixed-Rate Certificates and the Class CE Certificates shall be based on a
360-day year consisting of twelve 30-day months. Accrued Certificate Interest
with respect to each Distribution Date, as to any Class A Certificate or
Mezzanine Certificate, shall be reduced by an amount equal to the portion
allocable to such Certificate pursuant to Section 1.02 hereof of the sum of (a)
the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
to the extent not covered by payments pursuant to Section 4.03(e) or allocated
to the Class CE Certificates pursuant to Section 1.02 and (b) the aggregate
amount of any Relief Act Interest Shortfall, if any, for such Distribution Date
not allocated to the Class CE Certificates pursuant to Section 1.02. Accrued
Certificate Interest with respect to each Distribution Date and any Class CE
Certificate shall be reduced by (a) Prepayment Interest Shortfalls, if any,
allocated to such Class of Certificates pursuant to Section 1.02 hereof, (b)
Relief Act Interest Shortfalls, if any, allocated to such Class of Certificates
pursuant to Section 1.02 hereof and (c) an amount equal to the portion of
Realized Losses, if any, allocable to interest on the Class CE Certificate
pursuant to Section 4.04 hereof.

                  "Adjustable-Rate Certificates": The Class A Certificates and
the Mezzanine Certificates.

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

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

                                        5

<PAGE>

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

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

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

                  "Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) the
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount remaining from
the previous Distribution Date, reduced by the amount of the increase in the
Certificate Principal Balance of such Class of Certificates due to the receipt
of Subsequent Recoveries as provided in Section 4.01.

                  "Applicable Regulations": As to any Mortgage Loan, all
federal, state and local laws, statutes, rules and regulations applicable
thereto.

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

                  "Available Funds": With respect to any Distribution Date, an
amount equal to (1) the sum of (a) the aggregate of the amounts on deposit in
the Collection Account and Distribution Account as of the close of business on
the related Determination Date, including any Subsequent Recoveries, (b) the
aggregate of any amounts received in respect of an REO Property withdrawn from
any REO Account and deposited in the Distribution Account for such Distribution
Date pursuant to Section 3.13, (c) Compensating Interest, if any, deposited in
the Distribution Account by the Master Servicer in respect of Prepayment
Interest Shortfalls for such Distribution Date pursuant to Section 4.03(e), (d)
the aggregate of any Advances made by the Master Servicer for such Distribution
Date pursuant to Section 4.03 and (e) the aggregate of any Advances made by the
successor Master Servicer or the Trustee for such Distribution Date pursuant to
Section 7.02(b), reduced (to not less than zero) by (2) the sum of (x) the
portion of the amount described in clause (1)(a) above that represents (i)
Monthly Payments on the Mortgage Loans received from a Mortgagor

                                        6

<PAGE>

on or prior to the Determination Date but due during any Due Period subsequent
to the related Due Period, (ii) Principal Prepayments on the Mortgage Loans
received after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent they represent
the payment of interest accrued on the Mortgage Loans during a period subsequent
to the related Prepayment Period), (iii) Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries received in respect of the Mortgage Loans
after the related Prepayment Period, (iv) amounts reimbursable or payable to the
Depositor, the Master Servicer, the Trustee, the Seller or any Sub-Servicer
pursuant to Section 3.05 or Section 3.06 or otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee
payable from the Distribution Account pursuant to Section 8.05, (vii) amounts
deposited in the Collection Account or the Distribution Account in error and
(viii) the amount of any Prepayment Charges collected by the Master Servicer and
the amount of any Master Servicer Prepayment Charge Payment Amounts and (y)
amounts reimbursable to the Trustee for an advance made pursuant to Section
7.02(b) which advance the Trustee has determined to be nonrecoverable from the
Stayed Funds in respect of which it was made.

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

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

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

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

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

                  "Cap Amount": For each Class of Adjustable Rate Certificates,
is equal to (i) the aggregate amount received by the Trust Fund from the related
Cap Contract, multiplied by (ii) a fraction equal to (a) the Certificate
Principal Balance of such Class immediately prior to the applicable Distribution
Date divided by (b) the aggregate Certificate Principal Balance immediately
prior to the applicable Distribution Date of all Classes of Adjustable Rate
Certificates, directly benefitting from such Cap Contract.

                  "Cap Contract Excess": With respect to any Cap Contract and
Distribution Date, the excess, if any, of the then applicable maximum rate set
forth in such Cap Contract over the then applicable strike rate set forth in
such Cap Contract.

                  "Cap Contracts": The interest rate corridors between Deutsche
Bank National Trust Company, as Trustee, and the counterparty thereunder, for
the benefit of the Holders of (i) the Class

                                        7

<PAGE>

A Certificates and (ii) the Mezzanine Certificates, together, forms of which are
attached hereto as Exhibit H.

                  "Certificate": Any one of the Depositor's Asset-Backed
Pass-Through Certificates, Series 2004-IA1, Class A-1, Class A-2, Class A-3,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9, Class CE, Class P and Class R, issued under this
Agreement.

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

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

                  "Certificate Margin": With respect to each Class of
Adjustable-Rate Certificates and for purposes of the Marker Rate and the Maximum
I-LTZZ Uncertificated Interest Deferral Amount, the specified REMIC I Regular
Interest, as follows:

                    REMIC I Regular                 Certificate Margin
     Class             Interest               (1) (%)              (2) (%)
     -----             --------               -------              -------
      A-1               I-LTA1                 0.250                0.500
      A-2               I-LTA2                 0.410                0.820
      A-3               I-LTA3                 0.650                1.300
      M-1               I-LTM1                 0.800                1.200
      M-2               I-LTM2                 0.900                1.350
      M-3               I-LTM3                 1.050                1.575
      M-4               I-LTM4                 1.500                2.250
      M-5               I-LTM5                 1.750                2.625
      M-6               I-LTM6                 2.220                3.330
      M-7               I-LTM7                 3.500                5.250

                                        8

<PAGE>

      M-8               I-LTM8                 3.500                5.250
      M-9               I-LTM9                 2.500                 3.75
         ----------
         (1) For the Interest Accrual Period for each Distribution Date on or
             prior to the Optional Termination Date.
         (2) For each other Interest Accrual Period.

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

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination plus, with
respect to each Mezzanine Certificate, any increase the Certificate Principal
Balance of such Certificate pursuant to Section 4.01 due to the receipt of
Subsequent Recoveries, minus all distributions allocable to principal made
thereon on such Distribution Date and, in the case of a Mezzanine Certificate,
Realized Losses allocated thereto on such immediately prior Distribution Date
(or, in the case of any date of determination up to and including the first
Distribution Date, the initial Certificate Principal Balance of such
Certificate, as stated on the face thereof). With respect to each Class CE
Certificate as of any date of determination, an amount equal to the Percentage
Interest evidenced by such Certificate times the excess, if any, of (A) the then
aggregate Uncertificated Balances of the REMIC I Regular Interests over (B) the
then aggregate Certificate Principal Balance of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates then outstanding.

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

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

                  "Class A Certificate": Any one of the Class A-1 Certificates,
the Class A-2 Certificates or the Class A-3 Certificates.

&&&

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
aggregate Certificate Principal Balance of the Class A Certificates and (II) the
excess of (x) the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 67.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
approximately $1,500,031.

                                        9

<PAGE>

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

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

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

                  "Class CE Certificate": Any one of the Class CE Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-13 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class CE Interest": An uncertificated interest in the Trust
held by the Trustee on behalf of the Holders of the Class CE Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date) and (ii) the Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 74.50% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
approximately $1,500,031.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form

                                       10

<PAGE>

annexed hereto as Exhibit A-5 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 81.60% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus approximately $1,500,031.

                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date) and (iv)
the Certificate Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
83.80% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus approximately $1,500,031.

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form

                                       11

<PAGE>

annexed hereto as Exhibit A-7 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (v) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 88.40% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
approximately $1,500,031.

                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-5 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (vi) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 90.30% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received

                                       12

<PAGE>

during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus approximately
$1,500,031.

                  "Class M-6 Certificate": Any one of the Class M-6 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-9 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-6 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date) and (vii)
the Certificate Principal Balance of the Class M-6 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
92.10% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus approximately $1,500,031.

                  "Class M-7 Certificate": Any one of the Class M-7 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-10 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-7 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-7 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of

                                       13

<PAGE>

the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal
Distribution Amount on such Distribution Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the payment of
the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the
Certificate Principal Balance of the Class M-5 Certificates (after taking into
account the payment of the Class M-5 Principal Distribution Amount on such
Distribution Date), (vii) the Certificate Principal Balance of the Class M-6
Certificates (after taking into account the payment of the Class M-6 Principal
Distribution Amount on such Distribution Date) and (viii) the Certificate
Principal Balance of the Class M-7 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 93.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus approximately $1,500,031.

                  "Class M-8 Certificate": Any one of the Class M-8 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-11 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-8 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-8 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date) and (ix) the Certificate
Principal Balance of the Class M-8 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 95.60% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving

                                       14

<PAGE>

effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
approximately $1,500,031.

                  "Class M-9 Certificate": Any one of the Class M-9 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-12 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-9 Principal Distribution Amount": With respect to any
Distribution Date, an amount, not less than zero, equal to the lesser of (I) the
Certificate Principal Balance of the Class M-8 Certificates immediately prior to
such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment of
the Class M-8 Principal Distribution Amount on such Distribution Date) and (x)
the Certificate Principal Balance of the Class M-9 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
97.10% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus approximately $1,500,031.

                  "Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-14,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC IV.

                                       15

<PAGE>

                  "Class P Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class P Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class R Certificate": Any one of the Class R Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-15 and
evidencing the ownership of the Class R-I Interest and the Class R-II Interest.

                  "Class R-X Certificate": Any one of the Class R-X Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-16 and
evidencing the ownership of the Class R-III Interest and the Class R-IV
Interest.

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

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

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

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

                  "Closing Date": September 20, 2004.

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

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.04(a), which shall be
entitled "Ameriquest Mortgage Company, as Master Servicer for Deutsche Bank
National Trust Company, as Trustee, in trust for the registered holders of
Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through Certificates,
Series 2004-IA1." The Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Compensating Interest": As defined in Section 4.03(e) hereof.

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

                  "Corresponding Certificate": With respect to each REMIC I
Regular Interest, as follows:

                                       16

<PAGE>

          REMIC I Regular Interest               Class
          ------------------------               -----
REMIC I Regular Interest I-LTA1                   A-1
REMIC I Regular Interest I-LTA2                   A-2
REMIC I Regular Interest I-LTA3                   A-3
REMIC I Regular Interest I-LTM1                   M-1
REMIC I Regular Interest I-LTM2                   M-2
REMIC I Regular Interest I-LTM3                   M-3
REMIC I Regular Interest I-LTM4                   M-4
REMIC I Regular Interest I-LTM5                   M-5
REMIC I Regular Interest I-LTM6                   M-6
REMIC I Regular Interest I-LTM7                   M-7
REMIC I Regular Interest I-LTM8                   M-8
REMIC I Regular Interest I-LTM9                   M-9
REMIC I Regular Interest I-LTP                     P

                  "Credit Enhancement Percentage": For any Distribution Date and
the Class A Certificates and any Class of Mezzanine Certificates, the percentage
equivalent of a fraction, calculated after taking into account distribution of
the Principal Distribution Amount to the Certificates then entitled to
distributions of principal on such Distribution Date, the numerator of which is
the sum of the aggregate Certificate Principal Balances of the Classes of
Certificates with a lower distribution priority than such Class, and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period).

                  "Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month (reduced by the aggregate amount of
Subsequent Recoveries received from the Cut-off Date through the last day of the
related Due Period) and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  "Custodian": A Custodian, which shall initially be Deutsche
Bank National Trust Company.

                  "Cut-off Date": With respect to any Mortgage Loan, September
1, 2004. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

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

                  "Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding

                                       17

<PAGE>

Stated Principal Balance of the Mortgage Loan, which valuation results from a
proceeding initiated under the Bankruptcy Code.

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

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

                  "Delinquency Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate Stated Principal Balance of all Mortgage Loans as of the last day of
the previous calendar month that, as of such last day of the previous calendar
month, are 60 or more days delinquent (measured under the OTS delinquency
calculation methodology and with respect to modifications, measured as set forth
below), are in foreclosure, have been converted to REO Properties or have been
discharged by reason of bankruptcy, and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties as
of the last day of the previous calendar month; provided, however, that any
Mortgage Loan purchased by the Master Servicer or the NIMS Insurer pursuant to
Section 3.16 shall not be included in either the numerator or the denominator
for purposes of calculating the Delinquency Percentage.

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

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

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

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

                  "Determination Date": With respect to each Distribution Date,
the 10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding such
10th day.

                                       18

<PAGE>

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.04(e), which shall be
entitled "Deutsche Bank National Trust Company, as Trustee, in trust for the
registered Holders of Ameriquest Mortgage Securities Inc., Asset-Backed
Pass-Through Certificates, Series 2004-IA1." The Distribution Account must be an
Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the next succeeding Business Day, commencing in
October 2004.

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

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

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution or trust company the short-term
unsecured debt obligations of which are rated, "F-1" by

                                       19

<PAGE>

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

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

                  "Escrow Account": The account or accounts created and
maintained pursuant to Section 3.04(c).

                  "Escrow Payments": The amounts constituting taxes, and/or fire
and hazard insurance premiums escrowed by the Mortgagor with the mortgagee
pursuant to a voluntary escrow agreement related to any Mortgage Loan.

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

                  "Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
(calculated for this purpose only after assuming that 100% of the Principal
Remittance Amount on such Distribution Date has been distributed) over (ii) the
Overcollateralization Target Amount for such Distribution Date.

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

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

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

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

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

                                       20

<PAGE>

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller, the Depositor or the Master Servicer pursuant to or as
contemplated by Section 2.03, Section 3.16(a) or Section 9.01), a determination
made by the Master Servicer that all Insurance Proceeds, Liquidation Proceeds
and other payments or recoveries which the Master Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Master Servicer shall maintain records, prepared by a
Servicing Officer, of each Final Recovery Determination made thereby.

                  "Fitch": Fitch Ratings, or its successor in interest.

                  "Fixed-Rate Certificates": None.

                  "Fixed-Rate Mortgage Loan": Each of the Mortgage Loans
identified on the Mortgage Loan Schedule as having a fixed Mortgage Rate.

                  "Formula Rate": For any Distribution Date and each class of
Adjustable-Rate Certificates, the lesser of (i) One-Month LIBOR plus the related
Certificate Margin and (ii) the related Maximum Cap Rate.

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

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

                  "Highest Priority" shall be determined based on the following
order of priority, from highest to lowest: the Class M-1 Certificates, the Class
M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates,
the Class M-8 Certificates and the Class M-9 Certificates.

                  "HOEPA": The Home Ownership and Equity Protection Act of 1994.

                  "Indenture": An indenture relating to the issuance of notes
secured by all or a portion of the Class CE Certificates, the Class P
Certificates and/or the Class R Certificates, which may or may not be guaranteed
by the NIMS Insurer.

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Seller and their respective Affiliates, (b) does not have any
direct financial interest in or any material indirect financial interest in the
Depositor, the Seller, the Master Servicer or any Affiliate thereof, and (c) is
not connected with the Depositor, the Seller, the Master Servicer or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Seller, the
Master

                                       21

<PAGE>

Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor or the
Master Servicer or any Affiliate thereof, as the case may be.

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

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

                  "Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy, covering a Mortgage Loan, including, without
limitation, any recoveries under the related Insured AVM Policy, to the extent
such proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, subject to the terms and conditions of the related Mortgage Note and
Mortgage.

                  "Insured AVM Policy": With respect to any Mortgage Loan, the
related policy which provides coverage for certain losses related to the
valuation of such Mortgaged Property upon the liquidation of such Mortgaged
Property in an amount equal to the lesser of: (i) losses of principal and (ii)
the amount by which the Insured AVM overstated the Mortgaged Property's value at
origination.

                  "Interest Accrual Period": With respect to any Distribution
Date and the Adjustable- Rate Certificates, the period commencing on the
Distribution Date in the month immediately preceding the month in which such
Distribution Date occurs (or, in the case of the first Distribution Date,
commencing on the Closing Date) and ending on the day preceding such
Distribution Date. With respect to any Distribution Date and the Fixed-Rate
Certificates, the Class CE Certificates and the REMIC I Regular Interests, the
one-month period ending on the last day of the calendar month preceding the
month in which such Distribution Date occurs.

                                       22

<PAGE>

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

                  "Interest Determination Date": With respect to the
Adjustable-Rate Certificates, and solely for purposes of calculating the Marker
Rate, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8 and REMIC I Regular
Interest I-LTM9 and any Interest Accrual Period therefor, the second LIBOR
Business Day preceding the commencement of such Interest Accrual Period.

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

                  "Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date that
represents interest received or advanced on the Mortgage Loans.

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

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

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

                  "Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the

                                       23

<PAGE>

Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan through a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.13, Section 3.16(a) or Section 9.01.

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

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

                  "Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost, misplaced or
destroyed and has not been replaced, an affidavit from the Seller certifying
that the original Mortgage Note has been lost, misplaced or destroyed (together
with a copy of the related Mortgage Note) and indemnifying the Trust Fund
against any loss, cost or liability resulting from the failure to deliver the
original Mortgage Note, in the form of Exhibit B hereto.

                  "Marker Rate": With respect to the Class CE Interest and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular Interest I- LTA3, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC I Regular Interest
I-LTZZ, with the rate on each such REMIC I Regular Interest (other than REMIC I
Regular Interest I-LTZZ) subject to the lesser of (i) LIBOR plus the related
Certificate Margin and (ii) the Net WAC Pass-Through Rate for the purpose of
this calculation for such Distribution Date and with the rate on REMIC I Regular
Interest I-LTZZ subject to a cap of zero for the purpose of this calculation;
provided, however, that solely for this purpose, calculations of the REMIC I
Remittance Rate and the related caps with respect to REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC
I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8 and REMIC I Regular Interest I-LTM9 shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Interest Accrual Period and the denominator of which is 30.

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

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

                                       24

<PAGE>

                  "Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer pursuant to Section 2.03(b) in respect of
any waived (or, with respect to subsequent changes of law, any unenforceable)
Prepayment Charges.

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

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

                  "Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds 4.00%.

                  "Maximum Cap Rate": For any Distribution Date with respect to
each class of Class A- Certificates and Mezzanine Certificates, a per annum rate
equal to the sum of (i) the product of (x) the weighted average of the Expense
Adjusted Net Maximum Mortgage Rates of the Mortgage Loans, weighted on the basis
of the outstanding Stated Principal Balances as of the first day of the month
preceding the month of such Distribution Date (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (y) a fraction, the numerator of which is the
actual number of days elapsed in the related Interest Accrual Period and the
denominator of which is 30 and (ii) the related Cap Contract Excess. If the
Certificate Principal Balance of the applicable Certificates exceeds the
applicable notional balance for such Distribution Date, the Cap Contract Excess
is to be adjusted by multiplying the applicable Cap Contract Excess by a
fraction, the numerator of which is the applicable notional balance for such
Distribution Date and the denominator of which is the aggregate Certificate
Principal Balance of the Class A Certificates and the Mezzanine Certificates
immediately prior to such Distribution Date.

                  "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8 and REMIC I Regular Interest
I-LTM9 for such Distribution Date, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the lesser of (i) LIBOR plus the related
Certificate Margin and (ii) the Net WAC Pass- Through Rate; provided, however,
that solely for this purpose, calculations of the REMIC I Remittance Rate and
the related caps with respect to REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8 and REMIC I Regular Interest I-LTM9 shall be

                                       25

<PAGE>

multiplied by a fraction, the numerator of which is the actual number of days in
the Interest Accrual Period and the denominator of which is 30.

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

                  "Mezzanine Cap Contract": The cap contract between Deutsche
Bank National Trust Company, as Trustee and the counterparty thereunder, which
is for the benefit of the Holders of the Mezzanine Certificates, a form of which
is attached hereto as Exhibit H.

                  "Mezzanine Certificate": Any of the Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class
M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates and Class M-9 Certificates.

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

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.02; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

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

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

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

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

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

                  (1) the Seller's Mortgage Loan identifying number;

                                       26

<PAGE>

                  (2) [Reserved];

                  (3) the state and zip code of the Mortgaged Property;

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

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

                  (6) the original months to maturity;

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

                  (8) the Mortgage Rate in effect immediately following the
         Cut-off Date;

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

                  (10) the stated maturity date;

                  (11) the amount of the Monthly Payment due on the first Due
         Date after the Cut- off Date;

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

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

                  (14) the Scheduled Principal Balance of the Mortgage Loan as
         of the close of business on the Cut-off Date;

                  (15) with respect to the Adjustable-Rate Mortgage Loans, the
         Gross Margin;

                  (16) a code indicating the purpose of the Mortgage Loan (I.E.,
         purchase, refinance debt consolidation cashout, or refinance debt
         consolidation no cashout);

                  (17) with respect to the Adjustable-Rate Mortgage Loans, the
         Maximum Mortgage Rate;

                  (18) with respect to the Adjustable-Rate Mortgage Loans, the
         Minimum Mortgage Rate;

                  (19) the Mortgage Rate at origination;

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

                                       27

<PAGE>

                  (21) a code indicating the documentation program (I.E., Full
         Documentation, Limited Documentation or Stated Income);

                  (22) with respect to the Adjustable-Rate Mortgage Loans, the
         first Adjustment Date immediately following the Cut-off Date;

                  (23) the risk grade;

                  (24) the Value of the Mortgaged Property;

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

                  (26) the FICO score of the primary Mortgagor.

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

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

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

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

                                       28

<PAGE>

the annual rate determined in accordance with the immediately preceding sentence
as of the date such Mortgage Loan became an REO Property.

                  "Mortgaged Property": The underlying property identified in
the related Mortgage as securing a Mortgage Loan, including any REO Property,
consisting of an Estate in Real Property improved by a Residential Dwelling
(excluding for purposes of construing the representations or warranties made in
the Mortgage Loan Purchase Agreement, any improvements thereupon not considered
by the appraiser in determining the Value of such Mortgaged Property).

                  "Mortgagor":  The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Senior
Interest Distribution Amount, (B) the Interest Distribution Amounts payable to
the Mezzanine Certificates and (C) the Principal Remittance Amount.

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

                  "Net WAC Pass-Through Rate": For any Distribution Date with
respect to the Class A Certificates and the Mezzanine Certificates, a per annum
rate equal to the product of (x) the weighted average of the Expense Adjusted
Net Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated
Principal Balances of the Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (y) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Interest Accrual Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of the REMIC
I Remittance Rates on the REMIC I Regular Interests, weighted on the basis of
the Uncertificated Balance of each such REMIC I Regular Interest.

                  "Net WAC Rate Carryover Amount": With respect to any Class of
Class A Certificates and the Mezzanine Certificates and any Distribution Date,
the sum of (A) the excess, if any, of (i) the amount of interest such
Certificates would have accrued for such Distribution Date had the applicable
Pass-Through Rate been calculated at the related Formula Rate (in the case of
the Adjustable-Rate Certificates) or the applicable fixed-rate (in the case of
the Fixed-Rate Certificates), over (ii) the amount of interest accrued on such
Certificates at the Net WAC Pass-Through Rate for such Distribution Date and (B)
the related Net WAC Rate Carryover Amount for the previous Distribution Date not
previously paid, together with interest thereon at a rate equal to the related
Formula Rate (in the case of the Adjustable-Rate Certificates) or the applicable
fixed-rate (in the case of the Fixed-Rate Certificates) applicable for such
Class, in each case for the Interest Accrual Period for the current Distribution
Date.

                                       29

<PAGE>

                  "Net WAC Rate Carryover Reserve Account": The Net WAC Rate
Carryover Reserve Account established and maintained pursuant to Section 4.10.

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

                  "NIMS Insurer": Any insurer that is guaranteeing certain
payments under notes secured by collateral which includes, among other things,
all or a portion of the Class CE Certificates, the Class P Certificates and/or
the Residual Certificates.

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

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

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

                  "Notional Amount": With respect to the Class CE Interest and
any Distribution Date, the Uncertificated Balances of the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP), immediately prior to such
Distribution Date.

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

                  "Offered Certificate": Any one of the Class A Certificates and
the Mezzanine Certificates, issued under this Agreement.

                  "One-Month LIBOR": With respect to the Adjustable-Rate
Certificates, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2,
REMIC I Regular Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8 and
REMIC I Regular Interest I-LTM9 and any Interest Accrual Period therefor, the
rate determined by the

                                       30

<PAGE>

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

                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master Servicer
acceptable to the Trustee, if such opinion is delivered to the Trustee,
acceptable to the NIMS Insurer, if such opinion is delivered to the NIMS
Insurer, except that any opinion of counsel relating to (a) the qualification of
any Trust REMIC as a REMIC or (b) compliance with the REMIC Provisions must be
an opinion of Independent counsel.

                  "Optional Termination Date": The first Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to an amount less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.

                  "Originators": Ameriquest Mortgage Company and Town & Country
Credit Corporation.

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Target
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date (calculated for this purpose only,
after assuming that 100% of the Principal Remittance Amount on such Distribution
Date has been distributed).

                  "Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date and (b) the Net Monthly Excess Cashflow for such
Distribution Date.

                  "Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Principal Remittance Amount.

                                       31

<PAGE>

                  "Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, 1.45% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
2.90% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (y) $1,500,031, or (iii) on or after the Stepdown Date and if a
Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date.

                  "Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties immediately following such Distribution Date
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period), over (b) the sum of
the aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates as of such Distribution Date
(after giving effect to distributions to be made on such Distribution Date).

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

                  "Pass-Through Rate": With respect to any Class of
Adjustable-Rate Certificates and any Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution Date and (y) the Net WAC Pass-Through
Rate for such Distribution Date. For federal income tax purposes, the
Pass-Through Rate for the Adjustable-Rate Certificates will be calculated
without respect to any Cap Contract Excess, which such amounts, if any, shall
have been paid in respect of Net WAC Rate Carryover Amounts and paid outside of
any REMIC created herein.

                  With respect to the Class CE Interest and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (O) below, and the denominator of which is the aggregate Uncertificated
Balance of REMIC I Regular Interests I-LTAA, I-LTA1, I-LTA2, I-LTA3, I-LTM1,
I-LTM2, I-LTM3, I-LTM4, I-LTM5, I-LTM6, I-LTM7, I-LTM8 and I-LTM9. For purposes
of calculating the Pass-Through Rate for the Class CE Interest, the numerator is
equal to the sum of the following components:

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

                  (B) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA1;

                                       32

<PAGE>

                  (C) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA2;

                  (D) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA3;

                  (E) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM1;

                  (F) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM2;

                  (G) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM3;

                  (H) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM4 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM4;

                  (I) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM5 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM5;

                  (J) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM6 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM6;

                  (K) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM7 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM7;

                  (L) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM8 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM8;

                  (M) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM9 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM9;

                                       33

<PAGE>

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

                  (O) 100% of the interest on REMIC I Regular Interest I-LTP.

         With respect to the Class CE Certificates, 100% of the interest
distributable to the Class CE Interest, expressed as a per annum rate.

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
or Notional Amount represented by such Certificate and the denominator of which
is the aggregate initial Certificate Principal Balance or Notional Amount of all
of the Certificates of such Class. The Class A Certificates and the Mezzanine
Certificates (other than the Class M-9 Certificates) are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof.
The Class M-9 Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $50,000 and
integral multiples of $1.00 in excess thereof. The Class P Certificates are
issuable only in minimum Percentage Interests corresponding to minimum initial
Certificate Principal Balances of $20 and integral multiples thereof. The Class
CE Certificates are issuable only in minimum Percentage Interests corresponding
to minimum initial Notional Amount of $10,000 and integral multiples of $1.00 in
excess thereof; provided, however, that a single Certificate of such Class of
Certificates may be issued having a Percentage Interest corresponding to the
remainder of the aggregate initial Certificate Principal Balance or Notional
Amount of such Class or to an otherwise authorized denomination for such Class
plus such remainder. With respect to any Residual Certificate, the undivided
percentage ownership in such Class evidenced by such Certificate, as set forth
on the face of such Certificate. The Residual Certificates are issuable in
Percentage Interests of 20% and multiples thereof.

                  "Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.

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

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

                  (ii) demand and time deposits in, certificates of deposit of,
         or bankers' acceptances (which shall each have an original maturity of
         not more than 90 days and, in the

                                       34

<PAGE>

         case of bankers' acceptances, shall in no event have an original
         maturity of more than 365 days or a remaining maturity of more than 30
         days) denominated in United States dollars and issued by, any
         Depository Institution;

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

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

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

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

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

provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.

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

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

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such

                                       35

<PAGE>

plans, accounts or arrangements are invested, that are subject to ERISA and
Section 4975 of the Code.

                  "Prepayment Assumption": As defined in the Prospectus
Supplement.

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

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto). The
Prepayment Charge Schedule shall set forth the following information with
respect to each Prepayment Charge:

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

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

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

                  (iv) the term of the related Prepayment Charge;

                  (v) the original Stated Principal Balance of the related
         Mortgage Loan; and

                  (vi) the Stated Principal Balance of the related Mortgage Loan
         as of the Cut-off Date.

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

                  "Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day of the calendar month in which such Distribution Date occurs and the
Determination Date of the calendar month in which such Distribution Date occurs,
an amount equal to interest (to the extent received) at the applicable Net
Mortgage Rate on the amount of such Principal Prepayment for the number of days
commencing on the first day of the calendar month in which such Distribution
Date occurs and ending on the last date through which interest is collected from
the related Mortgagor. The Master Servicer may withdraw such Prepayment Interest
Excess from the Collection Account in accordance with Section 3.05(a)(iv).

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related

                                       36

<PAGE>

Prepayment Period occurring between the first day of the related Prepayment
Period and the last day of the calendar month preceding the month in which such
Distribution Date occurs, an amount equal to interest at the applicable Net
Mortgage Rate on the amount of such Principal Prepayment for the number of days
commencing on the day after the last date on which interest is collected from
the related Mortgagor and ending on the last day of the calendar month preceding
such Distribution Date. The obligations of the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 4.03(e).

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the Determination Date in the calendar
month preceding the calendar month in which such Distribution Date occurs (or,
in the case of the first Distribution Date, commencing on September 1, 2004) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.

                  "Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
on the Mortgage Loans due during the related Due Period, to the extent received
prior to the related Determination Date or advanced prior to such Distribution
Date; (ii) the Stated Principal Balance of any Mortgage Loan that was purchased
during the related Prepayment Period pursuant to or as contemplated by Section
2.03, Section 3.16(a) or Section 9.01 and the amount of any shortfall deposited
in the Collection Account in connection with the substitution of a Deleted
Mortgage Loan pursuant to Section 2.03 during the related Prepayment Period;
(iii) the principal portion of all other unscheduled collections (including,
without limitation, Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, Subsequent Recoveries and REO Principal Amortization) received during
the related Prepayment Period on the Mortgage Loans, net of any portion thereof
that represents a recovery of principal for which an advance was made by the
Master Servicer pursuant to Section 4.03 in respect of a preceding Distribution
Date; and (iv) the amount of any Overcollateralization Increase Amount for such
Distribution Date; MINUS (v) the amount of any Overcollateralization Reduction
Amount for such Distribution Date. In no event will the Principal Distribution
Amount with respect to any Distribution Date be (x) less than zero or (y)
greater than the then outstanding aggregate Certificate Principal Balance of the
Class A and Mezzanine Certificates.

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

                  "Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts described in clauses (i) through (iii)
of the definition of Principal Distribution Amount.

                  "Prospectus Supplement": The Prospectus Supplement, dated
September 17, 2004, relating to the public offering of the Offered Certificates
(other than the Class M-9 Certificates).

                  "PTCE":  A Prohibited Transaction Class Exemption.

                                       37

<PAGE>

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(a) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Master Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.01,
(iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing
Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.05(a)(v) and 3.16(a) and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer, the NIMS
Insurer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation, as well as any costs and damages incurred by the Trust Fund
in connection with any violation by such loan of any predatory or abusive
lending law.

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding Stated
Principal Balance, after application of all scheduled payments of principal and
interest due during or prior to the month of substitution, not in excess of the
Scheduled Principal Balance of the Deleted Mortgage Loan as of the Due Date in
the calendar month during which the substitution occurs, (ii) have a Mortgage
Rate not less than (and not more than one percentage point in excess of) the
Mortgage Rate of the Deleted Mortgage Loan, (iii) with respect to any
Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) with respect to any
Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) with respect to
Adjustable-Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin of
the Deleted Mortgage Loan, (vi) with respect to any Adjustable-Rate Mortgage
Loan, have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a risk grading determined by the Seller
at least equal to the risk grading assigned on the Deleted Mortgage Loan, (xi)
have been underwritten or reunderwritten by the Seller or an affiliate of the
Seller in accordance with the same underwriting criteria and guidelines as the
Deleted

                                       38

<PAGE>

Mortgage Loan, (xii) have a Prepayment Charge provision at least equal to the
Prepayment Charge provision of the Deleted Mortgage Loan, (xiii) not be more
than 59 or more days delinquent or any additional days delinquent than the
Deleted Mortgage Loan and (xiv) conform to each representation and warranty set
forth in Section 6 of the Mortgage Loan Purchase Agreement applicable to the
Deleted Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate Stated Principal
Balances, the Mortgage Rates described in clause (ii) hereof shall be determined
on the basis of weighted average Mortgage Rates, the terms described in clause
(vii) hereof shall be determined on the basis of weighted average remaining
terms to maturity, the Loan- to-Value Ratios described in clause (ix) hereof
shall be satisfied as to each such mortgage loan, the risk gradings described in
clause (x) hereof shall be satisfied as to each such mortgage loan and, except
to the extent otherwise provided in this sentence, the representations and
warranties described in clause (xi) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.

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

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid Principal Balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the calendar
month in which such Final Recovery Determination was made, net of amounts that
are payable therefrom to the Master Servicer with respect to such Mortgage Loan
pursuant to Section 3.05(a)(ii). If the Master Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of Realized Losses with
respect to that Mortgage Loan will be reduced to the extent such recoveries are
applied to principal distributions on any Distribution Date.

                  With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid Stated Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date

                                       39

<PAGE>

during such calendar month, plus (iii) REO Imputed Interest for such REO
Property for each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month in which such
Final Recovery Determination was made, plus (iv) any amounts previously
withdrawn from the Collection Account in respect of the related Mortgage Loan
pursuant to Section 3.05(a)(v) and Section 3.12(c), minus (v) the aggregate of
all Advances made by the Master Servicer in respect of such REO Property or the
related Mortgage Loan for which the Master Servicer has been or, in connection
with such Final Recovery Determination, shall be reimbursed pursuant to Section
3.13 out of rental income, Insurance Proceeds and Liquidation Proceeds received
in respect of such REO Property, minus (vi) the total of all net rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property that has been, or in connection with such Final Recovery Determination,
shall be transferred to the Distribution Account pursuant to Section 3.13.

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

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

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

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

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

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

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

                                       40

<PAGE>

                  "Relief Act": The Servicemembers Civil Relief Act or any
applicable state law providing similar relief.

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

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

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

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

                  "REMIC I Overcollateralization Target Amount": 1.00% of the
Overcollateralization Target Amount.

                  "REMIC I Overcollateralized Amount": With respect to any date
of determination, (i) 1.00% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2,
REMIC I Regular Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest

                                       41

<PAGE>

I-LTM7, REMIC I Regular Interest I-LTM8 and REMIC I Regular Interest I-LTM9, in
each case as of such date of determination.

                  "REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) one minus a fraction, the numerator of which is two times
the aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I
Regular Interest I- LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8 and REMIC I Regular Interest I-LTM9 and the
denominator of which is the aggregate of the Uncertificated Balances of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9 and REMIC I Regular Interest I-LTZZ.

                  "REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
following is a list of each of the REMIC I Regular Interests: REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTZZ, REMIC I Regular
Interest I-LTP.

                  "REMIC I Remittance Rate": With respect to each REMIC I
Regular Interest, the weighted average of the Expense Adjusted Net Mortgage
Rates of the Mortgage Loans.

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

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

                  "REMIC III": The segregated pool of assets consisting of the
Class CE Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R-X Certificates (in respect
of the Class R-III Interest), pursuant to Section 2.07, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

                                       42

<PAGE>

                  "REMIC IV": The segregated pool of assets consisting of the
Class P Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R-X Certificate (in respect of
the Class R-IV Interest), pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.

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

                  "REMIC Regular Interest": Any REMIC I Regular Interest, REMIC
II Regular Interest, Class CE Interest or Class P Interest.

                  "REMIC Remittance Rate": The REMIC I Remittance Rate.

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

                  "Representative": J.P. Morgan Securities Inc.

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

                  "REO Account": Each of the accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.13, which account
may be the Collection Account subject to Section 3.13.

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

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

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.13(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii)

                                       43

<PAGE>

payable or reimbursable to the Master Servicer pursuant to Section 3.13(d) for
unpaid Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property
for such calendar month.

                  "REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.13.

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

                  "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month U.S. dollar lending rate which New
York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.

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

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

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

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

                  "Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding Stated Principal Balance of
such Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after

                                       44

<PAGE>

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

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

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

                  "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.04(d),
Section 3.08, Section 3.12 and Section 3.13. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

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

                                       45

<PAGE>

                  "Servicing Fee Rate": 0.50% per annum.

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

                  "Servicing Standard": The standards set forth in the first
paragraph of Section 3.01.

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

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

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

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer and distributed pursuant to Section 4.01 on
or before such date of determination, (ii) all Principal Prepayments received
after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.12, to the extent distributed pursuant to
Section 4.01 on or before such date of determination and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation made during
or prior to the Prepayment Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 on or before

                                       46

<PAGE>

such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

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

                  "Stepdown Date": The earlier to occur of (i) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero and (ii) the later to occur of (a)
the Distribution Date occurring in October 2007 and (b) the first Distribution
Date on which the Credit Enhancement Percentage for the Class A Certificates
(calculated for this purpose only after taking into account distributions of
principal on the Mortgage Loans but prior to any distribution of the Principal
Distribution Amount to the Certificates then entitled to distributions of
principal on such Distribution Date) is equal to or greater than 33.00%.

                  "Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 6.06.

                  "Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 6.11 and is
otherwise acceptable to the Master Servicer.

                  "Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 6.06.

                  "Subsequent Recoveries": As of any Distribution Date,
unexpected amounts received by the Master Servicer (net of any related expenses
permitted to be reimbursed pursuant to Section 3.04) specifically related to a
Mortgage Loan that was the subject of a liquidation or an REO Disposition prior
to the related Prepayment Period that resulted in a Realized Loss.

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

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

                                       47

<PAGE>

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

                  "Termination Price":  As defined in Section 9.01.

                  "Terminator":  As defined in Section 9.01.

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

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

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

                  "Trigger Event": A Trigger Event is in effect with respect to
a Distribution Date on and after the Stepdown Date if:

                  (a) the Delinquency Percentage for the Mortgage Loans exceeds
the applicable percentages of the Credit Enhancement Percentage for the prior
Distribution Date as set forth below for the most senior Class of Certificates
then outstanding:

       CLASS                 PERCENTAGE
-------------------------------------------------
         A                     45.00%
        M-1                    58.25%
        M-2                    80.70%
        M-3                    91.65%
        M-4                    128.00%
        M-5                    153.00%
        M-6                    187.95%
        M-7                    228.45%
        M-8                    337.50%
        M-9                    512.05%

or

                  (b) the Cumulative Loss Percentage exceeds the applicable
percentages set forth below with respect to such Distribution Date:

    DISTRIBUTION DATE OCCURRING IN              PERCENTAGE
--------------------------------------------------------------------
October 2007 through September 2008                4.00%
October 2008 through September 2009                5.25%
October 2009 through September 2010                6.25%
October 2010 and thereafter                        6.75%

                  "Trust": The express trust created hereunder in Section 2.01.

                                       48

<PAGE>

                  "Trust Fund": Collectively, all of the assets of each Trust
REMIC, Master Servicer Prepayment Charge Payment Amounts and the Net WAC Rate
Carryover Reserve Account (including any payments made under the Cap Contracts
deposited therein).

                  "Trust REMIC": Each of REMIC I, REMIC II., REMIC III and REMIC
IV.

                  "Trustee": Deutsche Bank National Trust Company, a national
banking association, or its successor in interest, or any successor Trustee
appointed as herein provided.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it and in the exercise and performance of any of the powers and
duties of the Trustee hereunder, which amount shall equal the Trustee Fee Rate
accrued for one month multiplied by the sum of the aggregate Scheduled Principal
Balance of the Mortgage Loans and any REO Properties as of the second preceding
Due Date (or, in the case of the initial Distribution Date, as of the Cut-off
Date), calculated on the basis of a 360-day year consisting of twelve 30-day
months.

                  "Trustee Fee Rate": 0.0084% per annum.

                  "Uncertificated Balance": The amount of any REMIC Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC Regular Interest shall equal the amount
set forth in the Preliminary Statement hereto as its initial uncertificated
balance. On each Distribution Date, the Uncertificated Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.01 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.04. The
Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be increased by
interest deferrals as provided in Section 4.01(a)(1). The Uncertificated Balance
of each REMIC I Regular Interest shall never be less than zero. With respect to
the Class CE Interest, as of any date of determination, an amount equal to the
excess, if any, of (A) the then aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests over (B) the then aggregate Certificate Principal
Balances of the Class A Certificates, Mezzanine Certificates and the Class P
Interest then outstanding.

                  "Uncertificated Interest": With respect to any REMIC Regular
Interest for any Distribution Date, one month's interest at the REMIC Remittance
Rate applicable to such REMIC Regular Interest for such Distribution Date,
accrued on the Uncertificated Balance or Uncertificated Notional Amount thereof
immediately prior to such Distribution Date. Uncertificated Interest in respect
of any REMIC Regular Interest shall accrue on the basis of a 360-day year
consisting of twelve 30-day months. Uncertificated Interest with respect to each
Distribution Date, as to any REMIC Regular Interest, shall be reduced by an
amount equal to the sum of (a) the aggregate Prepayment Interest Shortfall, if
any, for such Distribution Date to the extent not covered by payments pursuant
to Section 4.03(e) and (b) the aggregate amount of any Relief Act Interest
Shortfall, if any allocated, in each case, to such REMIC Regular Interest
pursuant to Section 1.02. In addition, Uncertificated Interest with respect to
each Distribution Date, as to any REMIC Regular

                                       49

<PAGE>

Interest shall be reduced by Realized Losses, if any, allocated to such REMIC
Regular Interest pursuant to Section 1.02 and Section 4.04.

                  "Underwriters": J.P. Morgan Securities Inc. and Greenwich
Capital Markets, Inc..

                  "Underwriters' Exemption": Individual exemptions issued by the
United States Department of Labor, as Prohibited Transaction Exemption ("PTE")
89-90 at 54 Fed. Reg. 42581 and amended on July 21, 1997 as PTE 97-34 at 62 F.
R. 39021 and further amended on November 13, 2000 by PTE 2000-58 at 65 Fed. Reg.
67765 and on August 22, 2002 by PTE 2002-41 at 67 Fed. Reg. 54487, to J.P.
Morgan Securities Inc., for specific offerings in which J.P. Morgan Securities
Inc., or any person directly or indirectly, through one or more intermediaries,
controlling, controlled by or under common control with J.P. Morgan Securities
Inc., is an underwriter, placement agent or a manager or co-manager of the
underwriting syndicate or selling group where the trust and the offered
certificates meet specified conditions.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.08.

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations); provided that, solely for purposes of the restrictions on the
transfer of Residual Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are required by the applicable operative
agreement to be United States Persons, or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.

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

                                       50

<PAGE>

of 1989 or, subject to the applicable Originator's underwriting guidelines, an
insured automated valuation model.

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

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

                  For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, the aggregate amount of any Prepayment Interest Shortfalls
(to the extent not covered by payments by the Master Servicer pursuant to
Section 4.03(e)) and any Relief Act Interest Shortfall incurred in respect of
the Mortgage Loans for any Distribution Date shall be allocated first, to reduce
the interest accrued on the Class CE Certificates to the extent of one month's
interest at the applicable Pass-Through Rate on the Notional Amount of such
Certificate and thereafter, among the Class A Certificates and the Mezzanine
Certificates on a PRO RATA basis based on, and to the extent of, one month's
interest at the then applicable respective Pass- Through Rate on the respective
Certificate Principal Balance of each such Certificate.

                  For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 4.03(e)) and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC I Regular
Interest I-LTZZ, PRO RATA, based on, and to the extent of, one month's interest
at the then applicable respective REMIC I Remittance Rate on the respective
Uncertificated Balance of each such REMIC I Regular Interest.

                  SECTION 1.03 Rights of the NIMS Insurer.

                  Each of the rights of the NIMS Insurer set forth in this
Agreement shall exist so long as (i) the NIMS Insurer has undertaken to
guarantee certain payments of notes issued pursuant to an Indenture and (ii) any
series of notes issued pursuant to one or more Indentures remain outstanding or
the NIMS Insurer is owed amounts in respect of its guarantee of payment on such
notes; provided,

                                       51

<PAGE>

however, the NIMS Insurer shall not have any rights hereunder (except pursuant
to Section 11.01 in the case of clause (ii) below) during the period of time, if
any, that (i) the NIMS Insurer has not undertaken to guarantee certain payments
of notes issued pursuant to the Indenture or (ii) any default has occurred and
is continuing under the insurance policy issued by the NIMS Insurer with respect
to such notes.

                                       52

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement, all other assets included or to be included in
REMIC I (including any payments made under the Cap Contracts). Such assignment
includes all interest and principal received by the Depositor or the Master
Servicer on or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the Cut-off
Date). The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement and the Trustee, on behalf of the
Certificateholders, acknowledges receipt of the same.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee the following documents or
instruments with respect to each Mortgage Loan so transferred and assigned the
following documents or instruments (a "Mortgage File"):

                  (i) the original Mortgage Note, endorsed in blank, without
         recourse, or in the following form: "Pay to the order of Deutsche Bank
         National Trust Company, as Trustee under the applicable agreement,
         without recourse," with all prior and intervening endorsements showing
         a complete chain of endorsement from the originator to the Person so
         endorsing to the Trustee, or with respect to any lost Mortgage Note, an
         original Lost Note Affidavit; provided however, that such substitutions
         of Lost Note Affidavits for original Mortgage Notes may occur only with
         respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance
         of which is less than or equal to 2.00% of the Pool Balance as of the
         Cut- off Date;

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

                  (iii) an original Assignment assigned in blank, without
         recourse;

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

                                       53

<PAGE>

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

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

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

                  The Master Servicer (in its capacity as Seller) shall promptly
(and in no event later than thirty (30) Business Days, subject to extension upon
a mutual agreement between the Master Servicer and the Trustee, following the
later of (i) the Closing Date, (ii) the date on which the Seller receives the
Assignment from the Custodian and (iii) the date of receipt by the Master
Servicer of the recording information for a Mortgage) submit or cause to be
submitted for recording, at no expense to the Trust Fund or the Trustee, in the
appropriate public office for real property records, each Assignment referred to
in Sections 2.01(iii) and (iv) above and shall execute each original Assignment
referred to in section 2.01(iii) above in the following form: "Deutsche Bank
National Trust Company, as Trustee under the applicable agreement." In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Master Servicer (in its capacity as Seller) shall promptly prepare
or cause to be prepared a substitute Assignment or cure or cause to be cured
such defect, as the case may be, and thereafter cause each such Assignment to be
duly recorded.

                  Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments of Mortgage shall not be required to be submitted for recording
(except with respect to any Mortgage Loan located in

                                       54

<PAGE>

Maryland) unless such failure to record would result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates;
provided further, however, each Assignment of Mortgage shall be submitted for
recording by the Seller in the manner described above, at no expense to the
Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights or the NIMS Insurer, (ii) failure of the Master Servicer Termination
Test, (iii) the occurrence of a bankruptcy or insolvency relating to the Seller,
(iv) the occurrence of a servicing transfer as described in Section 7.02 hereof
and (v) if the Seller is not the Master Servicer and with respect to any one
assignment or Mortgage, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Master Servicer is unable to pay the cost
of recording the Assignments of Mortgage, such expense will be paid by the
Trustee and shall be reimbursable to the Trustee as an Extraordinary Trust Fund
Expense.

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

                  The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") and Deutsche Bank National Trust Company is hereby appointed
as Trustee in accordance with the provisions of this Agreement. The parties
hereto acknowledge and agree that it is the policy and intention of the Trust to
acquire only Mortgage Loans meeting the requirements set forth in this
Agreement.

                  The parties hereto understand and agree that it is not
intended that any mortgage loan be included in the Trust that is a "High-Cost
Home Loan" as defined by HOEPA or any other applicable predatory or abusive
lending laws.

                  SECTION 2.02. Acceptance of REMIC I by the Trustee.

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

                                       55

<PAGE>

                  On or prior to the Closing Date, the Trustee agrees, for the
benefit of the Certificateholders, to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor and the NIMS Insurer an
acknowledgment of receipt of the Mortgage Note (with any exceptions noted),
substantially in the form attached as Exhibit C-3 hereto.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review (or cause a Custodian on its behalf to review) each Mortgage Note
within 45 days of the Closing Date and to certify in substantially the form
attached hereto as Exhibit C-1 (or cause the Custodian to certify in the form of
the Initial Certification attached to the Custodial Agreement) that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(v)) required to be delivered to it pursuant to this
Agreement are in its possession, (ii) such documents have been reviewed by it or
such Custodian and are not mutilated, torn or defaced unless initialed by the
related borrower and relate to such Mortgage Loan, (iii) based on its or the
Custodian's examination and only as to the foregoing, the information set forth
in the Mortgage Loan Schedule that corresponds to items (1) through (3), (6),
(9), (10), (13), (15) and (19) of the definition of "Mortgage Loan Schedule"
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trustee or such Custodian was
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face or (ii) to determine whether any Mortgage File should
include any of the documents specified in clause (v) of Section 2.01.

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the Master Servicer and the NIMS Insurer
a final certification in the form annexed hereto as Exhibit C-2 (or shall cause
the Custodian to deliver to the Trustee, the Depositor, the Master Servicer and
the NIMS Insurer a final certification in the form attached to the Custodial
Agreement) evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon, with respect to all of the Mortgage Loans.
Upon the request of the Master Servicer, any exception report related to the
final certification shall be provided in an electronic computer readable format
as mutually agreed upon by the Master Servicer and the Trustee.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee or any Custodian finds any document or documents constituting a part of
a Mortgage File to be missing, mutilated, torn or defaced or does not conform to
the requirements identified above, at the conclusion of its review the Trustee
(or a Custodian on behalf of the Trustee) shall so notify the Depositor, the
NIMS Insurer and the Master Servicer. In addition, upon the discovery by the
Depositor, the NIMS Insurer, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made by the Seller in the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan which materially
adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.

                                       56

<PAGE>

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

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

                  (a) Upon discovery or receipt of notice (including notice
under Section 2.02) of any materially defective document in, or that a document
is missing from, the Mortgage File or of the breach by the Seller of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders, the
Trustee shall promptly notify the Seller, the NIMS Insurer and the Master
Servicer of such defect, missing document or breach and request that the Seller
deliver such missing document or cure such defect or breach within 90 days from
the date the Seller had knowledge or was notified of such missing document,
defect or breach, and if the Seller does not deliver such missing document or
cure such defect or breach in all material respects during such period, the
Master Servicer (or, in accordance with Section 6.06(b), the Trustee) shall
enforce the obligations of the Seller under the Mortgage Loan Purchase Agreement
to repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90
days after the date on which the Seller was notified (subject to Section
2.03(d)) of such missing document, defect or breach, if and to the extent that
the Seller is obligated to do so under the Mortgage Loan Purchase Agreement. The
Purchase Price for the repurchased Mortgage Loan shall be deposited in the
Collection Account, and the Trustee, upon receipt of written certification from
the Master Servicer of such deposit, shall release to the Seller the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Seller shall furnish to it and
as shall be necessary to vest in the Seller any Mortgage Loan released pursuant
hereto, and the Trustee shall not have any further responsibility with regard to
such Mortgage File. In lieu of repurchasing any such Mortgage Loan as provided
above, if so provided in the Mortgage Loan Purchase Agreement, the Seller may
cause such Mortgage Loan to be removed from REMIC I (in which case it shall
become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans in the manner and subject to the limitations set forth in Section
2.03(c). It is understood and agreed that the obligation of the Seller to cure
or to repurchase (or to substitute for) any Mortgage Loan as to which a document
is missing, a material defect in a document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.

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

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

                                       57

<PAGE>

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

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

                  (iii) If with respect to any Prepayment Period,

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

                  (B) 5% of the total dollar amount of Prepayment Charges
         payable by Mortgagors in connection with Principal Prepayments on the
         related Mortgage Loans that occurred during such Prepayment Period,

then the amount required to be paid by the Master Servicer pursuant to Section
2.03(b)(ii)(B) above shall be limited to an amount, that when added to the
amount of Prepayment Charges actually collected by the Master Servicer in
respect of Prepayment Charges relating to Principal Prepayments on the related
Mortgage Loans that occurred during such Prepayment Period, will yield a sum
equal to 95% of the total dollar amount of Prepayment Charges (exclusive of (A)
Prepayment Charges not enforced or collected upon because (i) the enforceability
thereof shall have been limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally or
(ii) the collectability thereof shall have been limited due to acceleration in
connection with a foreclosure or other involuntary payment and (B) Prepayment
Charges waived by the Master Servicer when such waiver does not breach the
covenant set forth in Section 2.05(viii)) payable by Mortgagors in connection
with Principal Prepayments on the related Mortgage Loans that occurred during
such Prepayment Period.

                  (c) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a), in the case of the
Seller, or Section 2.03(b), in

                                       58

<PAGE>

the case of the Depositor, must be effected prior to the date which is two years
after the Startup Day for REMIC I.

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

                  For any month in which the Depositor or the Seller substitutes
one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Master Servicer shall determine the amount (the "Substitution
Shortfall Amount"), if any, by which the aggregate Purchase Price of all such
Deleted Mortgage Loans exceeds the aggregate of, as to each such Qualified
Substitute Mortgage Loan, the Scheduled Principal Balance thereof as of the date
of substitution, together with one month's interest on such Scheduled Principal
Balance at the applicable Net Mortgage Rate. On the date of such substitution,
the Depositor or the Seller, as the case may be, shall deliver or cause to be
delivered to the Master Servicer for deposit in the Collection Account an amount
equal to the Substitution Shortfall Amount, if any, and the Trustee, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans and
certification by the Master Servicer of such

                                       59

<PAGE>

deposit, shall release to the Depositor or the Seller, as the case may be, the
related Mortgage File or Files execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Depositor or the Seller, as
the case may be, shall deliver to it and as shall be necessary to vest therein
any Deleted Mortgage Loan released pursuant hereto.

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

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

                  SECTION 2.04. [Reserved].

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

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

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

                  (ii) The Master Servicer has the full corporate power and
         authority to service each Mortgage Loan, and to execute, deliver and
         perform, and to enter into and consummate the transactions contemplated
         by this Agreement and has duly authorized by all necessary

                                       60

<PAGE>

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

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

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

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

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

                  (vii) The information set forth in the Prepayment Charge
         Schedule attached hereto as Schedule 2 (including the prepayment charge
         summary attached thereto) is complete, true

                                       61

<PAGE>

         and correct in all material respects at the date or dates respecting
         which such information is furnished and each Prepayment Charge is
         permissible and enforceable in accordance with its terms (except to the
         extent that (i) the enforceability thereof may be limited by
         bankruptcy, insolvency, moratorium, receivership and other similar laws
         relating to creditors' rights generally and (ii) the collectability
         thereof may be limited due to acceleration in connection with a
         foreclosure or other involuntary payment;

                  (viii) The Master Servicer shall not waive any Prepayment
         Charge or part of a Prepayment Charge unless, (i) the enforceability
         thereof shall have been limited by bankruptcy, insolvency, moratorium,
         receivership and other similar laws relating to creditors' rights
         generally or (ii) the collectability thereof shall have been limited
         due to acceleration in connection with a foreclosure or other
         involuntary payment or (iii) in the Master Servicer's reasonable
         judgment as described in Section 3.01 hereof, (x) such waiver relates
         to a default or a reasonably foreseeable default, (y) such waiver would
         maximize recovery of total proceeds taking into account the value of
         such Prepayment Charge and related Mortgage Loan and (z) doing so is
         standard and customary in servicing similar Mortgage Loans (including
         any waiver of a Prepayment Charge in connection with a refinancing of a
         Mortgage Loan that is related to a default or a reasonably foreseeable
         default). In no event shall the Master Servicer waive a Prepayment
         Charge in connection with a refinancing of a Mortgage Loan that is not
         related to a default or a reasonably foreseeable default;

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

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

                  (xi) The Master Servicer has fully furnished and will continue
         to fully furnish, in accordance with the Fair Credit Reporting Act and
         its implementing regulations, accurate and complete information (e.g.,
         favorable and unfavorable) on its borrower credit files to Equifax,
         Experian and Trans Union Credit Information Company or their successors
         on a monthly basis; and

                  (xii) The Master Servicer shall transmit full-file credit
         reporting data for each Mortgage Loan pursuant to Fannie Mae Guide
         Announcement 95-19 and for each Mortgage Loan, the Master Servicer
         shall report one of the following statuses each month as follows: new
         origination, current, delinquent (30-, 60-, 90-days, etc.), foreclosed,
         or charged-off.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee or to a Custodian, as the case may be, and
shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders. Upon discovery by any of the Depositor, the NIMS Insurer,
the Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests

                                       62

<PAGE>

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

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

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

                  SECTION 2.07. Conveyance of the REMIC I Regular Interests;
                                Acceptance of REMIC I, REMIC II, REMIC III and
                                REMIC IV by the Trustee; Issuance of Class R
                                Certificates and the Class R-X Certificates.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee, without recourse all the right, title and interest of the Depositor
in and to the assets described in the definition of REMIC I for the benefit of
the Class R Certificateholders (in respect of the Class R-I Interest) and the
holder of the REMIC I Regular Interests (which are uncertificated). The Trustee
acknowledges receipt of the assets described in the definition of REMIC I and
declares that it holds and shall hold the same in trust for the exclusive use
and benefit of the Class R Certificateholders (in respect of the Class R-I
Interest) and the holder of the REMIC I Regular Interests (which are
uncertificated). The interests evidenced by the Class R-I Interest, together
with the REMIC I Regular Interests, constitute the entire beneficial ownership
interest in REMIC I.

                                       63

<PAGE>

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC I Regular Interests (which are uncertificated) for the
benefit of the Holders of the REMIC II Regular Interests and the Class R
Certificates (in respect of the Class R-II Interest). The Trustee acknowledges
receipt of the REMIC I Regular Interests and declares that it holds and shall
hold the same in trust for the exclusive use and benefit of the Holders of the
REMIC II Regular Interests and the Class R Certificates (in respect of the Class
R-II Interest). The interests evidenced by the Class R-II Interest, together
with the Regular Certificates and the Class P Certificates), the Class CE
Interest and the Class P Interest, constitute the entire beneficial ownership
interest in REMIC II.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC II Regular Interests (which are uncertificated) for the
benefit of the Holders of the REMIC III Regular Interests and the Class R
Certificates (in respect of the Class R-III Interest). The Trustee acknowledges
receipt of the REMIC II Regular Interests and declares that it holds and shall
hold the same in trust for the exclusive use and benefit of the Holders of the
REMIC III Regular Interests and the Class R-X Certificates (in respect of the
Class R-III Interest). The interest evidenced by the Class R-III Interest and
the Class CE Certificates constitute the entire beneficial ownership interest in
REMIC III.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and tot he Class P Interest (which is uncertificated) for the benefit of the
Holders of the Class P Certificates and the Class R-X Certificates (in respect
of the Class R-IV Interest). The Trustee acknowledges receipt of the Class P
Interest and declares that it holds and shall hold the same in trust for the
exclusive use and benefit of the Holders of the Class P Certificates and the
Class R-X Certificates (in respect of the Class R-IV Interest). The interests
evidenced by the Class R-IV Interest, together with the Class P Certificates,
constitute the entire beneficial ownership interest in REMIC IV.

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

         The Trustee acknowledges the assignment to it of the Class CE Interest
and the Class P Interest and, concurrently therewith and in exchange therefor,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, the Trustee has executed, authenticated and delivered to or upon the
order of the Depositor, the Class R-X Certificates in authorized denominations.
The interests evidenced by the Class R-X Certificates, together with the Class
CE Certificates and the Class P Certificates, constitute the entire beneficial
ownership interest in REMIC III and REMIC IV.

                                       64

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the benefit
of the Certificateholders (as determined by the Master Servicer in its
reasonable judgment) in accordance with (i) the terms of the respective Mortgage
Loans and any insurance policies related thereto, (ii) all Applicable
Regulations, (iii) the terms of this Agreement, (iv) the Loss Mitigation Action
Plan, if applicable, and (v) to the extent consistent with the preceding
requirements, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of prudent mortgage lenders and loan servicers
administering similar mortgage loans but without regard to:

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

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

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

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

                  Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 6.06, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee, in accordance with the servicing
standards set forth above, (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, or of forbearance, or
of modification and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties, (ii) to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure to convert the ownership of
such properties, and to hold or cause to be held title to such properties, in
the name of the Trust Fund, on behalf of the Trustee and the Certificateholders,
(iii) to market, sell and transfer title of REO Properties held in the name of
the Trust Fund to third party purchasers upon terms and conditions the Master
Servicer deems reasonable under the Servicing Standard, (iv) to bring or respond
to civil actions or complaints (in its own name or that of the Trust Fund or the
Trustee on behalf of the Trust Fund) related to any Mortgage Loan, Mortgaged
Property or REO Property held by the Trust Fund

                                       65

<PAGE>

and (v) to execute any other document necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties hereunder
consistent with the Servicing Standard.

                  At the written request of the Master Servicer, the Trustee
shall execute and furnish to the Master Servicer such documents as are necessary
or appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder. By execution of this Agreement, the Trustee, on
behalf of the Trust Fund, hereby grants to the Master Servicer a power of
attorney to execute any and all documents necessary to carry out any and all
servicing duties described in this Agreement (including the taking of and
transferring title of REO Properties to third parties held in the name of the
Trustee for the benefit of the Trust) and expressly confirms that this paragraph
along with the face page and a copy of the signature page (duly executed) to
this Agreement shall constitute the power of attorney for evidentiary and/or
recording purposes. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.

                  Subject to Section 3.04(d) hereof, in accordance with the
Servicing Standard, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.04(d), and further as provided in Section
3.05(a). Any cost incurred by the Master Servicer or by Sub-Servicers in
effecting the timely payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.

                  Consistent with the terms of this Agreement, the Master
Servicer may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if such waiver, modification, postponement or
indulgence is in conformity with the Servicing Standard; provided, however,
that:

                  (A) the Master Servicer shall not make future advances (except
         as provided in Section 4.03);

                  (B) the Master Servicer shall not permit any modification with
         respect to any Mortgage Loan that would change the Mortgage Rate, defer
         or forgive the payment of any principal or interest payments, reduce
         the outstanding Stated Principal Balance (except for reductions
         resulting from actual payments of principal) or extend the final
         maturity date on such Mortgage Loan (unless as provided in Section
         3.02, (i) the Mortgagor is in default with respect to the Mortgage Loan
         or (ii) such default is, in the judgment of the Master Servicer,
         reasonably foreseeable); and

                  (C) the Master Servicer shall not consent to (i) partial
         releases of Mortgages, (ii) alterations, (iii) removal, demolition or
         division of properties subject to Mortgages, (iv) modification or (v)
         second mortgage subordination agreements with respect to any Mortgage
         Loan that would: (i) affect adversely the status of any Trust REMIC as
         a REMIC, (ii) cause any Trust REMIC to be subject to a tax on
         "prohibited transactions" or "contributions" pursuant to the REMIC
         Provisions, or (iii) both (x) effect an exchange or reissuance of such

                                       66

<PAGE>

         Mortgage Loan under Section 1001 of the Code (or Treasury regulations
         promulgated thereunder) and (y) cause any Trust REMIC constituting part
         of the Trust Fund to fail to qualify as a REMIC under the Code or the
         imposition of any tax on "prohibited transactions" or "contributions"
         after the Startup Day under the REMIC Provisions.

                  To the extent consistent with the terms of this Agreement,
including Section 2.03 and Section 2.05, the Master Servicer may waive (or
permit a Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Master
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement. All references to Master Servicer in this Agreement shall be deemed
to include any Sub-Servicer duly appointed by the Master Servicer pursuant to
this Agreement.

                  SECTION 3.02. Collection of Certain Mortgage Loan Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest, (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days or (iii) waive any provisions of any Mortgage Loan requiring the
related Mortgagor to submit to mandatory arbitration with respect to disputes
arising thereunder; provided that any extension pursuant to clause (ii) above
shall not affect the amortization schedule of any Mortgage Loan for purposes of
any computation hereunder. The NIMS Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage Loans as of the Cut-off Date. In the event of any
such arrangement pursuant to clause (ii) above, the Master Servicer shall make
timely advances on such Mortgage Loan during such extension pursuant to Section
4.03 and in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements.

                  Notwithstanding the foregoing, in the event that any Mortgage
Loan is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the Servicing
Standard, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness

                                       67

<PAGE>

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

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

                  SECTION 3.03. [Reserved].

                  SECTION 3.04. Collection Account, Escrow Account and
                                Distribution Account.

                  (a) Collection Account. On behalf of the Trust Fund, the
Master Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain in the name of the Trustee one
or more accounts (such account or accounts, the "Collection Account") in
accordance with this Section 3.04, held in trust for the benefit of the Trustee
and the Certificateholders.

                  (b) Deposits to the Collection Account. On behalf of the Trust
         Fund, the Master Servicer shall deposit or cause to be deposited in the
         clearing account (which account must be an Eligible Account) in which
         it customarily deposits payments and collections on mortgage loans in
         connection with its mortgage loan servicing activities on a daily
         basis, and in no event more than one Business Day after the Master
         Servicer's receipt thereof, and shall thereafter deposit in the
         Collection Account, in no event more than two Business Days after the
         deposit of such funds into the clearing account, as and when received
         or as otherwise required hereunder, and retain therein, the following
         payments and collections received or made by it subsequent to the
         Cut-off Date with respect to the Mortgage Loans, or payments (other
         than Principal Prepayments) received by it on or prior to the Cut-off
         Date but allocable to a Due Period subsequent thereto:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         and REO Properties adjusted to the Net Mortgage Rate;

                                       68

<PAGE>

                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
         than proceeds to be held in the Escrow Account and applied to the
         restoration or repair of the Mortgaged Property or released to the
         Mortgagor in accordance with the Servicing Standard), Subsequent
         Recoveries and any amounts received in respect of the rental of any REO
         Property prior to REO Disposition;

                  (iv) all proceeds related to the purchase, substitution or
         repurchase of any Mortgage Loan or REO Property in accordance with
         Section 2.03;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.09 in connection with the deductible
         clause in any blanket hazard insurance policy, such deposit being made
         from the Master Servicer's own funds, without reimbursement therefor;

                  (vi) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.06 in connection with any losses
         realized on Permitted Investments with respect to funds held in the
         Collection Account;

                  (vii) all amounts required to be deposited in connection with
         shortfalls in principal amount of Qualified Substitute Mortgage Loans
         pursuant to Section 2.03 (for purposes of this clause (vii), the
         Cut-off Date with respect to any Qualified Substitute Mortgage Loan
         shall be deemed to be the date of substitution);

                  (viii) any amounts required to be deposited by the Master
         Servicer pursuant to Section 4.03(b); and

                  (ix) all Prepayment Charges collected by the Master Servicer,
         all Prepayment Charges payable by the Master Servicer pursuant to
         Section 2.03(b)(ii)(A) and all Master Servicer Prepayment Charge
         Payment Amounts payable by the Master Servicer pursuant to Section
         2.03(b)(ii)(B) as limited by Section 2.03(b)(iii).

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

                  (c) Escrow Account. The Master Servicer shall segregate and
hold all funds collected and received pursuant to each Mortgage Loan which
constitute Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain in the name of the Trustee one
or more accounts (such account or accounts, the "Escrow Account") held in trust
for the benefit of the Certificateholders and the Trustee.

                                       69

<PAGE>

                  (d) Deposits to the Escrow Account. The Master Servicer shall
         deposit or cause to be deposited in the clearing account (which account
         must be an Eligible Account) in which it customarily deposits payments
         and collections on mortgage loans in connection with its mortgage loan
         servicing activities on a daily basis, and in no event more than one
         Business Day after the Master Servicer's receipt thereof, and shall
         thereafter deposit in the Escrow Account, in no event more than two
         Business Days after the deposit of such funds into the clearing
         account, as and when received or as otherwise required hereunder, and
         retain therein:

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

                  (ii) all Insurance Proceeds which are to be applied to the
         restoration or repair of any Mortgaged Property.

                  (e) Distribution Account. On behalf of the Trust Fund, the
         Trustee shall segregate and hold all funds collected and received
         pursuant to this Agreement separate and apart from any of its own funds
         and general assets and shall establish and maintain in the name of the
         Trust Fund one or more segregated accounts (such account or accounts,
         the "Distribution Account"), held in trust for the benefit of the
         Certificateholders.

                  (f) Trustee Deposits to the Distribution Account. Upon
         receipt, the Trustee shall deposit or cause to be deposited into the
         Distribution Account all payments of any nature received from the
         Master Servicer in accordance with this Agreement. The Trustee shall
         deposit in the Distribution Account any amounts required to be
         deposited pursuant to Section 3.06 in connection with losses realized
         on Permitted Investments with respect to funds held in the Distribution
         Account. Furthermore, promptly upon receipt of any Stayed Funds,
         whether from the Master Servicer, a trustee in bankruptcy, or federal
         bankruptcy court or other source, the Trustee shall deposit such funds
         in the Distribution Account, subject to withdrawal thereof pursuant to
         Section 7.02(b) or as otherwise permitted hereunder.

                  (g) Master Servicer Transfer of Funds to the Distribution
         Account. On behalf of the Trust Fund, the Master Servicer shall deliver
         to the Trustee in immediately available funds for deposit in the
         Distribution Account by 3:00 p.m. (New York time) on the Master
         Servicer Remittance Date, (i) that portion of Available Funds
         (calculated without regard to the references in clause (2) of the
         definition thereof to amounts that may be withdrawn from the
         Distribution Account) for the related Distribution Date then on deposit
         in the Collection Account, (ii) without duplication, the amount of all
         Prepayment Charges collected by the Master Servicer, all Prepayment
         Charges payable by the Master Servicer pursuant to Section
         2.03(b)(ii)(A) and all Master Servicer Prepayment Charge Payment
         Amounts payable by the Master Servicer pursuant to Section
         2.03(b)(ii)(B), subject to Section 2.03(b)(iii) (in each case to the
         extent not related to Principal Prepayments occurring after the related
         Prepayment Period) and (iii) any amounts reimbursable to an Advancing
         Person pursuant to Section 3.23 and the terms of the related Advance
         Facility.

                  In addition, the Master Servicer shall deliver to the Trustee
from time to time as required by this Agreement, for deposit and the Trustee
shall so deposit, in the Distribution Account:

                                       70

<PAGE>

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

                  (ii) any amounts required to be deposited pursuant to Section
         3.13 in connection with any REO Property;

                  (iii) any amounts to be paid in connection with a purchase of
         Mortgage Loans and REO Properties pursuant to Section 3.16 and Section
         9.01;

                  (iv) any Compensating Interest as required pursuant to Section
         4.03(e);

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

                  (vi) any amounts required to be paid by the Master Servicer
         pursuant to Section 3.06 in connection with any losses realized on
         Permitted Investments with respect to funds held in the Collection
         Account; and

                  (vii) any amounts required to be paid to the Trustee from the
         assets of the Trust Fund on deposit in the Collection Account pursuant
         to this Agreement, including but not limited to amounts required to be
         paid to the Trustee pursuant to Section 7.02 and Section 8.05.

                  Funds held in the Collection Account pursuant to Section
3.04(b) may at any time be delivered by the Master Servicer to the Trustee for
deposit into the Distribution Account and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account until the Business Day
prior to the Distribution Date; provided, however, that the Trustee shall have
the sole authority to withdraw any funds held pursuant to this paragraph. In the
event the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account any amount not required to be deposited therein, it may at
any time request that the Trustee withdraw such amount from the Distribution
Account and remit to it any such amount, any provision herein to the contrary
notwithstanding.

                  (h) Investment of Account Funds. Funds on deposit in the
Collection Account, the Distribution Account, any REO Account and any Escrow
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.06. Any investment earnings or interest paid
on funds deposited in the Collection Account, any REO Account and any Escrow
Account (subject to Section 3.05(b)) shall accrue to the benefit of the Master
Servicer and the Master Servicer shall be entitled to retain and withdraw such
interest from each such account on a daily basis. Any investment earnings or
interest paid on funds deposited in the Distribution Account, shall accrue to
the benefit of the Trustee and the Trustee shall be entitled to retain and
withdraw such interest from each such account on a daily basis.

                  Funds on deposit in the Net WAC Rate Carryover Reserve Account
may be invested in Permitted Investments in accordance with Section 3.06,
subject to any limitations set forth in Section 4.10 and any investment earnings
or interest paid shall accrue to the benefit of the party designated in such
section.

                                       71

<PAGE>

                  (i) Creation, Location and Subsequent Transfers of Accounts.
Each account created pursuant to this Agreement must be an Eligible Account. On
or prior to the Closing Date, the Master Servicer and the Trustee shall give
notice, to each other, the NIMS Insurer and the Depositor of the location of any
account created by it pursuant to this Agreement. From time to time, the Master
Servicer and the Trustee may each transfer any account created by it to a
different depository institution provided that upon such transfer the written
notice is provided to all other parties listed in the preceding sentence.

                  (j) In order to comply with its duties under the U.S.A.
Patriot Act of 2001, the Trustee shall obtain and verify certain information and
documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address, and other identifying information.

                  SECTION 3.05. Permitted Withdrawals From the Collection
                                Account, Escrow Account and Distribution
                                Account.

                  (a) Collection Account. The Master Servicer may, from time to
         time, withdraw from the Collection Account for the following purposes
         or as described in Section 4.03:

                  (i) to remit to the Trustee for deposit in the Distribution
         Account the amounts required to be so remitted pursuant to Section
         3.04(g) or permitted to be so remitted pursuant to the last paragraph
         of Section 3.04(g);

                  (ii) subject to Section 3.12(c), to reimburse itself for (a)
         any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances and
         (c) any unreimbursed Advances, the Master Servicer's right to reimburse
         itself pursuant to this subclause (ii) being limited to any Late
         Collections, Liquidation Proceeds, Subsequent Recoveries and Insurance
         Proceeds received on the related Mortgage Loan and any amounts received
         in respect of the rental of the related REO Property prior to an REO
         Disposition that represent payments of principal and/or interest
         respecting which any such advance was made;

                  (iii) to reimburse itself for (a) any unpaid Servicing Fees to
         the extent not recoverable under Section 3.05(a)(ii) and (b) any unpaid
         Advances or Servicing Advances that have been deemed Nonrecoverable
         Advances or Nonrecoverable Servicing Advances;

                  (iv) to pay to itself any Prepayment Interest Excess;

                  (v) to reimburse itself for any amounts paid pursuant to
         Section 3.12(b) (and not otherwise previously reimbursed);

                  (vi) to pay to itself as servicing compensation any interest
         earned on funds in the Collection Account;

                  (vii) subject to Section 4.03(b), to reimburse the Master
         Servicer in respect of any unreimbursed Advances to the extent of funds
         held in the Collection Account for future distribution that were not
         included in Available Funds for the preceding Distribution Date;

                                       72

<PAGE>

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

                  (ix) to remit to the Trustee any amounts that the Trustee is
         permitted to be paid or reimbursed from the assets of the Trust Fund
         pursuant to the terms of this Agreement, including the terms of Section
         7.02(a) and Section 8.05 of this Agreement;

                  (x) to reimburse the NIMS Insurer, the Master Servicer (if the
         Master Servicer is not an Affiliate of the Seller) or the Trustee, as
         the case may be, for enforcement expenses reasonably incurred in
         respect of the breach or defect giving rise to the purchase obligation
         under Section 2.03 of this Agreement that were included in the Purchase
         Price of the Mortgage Loan, including any expenses arising out of the
         enforcement of the purchase obligation;

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

                  (xii) to transfer funds in the Collection Account maintained
         at a particular depository to the Collection Account maintained at a
         different depository, pursuant to Section 3.04(i);

                  (xiii) [Reserved];

                  (xiv) [Reserved]; and

                  (xv) to clear and terminate the Collection Account upon the
         termination of this Agreement.

                  On each Business Day as of the commencement of which the
balance on deposit in the Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess
shall be remitted to the Trustee, but only if the Collection Account constitutes
an Eligible Account solely pursuant to clause (ii) of the definition of
"Eligible Account." If the balance on deposit in the Collection Account exceeds
$75,000 as of the commencement of business on any Business Day and the
Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account," the Master Servicer shall, on or
before 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Depositor,
the Master Servicer, the Trustee or any Sub-Servicer pursuant to Section 3.05
and shall pay such amounts to the Persons entitled thereto.

                  The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Collection Account any amount not

                                       73

<PAGE>

required to be deposited therein, it may at any time withdraw such amount from
the Collection Account, any provision herein to the contrary notwithstanding.

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

                  (b) Escrow Account. The Master Servicer may, from time to
         time, withdraw from the Escrow Account for the following purposes:

                  (i) to effect payments of ground rents, taxes, assessments,
         water rates, hazard insurance premiums and comparable items;

                  (ii) to reimburse the Master Servicer for any Servicing
         Advance made by the Master Servicer with respect to a related Mortgage
         Loan but only from amounts received on the related Mortgage Loan which
         represent late payments or Late Collections of Escrow Payments
         thereunder;

                  (iii) to refund to the Mortgagor any funds as may be
         determined to be overages;

                  (iv) for transfer to the Collection Account in accordance with
         the terms of this Agreement;

                  (v) for application to restoration or repair of the Mortgaged
         Property;

                  (vi) to pay to the Master Servicer, or to the Mortgagor to the
         extent required by the related Mortgage Loan or Applicable Regulations,
         any interest paid on the funds deposited in the Escrow Account;

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

                  (viii) to transfer to the Collection Account any Insurance
         Proceeds.

                  In the event the Master Servicer shall deposit in an Escrow
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from such Escrow Account, any provision herein to the
contrary notwithstanding. As part of its servicing duties, the Master Servicer
shall pay to the Mortgagor interest on funds in the Escrow Account, to the
extent required by the related Mortgage Loan or Applicable Regulations, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.
The Master Servicer may pay to itself any excess interest on funds in the Escrow
Account, to the extent such action is in conformity with the Servicing Standard,

                                       74

<PAGE>

is permitted by law and such amounts are not required to be paid to Mortgagors
or used for any of the other purposes set forth above.

                  (c) Distribution Account. The Trustee shall, from time to
         time, make withdrawals from the Distribution Account, for any of the
         following purposes:

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

                  (ii) to pay to itself amounts to which it is entitled pursuant
         to Section 8.05;

                  (iii) to pay itself any interest income earned on funds
         deposited in the Distribution Account pursuant to Section 3.06;

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

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

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

                  SECTION 3.06. Investment of Funds in the Collection Account,
                                the Escrow Account, the REO Account and the
                                Distribution Account.

                  (a) The Master Servicer may direct any depository institution
         maintaining the Collection Account, the Escrow Account (subject to
         Section 3.05(b)), and the REO Account and the Trustee may direct any
         depository institution maintaining the Distribution Account (for
         purposes of this Section 3.06, each an "Investment Account"), to invest
         the funds in such Investment Account in one or more Permitted
         Investments bearing interest or sold at a discount, and maturing,
         unless payable on demand, (i) no later than the Business Day
         immediately preceding the date on which such funds are required to be
         withdrawn from such account pursuant to this Agreement, if a Person
         other than the Trustee is the obligor thereon, and (ii) no later than
         the date on which such funds are required to be withdrawn from such
         Investment Account pursuant to this Agreement, if the Trustee is the
         obligor thereon. All such Permitted Investments shall be held to
         maturity, unless payable on demand. Any investment of funds in an
         Investment Account shall be made in the name of the Trustee (in its
         capacity as such) or in the name of a nominee of the Trustee. The
         Trustee shall be entitled to sole possession (except with respect to
         investment direction of funds held in the Collection Account, the
         Escrow Account, and the REO Account) over each such investment and
         (except with respect to the income on funds held in the Collection
         Account, the Escrow Account and the REO Account) the income thereon,
         and any certificate or other instrument evidencing any such investment
         shall be delivered directly to the Trustee or its agent, together with
         any document of transfer necessary to transfer title to such investment
         to the Trustee or its nominee. In the event amounts on deposit in an
         Investment Account are at any time invested in a Permitted Investment
         payable on demand, the Trustee shall:

                  (i) consistent with any notice required to be given
         thereunder, demand that payment thereon be made on the last day such
         Permitted Investment may otherwise mature

                                       75

<PAGE>

         hereunder in an amount equal to the lesser of (1) all amounts then
         payable thereunder and (2) the amount required to be withdrawn on such
         date; and

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

                  (b) All income in the nature of interest from the investment
         of funds in the Collection Account, the Escrow Account (subject to
         Section 3.05(b)) and the REO Account shall be for the benefit of the
         Master Servicer as compensation for the Master Servicer's services
         pursuant to this Agreement. The Master Servicer shall deposit in the
         Collection Account, the Escrow Account, and the REO Account from its
         own funds the amount of any loss incurred in respect of any such
         Permitted Investment made with funds in such account immediately upon
         realization of such loss.

                  (c) All income in the nature of interest or earnings from the
         investment of funds in the Distribution Account shall be for the
         benefit of the Trustee as compensation for the Trustee's services
         pursuant to this Agreement. The Trustee shall deposit in the
         Distribution Account from its own funds the amount of any loss incurred
         on Permitted Investments in the Distribution Account.

                  (d) Funds on deposit in the Net WAC Rate Carryover Reserve
         Account may be invested in Permitted Investments in accordance with
         this Section 3.06 subject to any limitations set forth in Section 4.10
         and any investment earnings or interest paid shall accrue to the
         benefit of the party designated in such section and the party so
         designated shall deposit in the related account from its own funds the
         amount of any loss incurred on Permitted Investments in such account.

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

                  (f) The Trustee or its Affiliates are permitted to receive
         compensation that could be deemed to be in the Trustee's economic
         self-interest for (i) serving as investment adviser, administrator,
         shareholder, servicing agent, custodian or sub-custodian with respect
         to certain of the Permitted Investments, (ii) using Affiliates to
         effect transactions in certain Permitted Investments and (iii)
         effecting transactions in certain Permitted Investments. Such
         compensation shall not be considered an amount that is reimbursable or
         payable pursuant to Section 3.05.

                  SECTION 3.07. Payment of Taxes, Insurance and Other Charges.

                  With respect to each Mortgage Loan, the Master Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and the status of fire and hazard insurance

                                       76

<PAGE>

coverage and, as to those Mortgage Loans subject to a voluntary escrow
agreement, shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Master Servicer in amounts sufficient for such purposes, as allowed under
the terms of the Mortgage or Applicable Regulations. The Master Servicer assumes
full responsibility for the timely payment of all such bills and shall effect
timely payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make Servicing Advances from its own funds to effect such payments. To the
extent that the Mortgage does not provide for Escrow Payments, the Master
Servicer shall use reasonable efforts consistent with the Servicing Standard to
determine that any such payments are made by the Mortgagor at the time they
first become due and shall ensure that the Mortgaged Property is not lost to a
tax lien as a result of nonpayment and that such Mortgaged Property is not left
uninsured.

                  SECTION 3.08. Maintenance of Hazard Insurance.

                  The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage
Loan, plus accrued interest at the Mortgage Rate and related Servicing Advances
(each measured at the time it became an REO Property). The Master Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to be
collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing loans held for its
own account, subject to the terms and conditions of the related Mortgage and
Mortgage Note) shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.05, if received in respect of a Mortgage Loan,
or in the REO Account, subject to withdrawal pursuant to Section 3.13, if
received in respect of an REO Property. Any cost incurred by the Master Servicer
in maintaining any such insurance shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid Stated Principal
Balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the Master
Servicer will cause to be maintained a flood insurance policy in respect
thereof.

                                       77

<PAGE>

Such flood insurance shall be in an amount equal to the lesser of (i) the unpaid
Stated Principal Balance of the related Mortgage Loan; (ii) the maximum amount
of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program); and (iii) the maximum
insurable value of the improvements which are part of the related Mortgaged
Property.

                  SECTION 3.09. Maintenance of Mortgage Blanket Insurance.

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of
"A:V" or better in Best's Key Rating Guide (or such other rating that is
comparable to such rating) insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first two sentences of Section 3.08, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of Section 3.08, and there shall have been one or more losses which
would have been covered by such policy, deposit to the Collection Account from
its own funds the amount not otherwise payable under the blanket policy because
of such deductible clause. In connection with its activities as administrator
and servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Trustee and the Certificateholders, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy.

                  SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.

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

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

                  The Master Servicer shall, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute

                                       78

<PAGE>

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

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.11,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

                  SECTION 3.12. Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall, consistent with the Servicing
Standard and the Loss Mitigation Action Plan, foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section

                                       79

<PAGE>

3.02. The Master Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that such costs and
expenses shall be recoverable as Servicing Advances by the Master Servicer as
contemplated in Section 3.05 and Section 3.13. The foregoing is subject to the
provision that, in any case in which Mortgaged Property shall have suffered
damage from an Uninsured Cause, the Master Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion that such restoration shall increase the proceeds of
liquidation of the related Mortgage Loan after reimbursement to itself for such
expenses.

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

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

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

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

                  The cost of the environmental audit report contemplated by
this Section 3.12 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(a)(v), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                                       80

<PAGE>

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund; provided, however, that the Master Servicer
shall not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure if the estimated costs of the environmental clean up, as estimated
in the environmental audit report, together with the Advances made by the Master
Servicer and the estimated costs of foreclosure or acceptance of a deed in lieu
of foreclosure exceeds the estimated value of the Mortgaged Property. The cost
of any such compliance, containment, cleanup or remediation shall be advanced by
the Master Servicer, subject to the Master Servicer's right to be reimbursed
therefor from the Collection Account as provided in Section 3.05(a)(v), such
right of reimbursement being prior to the rights of Certificateholders to
receive any amount in the Collection Account received in respect of the affected
Mortgage Loan or other Mortgage Loans.

                  (c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
shall be applied in the following order of priority: FIRST, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 3.05(a)(ii); SECOND, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and THIRD, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery shall be allocated by the Master Servicer as follows: FIRST, to unpaid
Servicing Fees; and SECOND, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.05(a)(ii).

                  SECTION 3.13. Title, Management and Disposition of REO
                                Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. Pursuant to the power of attorney granted in Section
3.01, the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.13 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of the Trust Fund (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year the Trust Fund acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMS Insurer and the Depositor an Opinion of Counsel, addressed to the
Trustee, the NIMS Insurer and the Depositor, to the effect that the holding by
the Trust Fund of such REO Property subsequent to three years after its
acquisition shall not result in the imposition on any Trust REMIC of taxes on

                                       81

<PAGE>

"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any Trust REMIC to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. The Master Servicer shall manage,
conserve, protect and operate each REO Property for the benefit of the
Certificateholders and solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.

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

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

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

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

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

                  To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the

                                       82

<PAGE>

Master Servicer owned the REO Property and if in the Master Servicer's judgment,
the payment of such amounts shall be recoverable from the rental or sale of the
REO Property.

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

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

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

                  (iii) authorize any construction on any REO Property, other
         than the completion of a building or other improvement thereon, and
         then only if more than ten percent of the construction of such building
         or other improvement was completed before default on the related
         Mortgage Loan became imminent, all within the meaning of Section
         856(e)(4)(B) of the Code; or

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

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

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

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

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

                  (iii) none of the provisions of this Section 3.13(c) relating
         to any such contract or to actions taken through any such Independent
         Contractor shall be deemed to relieve the

                                       83

<PAGE>

         Master Servicer of any of its duties and obligations to the Trustee on
         behalf of the Certificateholders with respect to the operation and
         management of any such REO Property; and

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

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

                  (d) In addition to the withdrawals permitted under Section
3.13(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.04(g)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.13(c) or this Section 3.13(d).

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

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.04(g)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

                  SECTION 3.14. [Reserved].

                                       84

<PAGE>

                  SECTION 3.15. Reports of Foreclosure and Abandonment of
                                Mortgaged Properties.

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

                  SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.

                  (a)(i) The NIMS Insurer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16(a)(i), the Master Servicer shall be required to
continue to make Advances pursuant to Section 4.03. The NIMS Insurer shall not
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The NIMS Insurer
shall purchase such delinquent Mortgage Loan at a price equal to the Purchase
Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to
this Section 3.16(a)(i) shall be accomplished by remittance to the Master
Servicer for deposit in the Collection Account of the amount of the Purchase
Price. The Trustee shall effectuate the conveyance of such delinquent Mortgage
Loan to the NIMS Insurer to the extent necessary, as requested, and the Trustee
shall promptly deliver all documentation to the NIMS Insurer.

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

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

                                       85

<PAGE>

more delinquent, then the Master Servicer shall be entitled to another
repurchase option with respect to such Mortgage Loan or REO Property as provided
in the preceding paragraph.

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

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer shall
promptly notify the Trustee and any related Custodian by a certification in the
form of Exhibit E or such other form supplied by the Master Servicer provided
that it does not differ from the substantive content of Exhibit E (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.04(b) have been or
shall be so deposited) of a Servicing Officer and shall request delivery to it
of the Mortgage File. Upon receipt of such certification and request, the
Trustee or such Custodian, as the case may be, shall promptly release (and in no
event more than three (3) Business Days thereafter) the related Mortgage File to
the Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the form of
Exhibit E or such other form supplied by the Master Servicer provided that it
does not differ from the substantive content of Exhibit E, release the related
Mortgage File to the Master Servicer, and the Trustee shall, at the direction of
the Master Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings and the Master Servicer shall retain such
Mortgage File in trust for the benefit of the Certificateholders. Such Request
for Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Trustee or to such Custodian
when the need therefor by the Master Servicer no longer exists, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account or the Mortgage File
or such document has been delivered to an attorney, or to a public trustee or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Master Servicer has delivered to
the Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, upon request, a copy of the
Request for Release shall be released by the Trustee or such Custodian to the
Master Servicer.

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any

                                       86

<PAGE>

legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or Mortgage or to obtain a deficiency judgment, or to enforce any other
remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Trustee and a statement as
to the reason such documents or pleadings are required and that the execution
and delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien upon completion
of the foreclosure or trustee's sale.

                  (d) The Trustee and the Master Servicer may mutually agree on
policies and procedures (commercially reasonable in nature) to allow the
submission of any and all requests for the release of a Mortgage File
electronically with a digital signature or other identifier to designate the
Servicing Officer of the Master Servicer requesting such collateral.

                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 4.03(e). In addition, the
Master Servicer shall be entitled to recover unpaid Servicing Fees out of
Insurance Proceeds or Liquidation Proceeds to the extent permitted by Section
3.05(a)(ii), out of general funds in the Collection Account to the extent
permitted by Section 3.05(a) and out of amounts derived from the operation and
sale of an REO Property to the extent permitted by Section 3.13. The right to
receive the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement.

                  Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Master Servicer only to the extent such fees or charges are received by the
Master Servicer. The Master Servicer shall also be entitled pursuant to Section
3.05(a)(vi) to withdraw from the Collection Account, pursuant to Section 3.04(h)
to withdraw from any Escrow Account and pursuant to Section 3.13(b) to withdraw
from any REO Account, as additional servicing compensation, interest or other
income earned on deposits therein, subject to Section 3.06. The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including premiums for the insurance required by
Section 3.08, Section 3.09 and Section 3.10, to the extent such premiums are not
paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of
each Sub-Servicer, and to the extent provided in Section 8.05, the fees and
expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.

                  SECTION 3.19. Statement as to Compliance.

                  The Master Servicer shall deliver to the Trustee, the NIMS
Insurer, the Depositor and each Rating Agency on or before March 15th of each
calendar year commencing in 2005, an Officers' Certificate in a form similar to
Exhibit M attached hereto agreeable to the parties hereto, stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such

                                       87

<PAGE>

officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Master Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of any such statement shall be
provided by the Trustee to any Certificateholder and to any Person identified to
the Trustee as a prospective transferee of a Certificate, upon the request and
at the expense of the requesting party, provided that such statement is
delivered by the Master Servicer to the Trustee.

                  SECTION 3.20. Independent Public Accountants' Servicing
                                Report.

                  Not later than March 15th of each calendar year commencing in
2005, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee, the NIMS
Insurer and each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the Master Servicer's
expense, provided that such statement is delivered by the Master Servicer to the
Trustee. In the event such firm of independent certified public accountants
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to so agree; it being
understood and agreed that the Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trustee
has not made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

                  SECTION 3.21. Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder or
Certificate Owner, access to the documentation regarding the Mortgage Loans
required by applicable laws and regulations. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Master Servicer designated by it. In addition,
access to the documentation regarding the Mortgage Loans shall be provided to
any Certificateholder or Certificate Owner, the Trustee, the NIMS Insurer and to
any Person identified to the Master Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by

                                       88

<PAGE>

it at the expense of the Person requesting such access. In each case, access to
any documentation regarding the Mortgage Loans may be conditioned upon the
requesting party's acknowledgment in writing of a confidentiality agreement
regarding any information that is required to remain confidential under the
Gramm-Leach-Bliley Act of 1999.

                  SECTION 3.22. [Reserved].

                  SECTION 3.23. Advance Facility.

                  (a) The Master Servicer and/or the Trustee on behalf of the
Trust Fund, in either case, with the consent of the NIMS Insurer and the Master
Servicer in the case of the Trustee, is hereby authorized to enter into a
facility (an "Advance Facility") with any Person which provides that such Person
(an "Advancing Person") may fund Advances and/or Servicing Advances to the Trust
Fund under this Agreement, although no such facility shall reduce or otherwise
affect the Master Servicer's obligation to fund such Advances and/or Servicing
Advances. If the Master Servicer enters into such an Advance Facility pursuant
to this Section 3.23, upon reasonable request of the Advancing Person, the
Trustee shall execute a letter of acknowledgment, confirming its receipt of
notice of the existence of such Advance Facility. To the extent that an
Advancing Person funds any Advance or any Servicing Advance and provides the
Trustee with notice acknowledged by the Master Servicer that such Advancing
Person is entitled to reimbursement directly from the Trustee pursuant to the
terms of the Advance Facility, such Advancing Person shall be entitled to
receive reimbursement pursuant to this Agreement for such amount to the extent
provided in Section 3.23(b). Such notice from the Advancing Person must specify
the amount of the reimbursement, the Section of this Agreement that permits the
applicable Advance or Servicing Advance to be reimbursed and the section(s) of
the Advance Facility that entitle the Advancing Person to request reimbursement
from the Trustee, rather than the Master Servicer, and include the Master
Servicer's acknowledgment thereto or proof of an Event of Default under the
Advance Facility. The Trustee shall have no duty or liability with respect to
any calculation of any reimbursement to be paid to an Advancing Person and shall
be entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.23. An Advancing Person whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Sub-Servicer pursuant to Section 6.06 hereof and shall not be deemed to be
a Sub-Servicer under this Agreement. If the terms of a facility proposed to be
entered into with an Advancing Person by the Trust Fund would not materially and
adversely affect the interests of any Certificateholder, then the NIMS Insurer
shall not withhold its consent to the Trust Fund's entering such facility.

                  (b) If, pursuant to the terms of the Advance Facility, an
Advancing Person is entitled to reimbursement directly from the Trustee, then
the Master Servicer shall not reimburse itself therefor under Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii)
prior to the remittance to the Trust Fund, but instead the Master Servicer shall
include such amounts in the applicable remittance to the Trustee made pursuant
to Section 3.04(g) to the extent of amounts on deposit in the Collection Account
on the related Master Servicer Remittance Date. The Trustee is hereby authorized
to pay to the Advancing Person reimbursements for Advances and Servicing
Advances from the Distribution Account, to the extent permitted under the terms
of the Advance Facility, to the same extent the Master Servicer would have been
permitted to reimburse itself for

                                       89

<PAGE>

such Advances and/or Servicing Advances in accordance with Section 3.05(a)(ii),
Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii), as the case
may be, had the Master Servicer itself funded such Advance or Servicing Advance.
The Trustee is hereby authorized to pay directly to the Advancing Person such
portion of the Servicing Fee as the parties to any Advance Facility agree to in
writing delivered to the Trustee.

                  (c) All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in first out" (FIFO) basis.

                  (d) In the event the Master Servicer is terminated pursuant to
Section 7.01, the Advancing Person shall succeed to the terminated Master
Servicer's right of reimbursement set forth in Section 7.02(c) to the extent of
such Advancing Person's financing of Advances or Servicing Advances hereunder
then remaining unreimbursed.

                  (e) Any amendment to this Section 3.23 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.23,
including amendments to add provisions relating to a successor master servicer,
may be entered into by the Trustee and the Master Servicer without the consent
of any Certificateholder but with the consent of the NIMS Insurer and written
confirmation from each Rating Agency that the amendment shall not result in the
reduction or withdrawal of the then-current ratings of any outstanding Class of
Certificates or any other notes secured by collateral which includes all or a
portion of the Class CE Certificates, the Class P Certificates and/or the
Residual Certificates, notwithstanding anything to the contrary in this
Agreement.

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01. Distributions.

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

                  (i) first, to the Holders of REMIC I Regular Interest I-LTAA,
         REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC
         I Regular Interest I- LTA3, REMIC I Regular Interest I-LTM1, REMIC I
         Regular Interest I-LTM2 REMIC I Regular Interest I-LTM3, REMIC I
         Regular Interest I-LTM4, REMIC I Regular Interest I- LTM5, REMIC I
         Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
         Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I
         Regular Interest I- LTZZ and REMIC I Regular Interest I-LTP, PRO RATA,
         in an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof

                                       90

<PAGE>

         remaining unpaid from previous Distribution Dates. Amounts payable as
         Uncertificated Interest in respect of REMIC I Regular Interest I-LTZZ
         shall be reduced and deferred when the REMIC I Overcollateralized
         Amount is less than the REMIC I Overcollateralization Target Amount, by
         the lesser of (x) the amount of such difference and (y) the Maximum I-
         LTZZ Uncertificated Interest Deferral Amount and such amount will be
         payable to the Holders of REMIC I Regular Interest I-LTA1, REMIC I
         Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I
         Regular Interest I-LTM1, REMIC I Regular Interest I- LTM2, REMIC I
         Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
         Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I
         Regular Interest I- LTM7, REMIC I Regular Interest I-LTM8 and REMIC I
         Regular Interest I-LTM9 in the same proportion as the
         Overcollateralization Increase Amount is allocated to the Corresponding
         Certificates and the Uncertificated Principal Balance of the REMIC I
         Regular Interest I-LTZZ shall be increased by such amount;

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

                           (a) 98.00% of such remainder (other than amounts
                  payable under clause (c) below) to the Holders of REMIC I
                  Regular Interest I-LTAA and REMIC I Regular Interest I-LTP,
                  until the Uncertificated Balance of such REMIC I Regular
                  Interest is reduced to zero, provided, however, that REMIC I
                  Regular Interest I-LTP shall not be reduced until the
                  Distribution Date immediately following the expiration of the
                  latest Prepayment Charge as identified on the Prepayment
                  Charge Schedule or any Distribution Date thereafter, at which
                  point such amount shall be distributed to REMIC I Regular
                  Interest I-LTP, until $100 has been distributed pursuant to
                  this clause;

                           (b) 2.00% of such remainder, first, to the Holders of
                  REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
                  I-LTA2, REMIC I Regular Interest I- LTA3, REMIC I Regular
                  Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
                  Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
                  REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
                  I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
                  Interest I-LTM8 and REMIC I Regular Interest I-LTM9, 1.00% of
                  and in the same proportion as principal payments are allocated
                  to the Corresponding Certificates, until the Uncertificated
                  Balances of such REMIC I Regular Interests are reduced to
                  zero, and second, to the Holders of REMIC I Regular Interest
                  I-LTZZ, (other than amounts payable under clause (c) below),
                  until the Uncertificated Balance of such REMIC I Regular
                  Interest is reduced to zero; and

                           (c) any remaining amount to the Holders of the Class
                  R Certificates (in respect of the Class R-I Interest);

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to the Holders of (i) REMIC I Regular Interest I-LTAA and REMIC I Regular
Interest I-LTP, in that order and (ii) REMIC I Regular

                                       91

<PAGE>

Interest I-LTZZ, respectively; provided that REMIC I Regular Interest I-LTP
shall not be reduced until the Distribution Date immediately following the
expiration of the latest Prepayment Charge as identified on the Prepayment
Charge Schedule or any Distribution Date thereafter, at which point such amount
shall be distributed to REMIC I Regular Interest I-LTP, until $100 has been
distributed pursuant to this clause; and

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

                  (i) concurrently, to the Holders of the Class A Certificates,
         on a PRO RATA basis based on the entitlement of each such Class, the
         Senior Interest Distribution Amount related to such Certificates; and

                  (ii) sequentially, to the Class M-1, Class M-2, Class M-3,
         Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
         Certificates, in that order, in an amount equal to the Interest
         Distribution Amount for each such Class

                  (3)(I) On each Distribution Date (a) prior to the Stepdown
         Date or (b) on which a Trigger Event is in effect, the Trustee shall
         withdraw from the Distribution Account an amount equal to the Principal
         Distribution Amount and distribute to the Certificateholders the
         following amounts, in the following order of priority:

                  (i) to the Holders of the Class A Certificates (allocated
         among the Classes of Class A Certificates in the priority described in
         Section 4.01(a)(5) below), until the Certificate Principal Balances of
         such Classes have been reduced to zero.

                  (ii) sequentially to the Class M-1, Class M-2, Class M-3,
         Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
         Certificates, in that order, in each case, until the Certificate
         Principal Balance of such Class has been reduced to zero.

                  (II) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, the Trustee
         shall withdraw from the Distribution Account an amount equal to the
         Principal Distribution Amount and distribute to the Certificateholders
         the following amounts, in the following order of priority:

                  (i) to the Holders of the Class A Certificates (allocated
         among the Classes of Class A Certificates in the priority described in
         Section 4.01(a)(5) below), up to an amount equal to the Class A
         Principal Distribution Amount, until the Certificate Principal Balances
         of such Classes have been reduced to zero.

                  (ii) to the Holders of the Class M-1 Certificates, the Class
         M-1 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                                       92

<PAGE>

                  (iii) to the Holders of the Class M-2 Certificates, the Class
         M-2 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iv) to the Holders of the Class M-3 Certificates, the Class
         M-3 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (v) to the Holders of the Class M-4 Certificates, the Class
         M-4 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (vi) to the Holders of the Class M-5 Certificates, the Class
         M-5 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (vii) to the Holders of the Class M-6 Certificates, the Class
         M-6 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (viii) to the Holders of the Class M-7 Certificates, the Class
         M-7 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (ix) to the Holders of the Class M-8 Certificates, the Class
         M-8 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero; and

                  (x) to the Holders of the Class M-9 Certificates, the Class
         M-9 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero.

                  (4) On each Distribution Date, the Net Monthly Excess Cashflow
         shall be distributed as follows:

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

                  (ii) sequentially, to the Holders of the Class M-1, Class M-2,
         Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
         Class M-9 Certificates, in that order, the related Interest Carry
         Forward Amount allocable to such Classes of Certificates;

                  (iii) sequentially, to the Holders of the Class M-1, Class
         M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
         and Class M-9 Certificates, in that order, the related Allocated
         Realized Loss Amount allocable to such Classes of Certificates;

                                       93

<PAGE>

                  (iv) to the Net WAC Rate Carryover Reserve Account, the amount
         required by Section 4.10(b), after taking into account amounts received
         under the Cap Contracts;

                  (v) to the Holders of the Class CE Certificates, (a) the
         related Interest Distribution Amount for such Distribution Date and any
         remaining Overcollateralization Reduction

Amount for such Distribution Date and (b) on any Distribution Date on which the
Certificate Principal Balances of the Class A Certificates and the Mezzanine
Certificates have been reduced to zero, any remaining amounts in reduction of
the Certificate Principal Balance of the Class CE Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and

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

                  (5)(a) With respect to the to the Class A Certificates, all
         principal distributions will be distributed sequentially to the Class
         A-1 Certificates, the Class A-2 Certificates and the Class A-3
         Certificates, in that order, until their respective Certificate
         Principal Balance has been reduced to zero; provided, however, on any
         Distribution Date on which the aggregate Certificate Principal Balances
         of the Class CE Certificates and the Mezzanine Certificates have been
         reduced to zero, notwithstanding anything contained herein to the
         contrary, all distributions of principal to the Class A Certificates
         will be distributed concurrently, on a PRO RATA basis based on the
         Certificate Principal Balance of each such Class.

         On each Distribution Date, following the foregoing distributions, an
amount equal to the amount of Subsequent Recoveries deposited into the
Collection Account pursuant to Section 3.04 shall be applied to increase the
Certificate Principal Balance of the Class of Certificates with the Highest
Priority up to the extent of such Realized Losses previously allocated to that
Class of Certificates pursuant to Section 4.04. An amount equal to the amount of
any remaining Subsequent Recoveries shall be applied to increase the Certificate
Principal Balance of the Class of Certificates with the next Highest Priority,
up to the amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.04, and so on. Holders of such Certificates
will not be entitled to any distribution in respect of interest on the amount of
such increases for any Interest Accrual Period preceding the Distribution Date
on which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Certificate of such Class in accordance
with its respective Percentage Interest.

                  (b) On each Distribution Date, after making the distributions
of the Available Funds as set forth above, the Trustee shall FIRST, withdraw
from the Net WAC Rate Carryover Reserve Account all income from the investment
of funds in the Net WAC Rate Carryover Reserve Account and distribute such
amount to the Holders of the Class CE Certificates and SECOND, withdraw from the
Net WAC Rate Carryover Reserve Account, to the extent of amounts remaining on
deposit therein, the amount of any Net WAC Rate Carryover Amount for such
Distribution Date and distribute such amount as follows:

                                       94

<PAGE>

                  FIRST, concurrently, to the Holders of each Class of Class A
Certificates, the related Cap Amount, in each case up to a maximum amount equal
to the related Net WAC Rate Carryover Amount for such Distribution Date;

                  SECOND, sequentially, to the Holders of each Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
M-9 Certificates, in that order, the related Cap Amount, in each case up to a
maximum amount equal to the related Net WAC Rate Carryover Amount for such
Distribution Date;

                  THIRD, concurrently, to the Holders of each Class of Class A
Certificates, the related Net WAC Rate Carryover Amount remaining unpaid
pursuant to clause first above, on a PRO RATA basis based on such respective
remaining Net WAC Rate Carryover Amounts; and

                  FOURTH, sequentially to the Holders of each Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
M-9 Certificates, in that order, the related Net WAC Rate Carryover Amount
remaining unpaid pursuant to clause second above.

         On each Distribution Date, after the payment of any Net WAC Rate
Carryover Amounts on the Adjustable-Rate Certificates, any amounts remaining in
the Net WAC Rate Carryover Reserve Account (representing payments received by
the Trustee under the Cap Contracts), shall be payable to the Trustee. For so
long as any Adjustable-Rate Certificates are held by the Seller or any of its
Affiliates, the Trustee shall not distribute any Cap Amounts for such
Certificates to the Seller or any of its Affiliates and the Trustee will retain
any such amounts as additional compensation for its role in administering the
Cap Contracts.

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

                  (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date shall be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date, or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate

                                       95

<PAGE>

at the office of the Trustee maintained for such purpose pursuant to Section
8.12 or such other location specified in the notice to Certificateholders of
such final distribution.

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

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

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

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

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

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Trustee and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to remaining non-tendering Certificateholders concerning surrender of
their Certificates but shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in such trust fund. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to the Representative all such amounts, and
all rights of non-tendering Certificateholders in or to such

                                       96

<PAGE>

amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e).

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

                  SECTION 4.02. Statements to Certificateholders.

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

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

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

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

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

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

               (vi) the number, aggregate Stated Principal Balance, weighted
         average remaining term to maturity and weighted average Mortgage Rate
         of the Mortgage Loans as of the related Due Date;

              (vii) the number and aggregate unpaid Stated Principal Balance of
         Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days,
         (c) delinquent 90 or more days, in each case, as of the last day of the
         preceding calendar month, (d) as to which foreclosure

                                       97

<PAGE>

         proceedings have been commenced and (e) with respect to which the
         related Mortgagor has filed for protection under applicable bankruptcy
         laws, with respect to whom bankruptcy proceedings are pending or with
         respect to whom bankruptcy protection is in force;

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

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

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

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

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

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

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

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

              (xvi) the aggregate amount of any Prepayment Interest Shortfall
         for such Distribution Date, to the extent not covered by payments by
         the Master Servicer pursuant to Section 4.03(e) or allocated to the
         Class CE Certificates;

                                       98

<PAGE>

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

              (xviii) the Overcollateralization Target Amount and the Credit
         Enhancement Percentage for such Distribution Date;

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

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

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

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

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

              (xxiv) the amount on deposit in the Net WAC Rate Carryover Reserve
         Account as of the Determination Date;

              (xxv) whether a Trigger Event is in effect; and

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

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the NIMS Insurer, the Master
Servicer and the Rating Agencies via the Trustee's internet website. The
Trustee's internet website shall initially be located at
https:\\www.corporatetrust.db.com/invr. Assistance in using the website can be
obtained by calling the Trustee's investor relations desk at (800) 735-7777.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the investor
relations desk and indicating such. The Trustee shall have the right to change
the way such statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes.

                                       99

<PAGE>

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

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

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

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

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

                  SECTION 4.03. Remittance Reports and Other Reports to the
                                Trustee; Advances; Payments in Respect of
                                Prepayment Interest Shortfalls.

                  (a) On the Master Servicer Reporting Date, the Master Servicer
shall deliver to the Trustee and the NIMS Insurer by telecopy (or by such other
means as the Master Servicer, the Trustee and the NIMS Insurer may agree from
time to time) a Remittance Report with respect to the related Distribution Date.
Such Remittance Report shall include (i) the amount of Advances to be made by
the Master Servicer in respect of the related Distribution Date, the aggregate
amount of Advances outstanding after giving effect to such Advances, and the
aggregate amount of Nonrecoverable Advances in respect of such Distribution Date
and (ii) such other information with respect to the Mortgage Loans as the
Trustee may reasonably require to perform the calculations

                                       100

<PAGE>

necessary to make the distributions contemplated by Section 4.01 and to prepare
the statements to Certificateholders contemplated by Section 4.02. The Trustee
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Master Servicer.

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, the NIMS Insurer and the Depositor
a statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.04(b) and each category of withdrawal specified
in Section 3.05. Such statement may be in the form of the then current Fannie
Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as to
the aggregate of the outstanding Stated Principal Balances of all of the
Mortgage Loans as of the last day of the calendar month immediately preceding
such Distribution Date. Copies of such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.

                  (b) The amount of Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.03(d), the sum of
(i) the aggregate amount of Monthly Payments (with each interest portion thereof
net of the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.13 for
distribution on such Distribution Date.

                  On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds, (ii) from the Collection Account, to the extent of funds held therein
for future distribution (in which case, it shall cause to be made an appropriate
entry in the records of the Collection Account that amounts held for future
distribution have been, as permitted by this Section 4.03, used by the Master
Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution used by the Master Servicer to make an
Advance as permitted in the preceding sentence or withdrawn by the Master
Servicer as permitted in Section 3.05(a)(vii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard to
Advances to be made on the Master Servicer Remittance Date) shall

                                       101

<PAGE>

be less than the total amount that would be distributed to the Classes of
Certificateholders pursuant to Section 4.01 on such Distribution Date if such
amounts held for future distributions had not been so used to make Advances. The
Trustee shall provide notice to the Master Servicer and the NIMS Insurer by
telecopy by the close of business on any Master Servicer Remittance Date in the
event that the amount remitted by the Master Servicer to the Trustee on such
date is less than the Advances required to be made by the Master Servicer for
the related Distribution Date.

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

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

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

                  SECTION 4.04. Allocation of Realized Losses.

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

                                       102

<PAGE>

delivered to the Trustee by the Master Servicer on the Master Servicer Reporting
Date immediately following the end of (x) in the case of Bankruptcy Losses
allocable to interest, the Due Period during which any such Realized Loss was
incurred, and (y) in the case of all other Realized Losses, the Prepayment
Period during which any such Realized Loss was incurred.

                  (b) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows: FIRST, in
reduction of interest accrued on and otherwise distributable to the Class CE
Certificates to the extent of Net Monthly Excess Cashflow used to pay principal
on the Class A Certificates and the Mezzanine Certificates under clause (i) of
Section 4.01 hereof; SECOND, in reduction of interest accrued on and otherwise
distributable to the Class CE Certificates to the extent of Net Monthly Excess
Cashflow available for distribution pursuant to clauses (ii) through (vi) of
Section 4.01(a)(4) hereof; and THIRD, in reduction of the Certificate Principal
Balance of the Class CE Certificates (determined after taking into account all
distributions made on the Certificates on such Distribution Date), until the
Certificate Principal Balance thereof has been reduced to zero. If on any
Distribution Date, after all distributions are made by the Trustee pursuant to
Section 4.01 hereof, the aggregate Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates and the Class P certificates exceeds
the sum of the Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after taking into account prepayments during the
related Prepayment Period), the amount of such excess shall be allocated: FIRST,
to the Class M-9 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; SECOND, to the Class M-8 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; THIRD, to the
Class M-7 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; FOURTH, to the Class M-6 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; FIFTH, to the Class M-5
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; SIXTH, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; SEVENTH, to the Class M-3
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; EIGHTH, to the Class M-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and NINTH, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. All Realized Losses to be allocated to the Certificate Principal
Balances of all Classes on any Distribution Date shall be so allocated after the
actual distributions to be made on such date as provided above.

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

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

                                       103

<PAGE>

be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.

                  (c)(i) Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following REMIC I
Regular Interests in the specified percentages, as follows: FIRST, to
Uncertificated Interest payable to the REMIC I Regular Interest I-LTAA and REMIC
I Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC I
Interest Loss Allocation Amount, 98% and 2%, respectively; SECOND, to the
Uncertificated Balances of the REMIC I Regular Interest I-LTAA and REMIC I
Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC I Principal
Loss Allocation Amount, 98% and 2%, respectively; THIRD, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM9 has been reduced to
zero; FOURTH, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM8 and REMIC I Regular Interest I-LTZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM8 has been reduced to zero; FIFTH, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM7 and REMIC I Regular
Interest I- LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM7 has been reduced to zero; SIXTH, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM6 has been reduced to zero; SEVENTH, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM5 has been reduced to zero; EIGHTH, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM4 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM4 has been reduced to zero; NINTH, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular
Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM3 has been reduced to zero; TENTH, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero; and ELEVENTH, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM1 has been reduced to zero.

                  SECTION 4.05. Compliance with Withholding Requirements.

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

                                       104

<PAGE>

Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate the amount withheld to such Certificateholders.

                  SECTION 4.06. Commission Reporting.

                  (a) The Trustee shall reasonably cooperate with the Depositor
in connection with the Trust's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Trustee
shall prepare on behalf of the Trust any Forms 8-K and 10-K customary for
similar securities as required by the Exchange Act and the Rules and Regulations
of the Commission thereunder, and the Depositor shall sign (or shall cause
another entity acceptable to the Commission to sign) and the Trustee shall file
(via the Commission's Electronic Data Gathering and Retrieval System) such forms
on behalf of the Depositor (or such other entity). The Depositor hereby grants
to the Trustee a limited power of attorney to execute any Form 8-K and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until the earlier of (i) receipt by the Trustee from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust.
Notwithstanding anything herein to the contrary, the Depositor, and not the
Trustee, shall be responsible for executing each Form 10-K filed on behalf of
the Trust.

                  (b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Commission), the Trustee shall file a
Form 10- K, in substance as required by applicable law or applicable Commission
staff's interpretations. Such Form 10-K shall include as exhibits the Master
Servicer's annual statement of compliance described under Section 3.19 and the
accountant's report described under Section 3.20, in each case to the extent
they have been timely delivered to the Trustee. If they are not so timely
delivered, the Trustee shall file an amended Form 10-K including such documents
as exhibits reasonably promptly after they are delivered to the Trustee. The
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Trustee's
inability or failure to obtain any information not resulting from its own
negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit J-1 (the "Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization.

                  (c) In addition, the Trustee shall sign a certification (in
the form attached hereto as Exhibit J-2) for the benefit of the Depositor and
its officers, directors and Affiliates regarding certain aspects of items 1
through 3 of the Certification (provided, however, that the Trustee shall not
undertake an analysis of the accountant's report attached as an exhibit to the
Form 10-K). The Trustee's certification shall be delivered to the Depositor by
no later than March 18th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the
Certification to the Trustee for filing no later than March 20th of each year
(or if such day is not a Business Day, the immediately preceding Business Day).

                  In addition, the Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures,

                                       105

<PAGE>

reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach of the Trustee's obligations
under this Section 4.06 or the Trustee's negligence, bad faith or willful
misconduct in connection therewith. The Depositor shall indemnify and hold
harmless the Trustee and its officers, directors and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon a breach of the Depositor's obligations under this Section 4.06
or the Depositor's negligence, bad faith or willful misconduct in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor or the Trustee, as applicable, then
the other party, in connection with a breach of its respective obligations under
this Section 4.06 or its respective negligence, bad faith or willful misconduct
in connection therewith, agrees that it shall contribute to the amount paid or
payable by the other party as a result of the losses, claims, damages or
liabilities of the other party in such proportion as is appropriate to reflect
the relative fault of the Depositor on the one hand and the Trustee on the
other.

                  (d) Upon any filing with the Commission, the Trustee shall
promptly deliver to the Depositor a copy of any executed report, statement or
information.

                  (e) Prior to January 30th of the first year in which the
Trustee is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust.

                  (f) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.06 comply with the reporting requirements under
the Exchange Act, the Trustee hereby agrees that it shall reasonably cooperate
to amend the provisions of this Section 4.06 (in accordance with Section 11.01)
in order to comply with such amended reporting requirements and such amendment
of this Section 4.06. Any such amendment may result in the reduction of the
reports filed by the Depositor under the Exchange Act. Notwithstanding the
foregoing, the Trustee shall not be obligated to enter into any amendment
pursuant to this Section that adversely affects its obligations and immunities
under this Agreement.

                  SECTION 4.07. [Reserved].

                  SECTION 4.08. [Reserved].

                  SECTION 4.09. [Reserved].

                  SECTION 4.10 Net WAC Rate Carryover Reserve Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain with itself, as agent for the Trustee, a separate,
segregated trust account titled, "Net WAC Rate Carryover Reserve Account,
Deutsche Bank National Trust Company, as Trustee, in trust for the registered
Holders of Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through
Certificates, Series 2004-IA1." The Trustee shall deposit into the Net WAC Rate
Carryover Reserve Account any payments received by it (i) under the Cap
Contracts for the benefit of the Holders of the Adjustable- Rate Certificates
and (ii) pursuant to Section 4.01(a)(4)(v).

                                       106

<PAGE>

                  (b) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class CE Certificateholders
to, and therefore shall, deposit into the Net WAC Rate Carryover Reserve Account
the amount of such Net WAC Rate Carryover Amount, after taking into account
amounts received under the Cap Contracts, rather than distributing such amounts
to the Class CE Certificateholders. On each such Distribution Date, the Trustee
shall hold all such amounts for the benefit of the Holders of the Class A
Certificates and the Mezzanine Certificates, and shall distribute such amounts
to the Holders of the Class A Certificates and the Mezzanine Certificates in the
amounts and priorities set forth in Section 4.01(a).

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

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

                  (e) At the written direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the Net WAC Rate Carryover Reserve Account to
invest the funds in such account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment. If no investment direction of the
Holders of a majority in Percentage Interest in the Class CE Certificates with
respect to the Net WAC Rate Carryover Reserve Account is received by the
Trustee, the Trustee shall invest the funds in the Deutsche Bank Institutional
Cash Management Fund 541 so long as it is a Permitted Investment. Interest
earned on such investment shall be deposited into the Net WAC Rate Carryover
Reserve Account.

                  (f) For federal income tax return and information reporting,
the value assigned to the right of the Holders of the Class A Certificates and
the Mezzanine Certificates to receive

                                       107

<PAGE>

payments from the Net WAC Rate Carryover Reserve Account in respect of any Net
WAC Rate Carryover Amount shall be $80,000 and $53,000.

                                       108

<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01. The Certificates.

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

                  The Certificates shall be substantially in the forms annexed
hereto as Exhibits A-1 through A-16. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate shall share
ratably in all rights of the related Class.

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

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

                                       109

<PAGE>

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

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

                  If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor or (ii) after the occurrence of a Master Servicer Event of
Default, Certificate Owners representing in the aggregate not less than 51% of
the Ownership Interests of the Book-Entry Certificates advise the Trustee
through the Depository, in writing, that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
Owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee of the Book-Entry Certificates by the Book-Entry Custodian or the
Depository, as applicable, accompanied by registration instructions from the
Depository for registration of transfer, the Trustee shall issue the Definitive
Certificates. Such Definitive Certificates shall be issued in minimum
denominations of $25,000 ($50,000 in the case of the Class M-9 Certificates),
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $25,000 ($50,000 in the case of the Class M-9
Certificates) immediately prior to the issuance of a Definitive Certificate
shall be issued in a minimum denomination equal to the amount represented by
such Book-Entry Certificate. None of the Depositor, the Master Servicer or the
Trustee shall be liable for any delay in the delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates, and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.

                                       110

<PAGE>

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

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

                  (b) No transfer of any Class M-9 Certificate, Class CE
Certificate, Class P Certificate or Residual Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of a Class M-9 Certificate, Class CE Certificate,
Class P Certificate or Residual Certificate is to be made without registration
or qualification (other than in connection with the initial transfer of any such
Certificate by the Depositor to an affiliate of the Depositor), the Trustee and
the Certificate Registrar shall each require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the forms
attached hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration (which Opinion of Counsel shall not be an expense of the Depositor,
the Trustee, the Master Servicer, in its capacity as such, or the Trust Fund),
together with copies of the written certification(s) of the Certificateholder
desiring to effect the transfer and/or such Certificateholder's prospective
transferee upon which such Opinion of Counsel is based, if any. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class M-9 Certificates, the Class CE Certificates, the Class P
Certificates or the Residual Certificates under the 1933 Act or any other
securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of a Class
M-9 Certificate, Class CE Certificate, Class P Certificate or Residual
Certificate shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

                  Notwithstanding the foregoing, no certification or Opinion of
Counsel described in this Section 5.02(b) shall be required in connection with
the transfer, on the Closing Date, of any Class R Certificate by the Depositor
to an "accredited investor" within the meaning of Rule 501(d) of the 1933 Act.

                                       111

<PAGE>

                  (c) No transfer of a Class M-9 Certificate, Class CE
Certificate, Class P Certificate or Residual Certificate or any interest therein
shall be made to any Plan subject to ERISA or Section 4975 of the Code, any
Person acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "Plan Assets" of a Plan within the meaning of
the Department of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101
("Plan Assets"), as certified by such transferee in the form of Exhibit G,
unless either (i) the Trustee is provided with an Opinion of Counsel for the
benefit of the Depositor, the Trustee, the NIMS Insurer and the Master Servicer
and on which they may rely, which shall be to the effect that the purchase and
holding of such Certificates is permissible under applicable law, shall not
constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code and shall not subject the Depositor, the Master
Servicer, the NIMS Insurer, the Trustee or the Trust Fund to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Depositor, the Master Servicer, the NIMS
Insurer, the Trustee or the Trust Fund or (ii) solely in the case of the Class
M-9 Certificates, the Trustee receives a certification from the prospective
transferee in the form of Exhibit G that the Class M-9 Certificates have been
offered in an underwriting or placement within the meaning of Prohibited
Transaction Exemption 2002-41, as amended ("PTE 2002-41"). Neither an Opinion of
Counsel nor any certification will be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.

                  Each beneficial owner of the Mezzanine Certificates or any
interest therein shall be deemed to have represented, by virtue of its
acquisition or holding of that Certificate or interest therein, that either (i)
it is not a Plan or acting, directly or indirectly, on behalf of a Plan or with
Plan Assets, (ii) for Mezzanine Certificates other than the Class M-9
Certificates (unless the Trustee has received the certification referred to in
clause (ii) of the preceding paragraph in which case it shall apply to the Class
M-9 Certificates), it has acquired and is holding such Mezzanine Certificates in
reliance on the Underwriters' Exemption, and that it understands that there are
certain conditions to the availability of the Underwriters' Exemption, including
that the Certificates must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by Moody's, Fitch or S&P or (iii) (1) it is an
insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in PTCE 95-60, and (3) the conditions in Sections I and III
of PTCE 95-60 have been satisfied.

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

                                       112

<PAGE>

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

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

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

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

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

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

                                       113

<PAGE>

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

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

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

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

                                       114

<PAGE>

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

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

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

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

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

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee, shall execute and cause the Certificate
Registrar to authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
In addition, (i) with respect to each Class R Certificate, the Holder thereof
may exchange, in the manner described above, the Class R Certificate for two
separate Certificates, each representing such Holder's respective Percentage
Interest in the Class R-I Interest and the Class R-II Interest, respectively, in
each case that was evidenced by the Class R Certificate being exchanged and (ii)
with respect to each Class R-X Certificate, the Holder thereof may exchange, in
the manner described above, such Class R-X Certificate for two separate
Certificates, each representing such Holder's respective Percentage Interest in
the Class R-III Interest and the Class R-IV Interest, respectively, in each case
t hat was evidenced by the Class R-X Certificate being exchanged.

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

                                       115

<PAGE>

or governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

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

                  (i) The Trustee shall cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to provide the Trustee with an updated
copy of the Certificate Register on the first Business Day in March and August
of each year, commencing in March 2005.

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

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

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

                  SECTION 5.04. Persons Deemed Owners.

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

                  SECTION 5.05. Certain Available Information.

                  On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trustee ten copies of any private
placement memorandum or other disclosure document used by the Depositor

                                       116

<PAGE>

in connection with the offer and sale of the Class CE Certificates, Class P
Certificates or Residual Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Trustee, the Depositor
promptly shall inform the Trustee of such event and shall deliver to the Trustee
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Trustee shall maintain at its Corporate
Trust Office and shall make available free of charge during normal business
hours for review by any Holder of a Certificate and/or Certificate Owner or any
Person identified to the Trustee as a prospective transferee of a Certificate,
originals or copies of the following items: (i) in the case of a Holder,
Certificate Owner or prospective transferee of a Class CE Certificate, Class P
Certificate or Residual Certificate, the private placement memorandum or other
disclosure document relating to such Certificates, if any, in the form most
recently provided to the Trustee; and (ii) in all cases, (A) this Agreement and
any amendments hereof entered into pursuant to Section 11.01, (B) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date, (C) all
certifications delivered by a Responsible Officer of the Trustee since the
Closing Date pursuant to Section 10.01(h), (D) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date to evidence the Master Servicer's determination that any Advance or
Servicing Advance was, or if made, would be a Nonrecoverable Advance or
Nonrecoverable Servicing Advance, respectively, and (E) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date pursuant to Section 4.04(a). Copies and mailing of any and all of the
foregoing items shall be available from the Trustee upon request at the expense
of the person requesting the same.

                                       117

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

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

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

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

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

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

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

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

                                       118

<PAGE>

would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the NIMS Insurer, the Master
Servicer or the Trustee and any director, officer, employee or agent of the
Depositor, the NIMS Insurer, the Master Servicer or the Trustee may rely in good
faith on any document of any kind which, PRIMA FACIE, is properly executed and
submitted by any Person respecting any matters arising hereunder.

                  The Depositor, the NIMS Insurer, the Master Servicer and any
director, officer, employee or agent of the Depositor, the NIMS Insurer or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense relating to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) or, in the case of the Depositor and the Master Servicer, any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor, the NIMS
Insurer nor the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and, in its opinion, does not involve it
in any expense or liability; provided, however, that each of the Depositor, the
NIMS Insurer and the Master Servicer may in its discretion undertake any such
action which it may deem necessary or desirable with respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, unless the Depositor or the Master
Servicer acts without the consent of Holders of Certificates entitled to at
least 51% of the Voting Rights (which consent shall not be necessary in the case
of litigation or other legal action by either to enforce their respective rights
or defend themselves hereunder), the legal expenses and costs of such action and
any liability resulting therefrom (except any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor, the NIMS Insurer and the Master Servicer
shall be entitled to be reimbursed therefor from the Collection Account as and
to the extent provided in Section 3.05, any such right of reimbursement being
prior to the rights of the Certificateholders to receive any amount in the
Collection Account.

                  SECTION 6.04. Limitation on Resignation of the Master
                                Servicer.

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

                                       119

<PAGE>

those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.

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

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

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

                  SECTION 6.06. Sub-Servicing Agreements Between the Master
                                Servicer and Sub-Servicers.

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

                                       120

<PAGE>

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the Sub-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts in
which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 6.11 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer shall examine each Sub-Servicing Agreement and shall be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement shall
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 6.11, provisions relating to insurance in
Section 3.10 or priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub-Servicing Accounts or the timing and amount of remittances by
the Sub- Servicers to the Master Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Master Servicer
shall deliver to the Trustee and the NIMS Insurer copies of all Sub-Servicing
Agreements, and any amendments or modifications thereof, promptly upon the
Master Servicer's execution and delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Mortgage Loan Purchase Agreement against the Seller shall be
effected by the Master Servicer to the extent it is not the Seller, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.

                                       121

<PAGE>

                  SECTION 6.07. Successor Sub-Servicers.

                  The Master Servicer, with the consent of the NIMS Insurer,
shall be entitled to terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such Sub-
Servicer shall be assumed simultaneously by the Master Servicer without any act
or deed on the part of such Sub-Servicer or the Master Servicer, and the Master
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies
under Section 6.06.

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

                  SECTION 6.08. Liability of the Master Servicer.

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

                  SECTION 6.09. No Contractual Relationship Between
                                Sub-Servicers and the NIMS Insurer, the Trustee
                                or Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the NIMS Insurer, the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer except as
set forth in Section 6.10. The Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.

                                       122

<PAGE>

                  SECTION 6.10. Assumption or Termination of Sub-Servicing
                                Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including termination due to a Master Servicer
Event of Default), the Trustee or its designee shall thereupon assume (or cause
its designee or the successor master servicer for the Trustee appointed pursuant
to Section 7.02 to assume) all of the rights and obligations of the Master
Servicer under each Sub-Servicing Agreement that the Master Servicer may have
entered into, unless the Trustee elects to terminate any Sub-Servicing Agreement
in accordance with its terms as provided in Section 6.07. Upon such assumption,
the Trustee, its designee or the successor servicer for the Trustee appointed
pursuant to Section 7.02 shall be deemed, subject to Section 6.07, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Sub-Servicing Agreement to the same extent as
if each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its
designee or any successor Master Servicer shall be deemed to have assumed any
liability or obligation of the Master Servicer that arose before it ceased to be
the Master Servicer.

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

                  SECTION 6.11. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer shall be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer
less its servicing compensation to the extent permitted by the Sub-Servicing
Agreement, and shall thereafter deposit such amounts in the Sub-Servicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Sub- Servicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Master Servicer
for deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Sub-Servicing Account. For purposes of this
Agreement, the Master Servicer shall be deemed to have received payments on the
Mortgage Loans when the Sub-Servicer receives such payments.

                                       123

<PAGE>

                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01. Master Servicer Events of Default.

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

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

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

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

                  (iv) the Master Servicer shall consent to the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshaling of assets and liabilities or similar proceedings of
         or relating to the Master Servicer or of or relating to all or
         substantially all of its property; or

                                       124

<PAGE>

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

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

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

                  If a Master Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Depositor, the NIMS Insurer or the Trustee may, and at the written direction
of the Holders of Certificates entitled to at least 51% of Voting Rights, or at
the direction of the NIMS Insurer, the Trustee shall, by notice in writing to
the Master Servicer and the Depositor, terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. If a Master Servicer Event of Default described in clause
(vii) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof and the Trustee (as successor
Master Servicer) or a successor Master Servicer appointed in accordance with
Section 7.02, shall immediately make such Advance (which Advance shall be part
of Available Funds for such Distribution Date) and assume, pursuant to Section
7.02, the duties of a successor Master Servicer. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates (other
than as a Holder of any Certificate) or the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee pursuant to and under this Section and,
without limitation, the Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver on behalf of and at the
expense of the Master Servicer, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such termination, whether in respect of Advances or

                                       125

<PAGE>

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

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

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.06) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make Advances pursuant to Section 4.03; and provided further, that any failure
to perform such duties or responsibilities caused by the Master Servicer's
failure to provide information required by Section 7.01 shall not be considered
a default by the Trustee as successor to the Master Servicer hereunder;
provided, however, it is understood and acknowledged by the parties that there
will be a period of transition (not to exceed 90 days) before the servicing
transfer is fully effected. As compensation therefor, effective from and after
the time the Master Servicer receives a notice of termination or immediately
upon assumption of the obligations to make Advances, the Trustee shall be
entitled to the Servicing Fee and all funds relating to the Mortgage Loans to
which the Master Servicer would have been entitled if it had continued to act
hereunder (other than amounts which were due or would become due to the Master
Servicer prior to its termination or resignation). Notwithstanding the above and
subject to the next paragraph, the Trustee may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans, or if the Holders of
Certificates entitled to at least 51% of the Voting Rights or the NIMS Insurer
so request in writing to the Trustee promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency (with confirmation from the Rating
Agencies that such appointment shall not result in the reduction or withdrawal
of the rating of any outstanding Class of Certificates and acceptable to the
NIMS Insurer and having a net worth of not less than $15,000,000 as the
successor to the Master Servicer under this Agreement in the assumption of all
or any part of the responsibilities, duties or liabilities of the Master
Servicer under this Agreement. No appointment of a successor to the Master

                                       126

<PAGE>

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

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

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

                                       127

<PAGE>

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

                  (c) If the Master Servicer is terminated pursuant to Section
7.01, then the successor Master Servicer shall not be permitted to reimburse
itself directly for Advances or Servicing Advances under Section 3.05(a)(ii),
Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii) if the Master
Servicer has not been fully reimbursed for its Advances and Servicing Advances,
but instead the successor Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.04(g) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to the
terminated Master Servicer (or the related Advancing Person in accordance with
Section 3.23) and the successor Master Servicer, as applicable, reimbursements
for Advances and Servicing Advances from the Distribution Account to the same
extent each such Master Servicer would have been permitted to reimburse itself
for such Advances and/or Servicing Advances in accordance with Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii),
as the case may be. All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis. At such time as the Master Servicer (or related
Advancing Person) has been reimbursed for all Advances and Servicing Advances
made by it, the successor Master Servicer shall no longer be required to remit
in accordance with the first sentence of this Section 7.02(c) and shall then be
permitted to reimburse itself directly for Advances and Servicing Advances in
accordance with Section 3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or
Section 3.05(a)(vii).

                  SECTION 7.03. Notification to Certificateholders.

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

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

                  SECTION 7.04. Waiver of Master Servicer Events of Default.

                  The Holders representing at least 66% of the Voting Rights
(with the consent of the NIMS Insurer) evidenced by all Classes of Certificates
affected by any default or Master Servicer Event of Default hereunder may waive
such default or Master Servicer Event of Default; provided, however, that a
default or Master Servicer Event of Default under clause (i) or (vii) of Section
7.01 may be waived only by all of the Holders of the Regular Certificates (with
the consent of the NIMS Insurer). Upon any such waiver of a default or Master
Servicer Event of Default, such default or

                                       128

<PAGE>

Master Servicer Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Master Servicer Event of Default or impair
any right consequent thereon except to the extent expressly so waived.

                                       129

<PAGE>

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

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

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

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

                  (i) Prior to the occurrence of a Master Servicer Event of
         Default, and after the curing of all such Master Servicer Events of
         Default which may have occurred, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this
         Agreement, the Trustee shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee and, in the absence of bad faith on the
         part of the Trustee, the Trustee may conclusively rely, as to the truth
         of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee
         that conform to the requirements of this Agreement;

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

                  (iii) The Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the NIMS Insurer or the
         Holders of Certificates entitled to at least 25% of the Voting Rights
         relating to the time, method and place of conducting any proceeding for
         any remedy available to the Trustee or exercising any trust or power
         conferred upon it, under this Agreement.

                                       130

<PAGE>

                  The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require it
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of this Agreement.

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  (a) Except as otherwise provided in Section 8.01:

                  (i) The Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         Officers' Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties;

                  (ii) The Trustee may consult with counsel and any Opinion of
         Counsel shall be full and complete authorization and protection in
         respect of any action taken or suffered or omitted by it hereunder in
         good faith and in accordance with such Opinion of Counsel;

                  (iii) The Trustee shall not be under any obligation to
         exercise any of the trusts or powers vested in it by this Agreement or
         to institute, conduct or defend any litigation hereunder or in relation
         hereto at the request, order or direction of any of the
         Certificateholders or the NIMS Insurer, pursuant to the provisions of
         this Agreement, unless such Certificateholders or the NIMS Insurer, as
         applicable, shall have offered to the Trustee security or indemnity
         reasonably satisfactory to it against the costs, expenses and
         liabilities which may be incurred therein or thereby; nothing contained
         herein shall, however, relieve the Trustee of the obligation, upon the
         occurrence of a Master Servicer Event of Default (which has not been
         cured or waived), to exercise such of the rights and powers vested in
         it by this Agreement, and to use the same degree of care and skill in
         their exercise as a prudent person would exercise or use under the
         circumstances in the conduct of such person's own affairs;

                  (iv) The Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing of all Master Servicer Events of
         Default which may have occurred, the Trustee shall not be bound to make
         any investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document, unless
         requested in writing to do so by the NIMS Insurer or the Holders of
         Certificates entitled to at least 25% of the Voting Rights; provided,
         however, that if the payment within a reasonable time to the Trustee of
         the costs, expenses

                                       131

<PAGE>

         or liabilities likely to be incurred by it in the making of such
         investigation is, in the opinion of the Trustee not reasonably assured
         to the Trustee by such Certificateholders, the Trustee may require
         reasonable indemnity against such expense, or liability from such
         Certificateholders or the NIMS Insurer as a condition to taking any
         such action;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys; and

                  (vii) The Trustee shall not be personally liable for any loss
         resulting from the investment of funds held in the Collection Account,
         the Escrow Account or the REO Account made at the direction of the
         Master Servicer pursuant to Section 3.06.

                  (b) All rights of action under this Agreement or under any of
         the Certificates, enforceable by the Trustee, may be enforced by it
         without the possession of any of the Certificates, or the production
         thereof at the trial or other proceeding relating thereto, and any such
         suit, action or proceeding instituted by the Trustee shall be brought
         in the name of the Trustee for the benefit of all the Holders of such
         Certificates, subject to the provisions of this Agreement.

                  (c) The Depositor hereby directs the Trustee to execute,
         deliver and perform its obligations under the Cap Contracts on the
         Closing Date and thereafter on behalf of the Holders of the Class A
         Certificates and the Mezzanine Certificates. The Seller, the Depositor,
         the Master Servicer and the Holders of the Class A Certificates and the
         Mezzanine Certificates by their acceptance of such Certificates,
         acknowledge and agree that the Trustee shall execute, deliver and
         perform its obligations under the Cap Contracts and shall do so solely
         in its capacity as Trustee of the Trust Fund and not in its individual
         capacity.

                  SECTION 8.03. The Trustee Not Liable for Certificates or
                                Mortgage Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.13) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth with respect to such party in Section 8.13) or of the
Certificates (other than the signature of the Trustee and authentication of the
Certificate Registrar on the Certificates) or of any Mortgage Loan or related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Master Servicer, other than, subject to Section 8.01,
any funds held by or on behalf of the Trustee in accordance with Section 3.04.

                  SECTION 8.04. Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

                                       132

<PAGE>

                  SECTION 8.05. Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee and, to the extent
that the funds therein are at any time insufficient for such purpose, the
Depositor shall pay such fees. The Trustee, or any director, officer, employee
or agent of the Trustee shall be indemnified by REMIC I and held harmless
against any loss, liability or expense (not including expenses, disbursements
and advances incurred or made by the Trustee (including the compensation and the
expenses and disbursements of its agents and counsel) in the ordinary course of
the Trustee's performance in accordance with the provisions of this Agreement)
incurred by the Trustee in connection with any claim or legal action or any
pending or threatened claim or legal action arising out of or in connection with
the acceptance or administration of its obligations and duties under this
Agreement, other than any loss, liability or expense (i) resulting from a breach
of the Master Servicer's obligations and duties under this Agreement and the
Mortgage Loans (for which the Master Servicer shall indemnify pursuant to
Section 8.05(b)), (ii) that constitutes a specific liability of the Trustee
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or negligence in the performance of
its duties hereunder or by reason of reckless disregard of its obligations and
duties hereunder or as a result of a breach of its obligations under Article X
hereof. Any amounts payable to the Trustee, or any director, officer, employee
or agent of the Trustee in respect of the indemnification provided by this
paragraph (a), or pursuant to any other right of reimbursement from the Trust
Fund that the Trustee, or any director, officer, employee or agent of the
Trustee may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment hereunder made by the
Master Servicer to the Trustee shall be from the Master Servicer's own funds,
without reimbursement from the Trust Fund therefor.

                  (c) The Master Servicer shall pay any annual rating agency
fees of the Rating Agencies for ongoing surveillance from its own funds without
right of reimbursement.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Seller, the Master Servicer or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                                       133

<PAGE>

                  SECTION 8.07. Resignation and Removal of the Trustee.

                  The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the NIMS
Insurer, the Master Servicer and the Certificateholders. Upon receiving such
notice of resignation of the Trustee, the Depositor shall promptly appoint a
successor trustee acceptable to the NIMS Insurer by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee and the Master Servicer by the Depositor. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the NIMS Insurer, or if at any time
the Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its respective property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its respective property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor or the NIMS Insurer may remove
the Trustee and appoint a successor trustee acceptable to the NIMS Insurer by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor trustee. A copy of such instrument shall
be delivered to the Certificateholders and the Master Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights (or the NIMS Insurer upon failure of the Trustee to perform its
obligations hereunder) may at any time remove the Trustee and appoint a
successor trustee acceptable to the NIMS Insurer by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08. Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the NIMS Insurer and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements, as well as all
moneys, held by it hereunder (other than any Mortgage Files at the time held by
a Custodian, which Custodian shall become the agent of any successor trustee
hereunder), and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other

                                       134

<PAGE>

things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by each Rating Agency, as evidenced by a letter from each Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee and the NIMS Insurer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of REMIC I, and to vest in such Person or Persons, in such capacity, such title
to REMIC I, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Master Servicer and the NIMS Insurer. If the Master Servicer and the NIMS
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to the Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in which any

                                       135

<PAGE>

particular act or acts are to be performed by the Trustee (whether as Trustee
hereunder or as successor to the Master Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to REMIC
I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Master Servicer and the NIMS Insurer.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                  SECTION 8.11. Appointment of Custodians.

                  The Trustee may, with the consent of the Depositor and the
Master Servicer appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement (provided that if expenses of the kind that would
be reimbursable to the Trustee pursuant to Section 8.05 if incurred by the
Trustee are incurred by the Custodian, the Trustee shall be entitled to
reimbursement under Section 8.05 for such kind of expenses to the extent the
Trustee has paid such expenses on behalf of the Custodian or for which the
Trustee has reimbursed the Custodian). The Trustee initially appoints the
Custodian as Custodian, and the Depositor and the Master Servicer consent to
such appointment. Subject to Article VIII hereof, the Trustee agrees to comply
with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least $10,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 11.01. In no event shall
the appointment of any Custodian pursuant to a Custodial Agreement diminish the
obligations of the Trustee hereunder.

                                       136

<PAGE>

                  SECTION 8.12. Appointment of Office or Agency.

                  The Trustee shall designate an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates and this Agreement may be
delivered. As of the Closing Date, the Trustee designates the office of its
agent located c/o DTC Transfer Agent Services, 55 Water Street, Jeanette Park
Entrance, New York, New York 10041 for such purposes.

                  SECTION 8.13. Representations and Warranties of the Trustee.

                  The Trustee hereby represents and warrants, to the Master
Servicer and the Depositor, as of the Closing Date, that:

                  (i) It is a national banking association duly organized,
         validly existing and in good standing under the laws of the United
         States.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         shall not violate its charter or bylaws or constitute a default (or an
         event which, with notice or lapse of time, or both, would constitute a
         default) under, or result in the breach of, any material agreement or
         other instrument to which it is a party or which is applicable to it or
         any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement shall not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of it to perform
         its obligations under this Agreement or its financial condition.

                  (vi) No litigation is pending or, to the best knowledge,
         threatened against it which would prohibit it from entering into this
         Agreement or, in its good faith reasonable judgment, is likely to
         materially and adversely affect either its ability to perform its
         obligations under this Agreement or its financial condition.

                                       137

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01 Termination Upon Repurchase or Liquidation of All
                               Mortgage Loans.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments in respect of the REMIC I Regular Interests, the REMIC
II Regular Interests or the Classes of Certificates as hereinafter set forth)
shall terminate upon payment to the Certificateholders and the deposit of all
amounts held by or on behalf of the Trustee and required hereunder to be so paid
or deposited on the Distribution Date coinciding with or following the earlier
to occur of (i) the purchase by the Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to greater of (A) the aggregate fair market value of all of the
assets of REMIC I and (B) the sum of the Stated Principal Balance of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and the appraised fair market value of the REO Properties plus accrued
interest through the end of the calendar month preceding the month of the final
Distribution Date and any unreimbursed Advances and Servicing Advances (in the
case of fair market values required to be determined under (A) or (B) above, as
determined by the Terminator, the Trustee and, if the Terminator is not the NIMS
Insurer, the NIMS Insurer, as of the close of business on the third Business Day
next preceding the date upon which notice of any such termination is furnished
to Certificateholders pursuant to the third paragraph of this Section 9.01);
provided, however, such option may only be exercised if the Termination Price is
sufficient to pay all interest accrued on, as well as amounts necessary to
retire the note balance of, each class of notes issued pursuant to the Indenture
and any amounts owed to the NIMS Insurer at the time the option is exercised.

                  (b) The Master Servicer (or if the Master Servicer fails to
exercise such right, the NIMS Insurer) shall have the right (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates shall be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
above only (A) if the aggregate Stated Principal Balance of the Mortgage Loans
and each REO Property remaining in the Trust Fund at the time of such election
is less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and (B) if the Terminator is the Master Servicer and is
an affiliate of the Seller, the Master Servicer shall have delivered to the
Trustee and the NIMS Insurer a written certification that the

                                       138

<PAGE>

burdens of servicing the Mortgage Loans and REO Properties remaining in REMIC I
exceed the benefits of the Servicing Fees that would be realized by the Master
Servicer if it continued to service such assets on behalf of the Trust Fund. By
acceptance of the Residual Certificates, the Holders of the Residual
Certificates agree, in connection with any termination hereunder, to pledge any
amounts in excess of par, and to the extent received in respect of such
termination, to pay any such amounts to the Holders of the Class CE
Certificates.

                  (c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund shall
terminate and final payment in respect of the REMIC I Regular Interests, the
REMIC II Regular Interests and the Certificates shall be made upon presentation
and surrender of the related Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests, the REMIC II Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in REMIC I by the Terminator, the Terminator shall deliver to
the Trustee for deposit in the Distribution Account not later than the last
Business Day preceding the final Distribution Date on the Certificates an amount
in immediately available funds equal to the above-described purchase price. Upon
certification to the Trustee by a Servicing Officer of the making of such final
deposit, the Trustee shall promptly release or cause to be released to the
Terminator the Mortgage Files for the remaining Mortgage Loans, and the Trustee
shall execute all assignments, endorsements and other instruments necessary to
effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any

                                       139

<PAGE>

such Certificates shall not have been surrendered for cancellation, the Trustee
shall pay to the Representative all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Trustee as a result of such Certificateholder's failure to
surrender its Certificate(s) for final payment thereof in accordance with this
Section 9.01.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.

                  SECTION 9.02 Additional Termination Requirements.

                  (a) In the event that the Terminator purchases all the
         Mortgage Loans and each REO Property or the final payment on or other
         liquidation of the last Mortgage Loan or REO Property remaining in
         REMIC I pursuant to Section 9.01, the Trust Fund shall be terminated in
         accordance with the following additional requirements:

                  (i) The Trustee shall specify the first day in the 90-day
         liquidation period in a statement attached to each Trust REMIC's final
         Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
         satisfy all requirements of a qualified liquidation under Section 860F
         of the Code and any regulations thereunder, as evidenced by an Opinion
         of Counsel obtained at the expense of the Terminator;

                  (ii) During such 90-day liquidation period, and at or prior to
         the time of making of the final payment on the Certificates, the
         Trustee shall sell all of the assets of REMIC I to the Terminator for
         cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the Residual Certificates
         all cash on hand in the Trust Fund (other than cash retained to meet
         claims), and the Trust Fund shall terminate at that time.

                  (b) At the expense of the applicable Terminator (or in the
         event of termination under Section 9.01(a)(ii), at the expense of the
         Trustee), the Trustee shall prepare or cause to be prepared the
         documentation required in connection with the adoption of a plan of
         liquidation of each Trust REMIC pursuant to this Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
         hereby agree to authorize the Trustee to specify the 90-day liquidation
         period for each Trust REMIC which authorization shall be binding upon
         all successor Certificateholders.

                                       140

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01. REMIC Administration.

                  (a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election shall be made by the Trustee on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of REMIC I, (i) the
REMIC I Regular Interests shall be designated as the Regular Interests in REMIC
I and (ii) the Class R-I Interest shall be designated as the Residual Interest
in REMIC I. The Class A Certificates and the Mezzanine Certificates (exclusive
of any right to receive payments from the Net WAC Rate Carryover Reserve
Account), the Class CE Interest and the Class P Interest shall be designated as
the Regular Interests in REMIC II and the Class R-II Interest shall be
designated as the Residual Interest in REMIC II. The Class CE Certificates shall
be designated as the Regular Interests in REMIC III and the Class R-III Interest
shall be designated as the Regular Interests in REMIC IV and the Class R-IV
Interest shall be designated as the Residual Interest in REMIC IV. The Trustee
shall not permit the creation of any "interests" in any Trust REMIC (within the
meaning of Section 860G of the Code) other than the REMIC I Regular Interests,
Class CE Interest, Class P Interest and the interests represented by the
Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of REMIC I and REMIC II and September 27, 2004 is hereby designated as the
"Startup Day" of REMIC III and REMIC IV within the meaning of Section 860G(a)(9)
of the Code.

                  (c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund caused by the Trustee (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect to
any Trust REMIC that involve the Internal Revenue Service or state tax
authorities), other than the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Trustee, as agent for each Trust REMIC's
tax matters person, shall (i) act on behalf of the Trust Fund in relation to any
tax matter or controversy involving any Trust REMIC and (ii) represent the Trust
Fund in any administrative or judicial proceeding relating to an examination or
audit by any governmental taxing authority with respect thereto. The Holder of
the largest Percentage Interest of each Class of Residual Certificates shall be
designated, in the manner provided under Treasury regulations section
1.860F-4(d) and Treasury regulations section 301.6231(a)(7)-1, as the tax
matters person of the related REMIC created hereunder. By their acceptance
thereof, the Holder of the largest Percentage Interest of the Residual
Certificates hereby agrees to irrevocably appoint the Trustee or an Affiliate as
its agent to perform all of the duties of the tax matters person for the Trust
Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust

                                       141

<PAGE>

Fund as is in its possession and reasonably required by the Trustee to enable it
to perform its obligations under this Article.

                  (e) The Trustee shall perform on behalf of each Trust REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, as required by the Code, the REMIC Provisions or other
such compliance guidance, the Trustee shall provide (i) to any Transferor of a
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual Certificate to any Person who is not
a Permitted Transferee, (ii) to the Certificateholders such information or
reports as are required by the Code or the REMIC Provisions including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption as required) and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who shall
serve as the representative of each Trust REMIC. The Master Servicer shall
provide on a timely basis to the Trustee such information with respect to the
assets of the Trust Fund, including, without limitation, the Mortgage Loans, as
is in its possession and reasonably required by the Trustee to enable each of
them to perform their respective obligations under this subsection. In addition,
the Depositor shall provide or cause to be provided to the Trustee, within ten
(10) days after the Closing Date, all information or data that the Trustee
reasonably determines to be relevant for tax purposes as to the valuations and
issue prices of the Certificates, including, without limitation, the price,
yield, prepayment assumption and projected cash flow of the Certificates.

                  (f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of any Trust REMIC as a REMIC or (ii) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee and the NIMS Insurer have
received an Opinion of Counsel, addressed to the Trustee (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee)
to the effect that the contemplated action shall not, with respect to any Trust
REMIC, endanger such status or result in the imposition of such a tax, nor shall
the Master Servicer take or fail to take any action (whether or not authorized
hereunder) as to which the Trustee and the NIMS Insurer has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse
REMIC Event could occur with respect to such action. In addition, prior to
taking any action with respect to any Trust REMIC or the respective assets of
each, or causing any Trust REMIC to take any action, which is not contemplated
under the terms of this Agreement, the Master Servicer will consult with the
Trustee, the NIMS Insurer or its designee, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to any
Trust REMIC, and the Master Servicer shall not take any such action or cause any
Trust REMIC to take any such action as to which the Trustee or the NIMS Insurer
has advised it in writing that an Adverse REMIC Event could occur. The Trustee
or the NIMS Insurer may consult with counsel to make such written advice, and
the cost of same shall be borne by the party seeking to take the action not

                                       142

<PAGE>

permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee. At all times as may be required by the Code, the Master Servicer
(in its capacity as Seller) on behalf of the Trustee shall ensure that
substantially all of the assets of any Trust REMIC shall consist of "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined in Section 860G(a)(5) of the Code.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any Trust REMIC created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of such
REMIC as defined in Section 860G(c) of the Code, on any contributions to any
such REMIC after the Startup Day therefor pursuant to Section 860G(d) of the
Code, or any other tax is imposed by the Code or any applicable provisions of
state or local tax laws, such tax shall be charged (i) to the Trustee pursuant
to Section 10.03 hereof, if such tax arises out of or results from a breach by
the Trustee of any of its obligations under this Article X, (ii) to the Master
Servicer pursuant to Section 10.03 hereof, if such tax arises out of or results
from a breach by the Master Servicer of any of its obligations under Article III
or this Article X, or otherwise (iii) against amounts on deposit in the
Distribution Account and shall be paid by withdrawal therefrom.

                  (h) On or before April 15th of each calendar year, commencing
April 15, 2005, the Trustee shall deliver to the Master Servicer, the NIMS
Insurer and each Rating Agency a Certificate from a Responsible Officer of the
Trustee stating, without regard to any action taken by any party other than the
Trustee, the Trustee's compliance with this Article X.

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each Trust REMIC on a calendar year
and on an accrual basis. The Trustee shall apply for an Employer Identification
Number for the Trust Fund from the Internal Revenue Service via a Form SS-4 or
such other form as is appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any Trust REMIC other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund shall not cause the related REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject such REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any Trust REMIC shall receive a fee or other
compensation for services nor permit any such REMIC to receive any income from
assets other than the Mortgage Pool which are deemed to constitute "qualified
mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.

                  SECTION 10.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to

                                       143

<PAGE>

Article IX of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a purchase of Mortgage Loans pursuant to Article II or III of
this Agreement), or acquire any assets for any Trust REMIC (other than REO
Property acquired in respect of a defaulted Mortgage Loan), or sell or dispose
of any investments in the Collection Account or the Distribution Account for
gain, or accept any contributions to any Trust REMIC after the Closing Date
(other than a Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.03), unless it has received an Opinion of Counsel, addressed to the
Trustee and the NIMS Insurer (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution shall not (a) affect adversely the status of any
Trust REMIC as a REMIC or (b) cause any Trust REMIC to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.

                  SECTION 10.03. Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the NIMS
Insurer, the Depositor and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, caused solely
by the Trustee's failure to act in accordance with its standard of care set
forth in this Article X or any state, local or franchise taxes imposed upon the
Trust as a result of the location of the Trustee.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the NIMS Insurer, the Depositor and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor or the Trustee, as a result of a
breach of the Master Servicer's covenants set forth in Article III or this
Article X or any state, local or franchise taxes imposed upon the Trust as a
result of the location of the Master Servicer or any subservicer.

                                       144

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                   This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Trustee and, if
applicable, the Custodian with the consent of the NIMS Insurer and without the
consent of any of the Certificateholders, (i) to cure any ambiguity or defect,
(ii) to correct, modify or supplement any provisions herein (including to give
effect to the expectations of Certificateholders), or in any Custodial
Agreement, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or in any Custodial Agreement which shall
not be inconsistent with the provisions of this Agreement or such Custodial
Agreement, provided that such action shall not adversely affect in any material
respect the interests of any Certificateholder, as evidenced by either (i) an
Opinion of Counsel delivered to the Master Servicer and the Trustee to such
effect or (ii) confirmation from the Rating Agencies that such amendment shall
not result in the reduction or withdrawal of the rating of any outstanding Class
of Certificates. No amendment shall be deemed to adversely affect in any
material respect the interests of any Certificateholder who shall have consented
thereto, and no Opinion of Counsel shall be required to address the effect of
any such amendment on any such consenting Certificateholder.

                   This Agreement or any Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer, the NIMS Insurer and
the Trustee with the consent of the NIMS Insurer and the Holders of Certificates
entitled to at least 66% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates (as evidenced by either (i) an Opinion of Counsel
delivered to the Trustee or (ii) written notice to the Depositor, the Master
Servicer and the Trustee from the Rating Agencies that such action shall not
result in the reduction or withdrawal of the rating of any outstanding Class of
Certificates with respect to which it is a Rating Agency) in a manner other than
as described in (i), or (iii) modify the consents required by the immediately
preceding clauses (i) and (ii) without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the NIMS Insurer shall consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel satisfactory
to the NIMS Insurer to the effect that such amendment shall not result in the
imposition of any tax on any Trust REMIC pursuant to the REMIC Provisions or
cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.

                                       145

<PAGE>

                  Notwithstanding any of the other provisions of this Section
11.01, none of the Depositor, the Master Servicer or the Trustee shall enter
into any amendment of this Agreement that would significantly change the
permitted activities of the Trust Fund without the consent of the NIMS Insurer
and the Holders of Certificates that represent more than 50.00% of the aggregate
Certificate Principal Balance of all Certificates.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its respective rights, duties
and immunities under this Agreement or otherwise.

                  SECTION 11.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 11.03. Limitation on Rights of Certificateholders.

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

                                       146

<PAGE>

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in the name of the Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 11.04. Governing Law.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws excluding the choice
of laws provisions therein.

                  SECTION 11.05. Notices.

                  All directions, demands, requests, authorizations and notices
hereunder shall be in writing and shall be deemed to have been duly given when
received if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service, facsimile, electronic mail or delivered
in any other manner specified herein, to (a) in the case of the Depositor, 1100
Town & Country Road, Suite 1100, Orange, California 92868, Attention: Capital
Markets (telecopy number: (714) 245-0198), or such other address or telecopy
number as may hereafter be furnished to the Master Servicer, the NIMS Insurer
and the Trustee in writing by the Depositor, (b) in the case of the Master
Servicer, 1100 Town & Country Road, 11th Floor, Orange, California 92868,
Attention: General Counsel (telecopy number: (714) 564-9639), or such other
address or telecopy number as may hereafter be furnished to the Trustee, the
NIMS Insurer and the Depositor in writing by the Master Servicer, (c) in the
case of the Trustee, Deutsche Bank National Trust Company, 1761 East St. Andrew
Place, Santa Ana, California 92705-4934, Attention: Trust Administration-AQ04I1

                                       147

<PAGE>

(telecopy number: (714) 247-6009), or such other address or telecopy number as
may hereafter be furnished to the Master Servicer, the NIMS Insurer and the
Depositor in writing by the Trustee and (d) in the case of the NIMS Insurer,
such address furnished to the Depositor, the Master Servicer and the Trustee in
writing by the NIMS Insurer. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.

                  SECTION 11.06. Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION 11.07. Notice to Rating Agencies and the NIMS Insurer.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies and the NIMS Insurer with respect to each of the
following of which it has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Master Servicer Event of Default that
         has not been cured or waived;

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

                  4. The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03;

                  5. The final payment to the Holders of any Class of
         Certificates;

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

                  7. Any event that would result in the inability of the
         Trustee, were it to succeed as Master Servicer, to make advances
         regarding delinquent Mortgage Loans; and

                  8. The filing of any claim under the Master Servicer's blanket
         bond and errors and omissions insurance policy required by Section 3.09
         or the cancellation or material modification of coverage under any such
         instrument.

                                       148

<PAGE>

                  In addition, the Trustee shall promptly furnish to each Rating
Agency and the NIMS Insurer copies of each report to Certificateholders
described in Section 4.02 and the Master Servicer, as required pursuant to
Section 3.19 and Section 3.20, shall promptly furnish to each Rating Agency
copies of the following:

                  1. Each annual statement as to compliance described in Section
         3.19; and

                  2. Each annual independent public accountants' servicing
         report described in Section 3.20.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Fitch Ratings, One State Street Plaza, New York, New York 10004 and to
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., 55 Water Street, New York, New York 10041, or such other addresses as the
Rating Agencies may designate in writing to the parties hereto.

                  SECTION 11.08. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor or the Seller. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor or the Seller, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor
or the Seller and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 hereof shall be deemed to be a grant by the Seller
and the Depositor to the Trustee of a security interest in all of the Seller's
and the Depositor's right, title and interest in and to the Mortgage Loans and
all amounts payable to the Holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest

                                       149

<PAGE>

under applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the Trustee
on behalf of the Certificateholders the performance by the Depositor of the
obligations described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
and the transfer pursuant to the Mortgage Loan Purchase Agreement to be a true,
absolute and unconditional sale of the Mortgage Loans and assets constituting
the Trust Fund by the Depositor to the Trustee.

                  SECTION 11.10 Third Party Rights.

                  The NIMS Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.

                                       150

<PAGE>

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

                                           AMERIQUEST MORTGAGE SECURITIES INC.,
                                           as Depositor

                                           By: /s/ John P. Grazer
                                              ---------------------------------
                                           Name:   John P. Grazer
                                           Title:  CFO

                                           AMERIQUEST MORTGAGE COMPANY,
                                             as Master Servicer

                                           By: /s/ John P. Grazer
                                              ---------------------------------
                                           Name:   John P. Grazer
                                           Title:  EVP

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                             as Trustee

                                           By: /s/ Ronaldo Reyes
                                              ---------------------------------
                                           Name:   Ronaldo Reyes
                                           Title:  Assistant Vice President

                                           By: /s/ Brent Hoyler
                                              ---------------------------------
                                           Name:   Brent Hoyler
                                           Title:  Associate

<PAGE>

STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )

                  On the ___ day of _________2004, before me, a notary public in
and for said State, personally appeared ____________, known to me to be an
________________ of Ameriquest Mortgage Securities Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                                _________________________
                                                     Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )

                  On the __th day of _________ 2004, before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a _________________ of Ameriquest Mortgage Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                                _________________________
                                                     Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA                         )
                                            ) ss.:
COUNTY OF                                   )

                  On the ___ day of _________ 2004, before me, a notary public
in and for said State, personally appeared _________________, known to me to be
an ____________________ of Deutsche Bank National Trust Company, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

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

                                                _________________________
                                                     Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1

                          FORM OF CLASS A-1 CERTIFICATE

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

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class A-1                 Aggregate Certificate Principal Balance of the
                                           Class A-1 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $141,400,000.00

Date of Pooling and Servicing Agreement    Denomination: $141,400,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP: 03072S UY 9
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

                                      A-1-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class A-1 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  A-1  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class A-1 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                      A-1-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 0.280% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
0.560%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                      A-1-3
<PAGE>
          No  service  charge will be made for any such registration of transfer
or  exchange  of  Certificates,  but  the  Trustee  may require payment of a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  transfer  or  exchange  of  Certificates.

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-1-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      B-1-6
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                  <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -    Custodian
                                                                      -----------
                                                                    (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                       under Uniform Gifts
                                                                    to Minors Act
     JT TEN  -   as joint tenants with right if                     _________________
                 survivorship  and  not  as                              (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                 Signature  Guaranteed

                                      A-1-7
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-1-8
<PAGE>
                                   EXHIBIT A-2

                          FORM OF CLASS A-2 CERTIFICATE

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

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class A-2                 Aggregate Certificate Principal Balance of the
                                           Class A-2 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $57,400,000.00

Date of Pooling and Servicing Agreement    Denomination: $57,400,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP: 03072S UZ 6
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

                                      A-2-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class A-2 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  A-2  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class A-2 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and  only  upon  presentation  and  surrender  of

                                      A-2-2
<PAGE>
this  Certificate  at  the  office  or  agency appointed by the Trustee for that
purpose  as  provided  in  the  Agreement.

          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for  this Certificate is 0.17% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
0.34%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

                                      A-2-3
<PAGE>
          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                      A-2-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      A-2-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                  <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -    Custodian
                                                                      -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-2-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-2-7
<PAGE>
                                   EXHIBIT A-3

                          FORM OF CLASS A-3 CERTIFICATE

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

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class A-3                 Aggregate Certificate Principal Balance of the
                                           Class A-3 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $51,705,000.00

Date of Pooling and Servicing Agreement    Denomination: $51,705,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP:  03072S VA 0
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

                                      A-3-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class A-3 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  A-3  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class A-3 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                      A-3-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 0.320% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
0.640%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                      A-3-3
<PAGE>
          No  service  charge will be made for any such registration of transfer
or  exchange  of  Certificates,  but  the  Trustee  may require payment of a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  transfer  or  exchange  of  Certificates.

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                      A-3-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      A-3-6
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                            (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-3-7
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-3-8
<PAGE>
                                   EXHIBIT A-4

                          FORM OF CLASS M-1 CERTIFICATE

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

     THIS  CERTIFICATE  IS  SUBORDINATE  TO  THE CLASS A CERTIFICATES THE EXTENT
     DESCRIBED  IN  THE  POOLING  AND  SERVICING  AGREEMENT  REFERRED TO HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-1                 Aggregate Certificate Principal Balance of the
                                           Class M-1 Certificates as of the Issue Date: $
Pass-Through Rate: Variable                11,250,000.00

Date of Pooling and Servicing Agreement    Denomination: $11,250,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP:  03072S VB 8
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                      A-4-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-1 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-1  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-1 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                      A-4-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 0.620% in the case of
each  Distribution  Date  through  and  including  Optional Termination Date, or
0.930%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are

                                      A-4-3
<PAGE>
exchangeable  for new Certificates of the same Class in authorized denominations
evidencing  the  same  aggregate Percentage Interest, as requested by the Holder
surrendering  the  same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-4-4
<PAGE>
          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      A-4-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                  <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                            (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-4-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-4-7
<PAGE>
                                   EXHIBIT A-5

                          FORM OF CLASS M-2 CERTIFICATE

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

     THIS  CERTIFICATE  IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE CLASS
     M-1  CERTIFICATES  TO  THE  EXTENT  DESCRIBED  IN THE POOLING AND SERVICING
     AGREEMENT  REFERRED  TO  HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-2                 Aggregate Certificate Principal Balance of the
                                           Class M-2 Certificates as of the Issue Date: $
Pass-Through Rate: Variable                $10,650,000.00

Date of Pooling and Servicing Agreement    Denomination: $$  10,650,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP: 03072S VC 6
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                      A-5-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-2 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-2  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-2 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                      A-5-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 0.650% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
0.975%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are

                                      A-5-3
<PAGE>
exchangeable  for new Certificates of the same Class in authorized denominations
evidencing  the  same  aggregate Percentage Interest, as requested by the Holder
surrendering  the  same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                      A-5-4
<PAGE>
          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      A-5-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                  <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-5-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-5-7
<PAGE>
                                   EXHIBIT A-6

                          FORM OF CLASS M-3 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
     CERTIFICATES  AND THE CLASS M-2 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
     POOLING  AND  SERVICING  AGREEMENT  REFERRED  TO  HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-3                 Aggregate Certificate Principal Balance of the
                                           Class M-3 Certificates as of the Issue Date: $
Pass-Through Rate: Variable                $3,300,000.00

Date of Pooling and Servicing Agreement    Denomination: $3,300,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP: 03072S VD 4
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                      A-6-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-3 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-3  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-3 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                      A-6-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 0.680% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
1.020%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are

                                      A-6-3
<PAGE>
exchangeable  for new Certificates of the same Class in authorized denominations
evidencing  the  same  aggregate Percentage Interest, as requested by the Holder
surrendering  the  same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-6-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized Signatory

                                      A-6-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                  <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -    Custodian
                                                                      -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-6-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-6-7
<PAGE>
                                   EXHIBIT A-7

                          FORM OF CLASS M-4 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
     CERTIFICATES,  THE CLASS M-2 CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO
     THE  EXTENT  DESCRIBED  IN  THE POOLING AND SERVICING AGREEMENT REFERRED TO
     HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-4                 Aggregate Certificate Principal Balance of the
                                           Class M-4 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $6,900,000.00

Date of Pooling and Servicing Agreement    Denomination: $6,900,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP:  03072S VE 2
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                      A-7-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-4 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-4  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-4 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                      A-7-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 1.170% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
1.755%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are

                                      A-7-3
<PAGE>
exchangeable  for new Certificates of the same Class in authorized denominations
evidencing  the  same  aggregate Percentage Interest, as requested by the Holder
surrendering  the  same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                      A-7-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated: _______________, 2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      A-7-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                            (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-7-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-7-7
<PAGE>
                                   EXHIBIT A-8

                          FORM OF CLASS M-5 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
     CERTIFICATES,  THE  CLASS  M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES AND
     THE  CLASS  M-4  CERTIFICATES  TO  THE  EXTENT DESCRIBED IN THE POOLING AND
     SERVICING  AGREEMENT  REFERRED  TO  HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-5                 Aggregate Certificate Principal Balance of the
                                           Class M-5 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $2,850,000.00

Date of Pooling and Servicing Agreement    Denomination: $2,850,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP:  03072S VF 9
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                      A-8-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-5 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-5  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-5 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                      A-8-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 1.400% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
2.100%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are

                                      A-8-3
<PAGE>
exchangeable  for new Certificates of the same Class in authorized denominations
evidencing  the  same  aggregate Percentage Interest, as requested by the Holder
surrendering  the  same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-8-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      A-8-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                  <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-8-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-8-7
<PAGE>
                                   EXHIBIT A-9

                          FORM OF CLASS M-6 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
     CERTIFICATES,  THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES , THE
     CLASS  M-4  CERTIFICATES  AND  THE  CLASS  M-5  CERTIFICATES  TO THE EXTENT
     DESCRIBED  IN  THE  POOLING  AND  SERVICING  AGREEMENT  REFERRED TO HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-6                 Aggregate Certificate Principal Balance of the
                                           Class M-6 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $2,700,000.00

Date of Pooling and Servicing Agreement    Denomination: $2,700,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP:  03072S VG 7
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                      A-9-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-6 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-6  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-6 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and  only  upon  presentation  and  surrender  of

                                      A-9-2
<PAGE>
this  Certificate  at  the  office  or  agency appointed by the Trustee for that
purpose  as  provided  in  the  Agreement.

          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 1.800% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
2.700%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

                                      A-9-3
<PAGE>
          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                      A-9-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                      A-9-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                      A-9-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                      A-9-7
<PAGE>
                                  EXHIBIT A-10

                          FORM OF CLASS M-7 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
     CERTIFICATES,  THE  CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE
     CLASS  M-4  CERTIFICATES,  THE  CLASS  M-5  CERTIFICATES, AND THE CLASS M-6
     CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
     REFERRED  TO  HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-7                 Aggregate Certificate Principal Balance of the
                                           Class M-7 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $2,100,000.00

Date of Pooling and Servicing Agreement    Denomination: $2,100,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust Company

                                           Issue Date: September 20, 2004

                                           CUSIP:  03072S VH 5
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                     A-10-1
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-7 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-7  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-7 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                     A-10-2
<PAGE>
          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 1.900% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
2.850%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are

                                     A-10-3
<PAGE>
exchangeable  for new Certificates of the same Class in authorized denominations
evidencing  the  same  aggregate Percentage Interest, as requested by the Holder
surrendering  the  same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-10-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                     A-10-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                     A-10-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                     A-10-7
<PAGE>
                                  EXHIBIT A-11

                          FORM OF CLASS M-8 CERTIFICATE

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

     THIS  CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS M-1
     CERTIFICATES,  THE  CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE
     CLASS  M-4  CERTIFICATES,  THE  CLASS  M-5  CERTIFICATES,  THE  CLASS  M-6
     CERTIFICATES  AND THE CLASS M-7 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
     POOLING  AND  SERVICING  AGREEMENT  REFERRED  TO  HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-8                 Aggregate Certificate Principal Balance of the
                                           Class M-8 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $3,150,000.00

Date of Pooling and Servicing Agreement    Denomination: $3,150,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP: 03072S VJ 1
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME SECURITY

                                     A-11-1
<PAGE>
     ACT OF 1974, AS AMENDED ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN
     COMPLIANCE  WITH  THE  PROCEDURES  DESCRIBED  HEREIN.

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-8 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-8  Certificates in a REMIC  created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class M-8 Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register.

                                     A-11-2
<PAGE>
Notwithstanding  the  above,  the final distribution on this Certificate will be
made  after  due  notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed  by  the  Trustee  for  that  purpose  as  provided  in the Agreement.

          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 3.000% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
4.500%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

                                     A-11-3
<PAGE>
          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                     A-11-4
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                     A-11-5
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                     A-11-6
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                     A-11-7
<PAGE>
                                  EXHIBIT A-12

                          FORM OF CLASS M-9 CERTIFICATE

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

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
     M-1  CERTIFICATES,  THE  CLASS  M-2  CERTIFICATES,  THE  CLASS  M-3
     CERTIFICATES,  THE CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES,
     THE  CLASS  M-6 CERTIFICATES, THE CLASS M-7 CERTIFICATES AND THE CLASS
     M-8  CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
     AGREEMENT  REFERRED  TO  HEREIN.

     THIS  CERTIFICATE  HAS  NOT  BEEN  AND  WILL  NOT  BE  REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
     MAY  NOT  BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH
     ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
     REGISTRATION  UNDER  SUCH  ACT  AND  UNDER  APPLICABLE  STATE  LAW  AND  IS
     TRANSFERRED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF  SECTION 5.02 OF THE
     AGREEMENT.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class M-9                 Aggregate Certificate Principal Balance of the
                                           Class M-9 Certificates as of the Issue Date:
Pass-Through Rate: Variable                $2,250,000.00

Date of Pooling and Servicing Agreement    Denomination: $2,250,000.00
and Cut-off Date: September 1, 2004
                                           Master Servicer: Ameriquest Mortgage
First Distribution Date: October 25, 2004  Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004

                                           CUSIP:  03072S VK 8
</TABLE>

                                     A-12-1
<PAGE>
     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest  (obtained  by  dividing  the  denomination  of this Certificate by the
aggregate  Certificate Principal Balance of the Class M-9 Certificates as of the
Issue  Date)  in that certain beneficial ownership interest evidenced by all the
Class  M-9  Certificates  in a REMIC created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities  Inc.  (hereinafter  called  the "Depositor," which term includes any
successor  entity  under  the Agreement), the Master Servicer and the Trustee, a
summary  of certain of the pertinent provisions of which is set forth hereafter.
To  the  extent  not  defined herein, the capitalized terms used herein have the
meanings  assigned  in  the  Agreement.  This Certificate is issued under and is
subject  to  the  terms,  provisions  and  conditions of the Agreement, to which
Agreement  the  Holder  of  this  Certificate by virtue of the acceptance hereof
assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is  registered  on  the  Record  Date,  in  an  amount  equal  to

                                     A-12-2
<PAGE>
the  product  of  the  Percentage Interest evidenced by this Certificate and the
amount  required  to  be distributed to the Holders of Class M-9 Certificates on
such  Distribution  Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

          The  Pass-Through  Rate  applicable  to  the  calculation  of interest
payable  with  respect to this Certificate on any Distribution Date shall be the
lesser  of  (x)  the related Formula Rate for such Distribution Date and (y) the
Net WAC Pass-Through Rate for such Distribution Date.  For any Distribution Date
and  this  Certificate, the Formula Rate is One-Month LIBOR plus the Certificate
Margin.  The  Certificate  Margin  for this Certificate is 2.500% in the case of
each  Distribution  Date through and including the Optional Termination Date, or
3.750%,  in  the  case  of  any  Distribution  Date  thereafter.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

                                     A-12-3
<PAGE>
          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

                                     A-12-4
<PAGE>
          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                     A-12-5
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                     A-12-6
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                            (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                     A-12-7
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                     A-12-8
<PAGE>
                                  EXHIBIT A-13

                          FORM OF CLASS CE CERTIFICATE

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

     THIS  CERTIFICATE  IS  SUBORDINATE  TO THE A CERTIFICATES AND THE MEZZANINE
     CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
     REFERRED  TO  HEREIN.

     ANY  RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
     ONLY  IN  ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
     SERVICING  AGREEMENT  REFERRED  TO  HEREIN.

     THIS  CERTIFICATE  HAS  NOT  BEEN  AND  WILL  NOT  BE  REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
     MAY  NOT  BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH
     ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
     REGISTRATION  UNDER  SUCH  ACT  AND  UNDER  APPLICABLE  STATE  LAW  AND  IS
     TRANSFERRED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF  SECTION 5.02 OF THE
     AGREEMENT.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                     A-13-1
<PAGE>
<TABLE>
<CAPTION>
<S>                                          <C>
                                             Initial Notional Amount of the Class CE
Series 2004-IA1, Class CE                    Certificates as of the Issue Date:
                                             $300,005,332.11
Date of Pooling and Servicing Agreement and
Cut-off Date: September 1, 2004              Initial Certificate Principal Balance:
                                             $4,350,232.11
First Distribution Date: October 25, 2004
                                             Master Servicer: Ameriquest Mortgage
No. 1                                        Company

                                             Trustee: Deutsche Bank National Trust
                                             Company

                                             Issue Date: September 20, 2004
</TABLE>

     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

                                     A-13-2
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This  certifies  that  Ameriquest  Mortgage  Company is the registered
owner  of  a  Percentage Interest (obtained by dividing the denomination of this
Certificate  by  the  aggregate  Certificate  Principal  Balance of the Class CE
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced  by  all  the  Class  CE Certificates in a REMIC created pursuant to a
Pooling  and  Servicing  Agreement,  dated as specified above (the "Agreement"),
among  Ameriquest  Mortgage Securities Inc. (hereinafter called the "Depositor,"
which  term  includes  any  successor  entity  under  the Agreement), the Master
Servicer  and  the  Trustee, a summary of certain of the pertinent provisions of
which  is set forth hereafter. To the extent not defined herein, the capitalized
terms  used herein have the meanings assigned in the Agreement. This Certificate
is  issued  under  and is subject to the terms, provisions and conditions of the
Agreement,  to  which  Agreement the Holder of this Certificate by virtue of the
acceptance  hereof  assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be  distributed to the Holders of Class CE Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                     A-13-3
<PAGE>
          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No  transfer  of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933,  as  amended  (the  "1933  Act"),  and  an  effective  registration  or
qualification  under  applicable  state  securities  laws,  or  is  made  in  a
transaction  that  does  not  require such registration or qualification. In the
event  that  such  a  transfer  of  this  Certificate  is  to  be  made  without
registration  or  qualification, the Trustee and the Certificate Registrar shall
require  receipt  of  (i)  if  such  transfer  is  purportedly  being  made

                                     A-13-4
<PAGE>
in  reliance  upon Rule 144A under the 1933 Act, written certifications from the
Holder  of  the  Certificate  desiring  to  effect  the  transfer, and from such
Holder's  prospective  transferee,  substantially  in  the forms attached to the
Agreement  as  Exhibit  F-1,  and (ii) in all other cases, an Opinion of Counsel
satisfactory  to  it that such transfer may be made without such registration or
qualification  (which  Opinion  of  Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder  of  the Certificate desiring to effect the transfer and/or such Holder's
prospective  transferee upon which such Opinion of Counsel is based. None of the
Depositor,  the Certificate Registrar or the Trustee is obligated to register or
qualify  the  Class  of Certificates specified on the face hereof under the 1933
Act  or  any  other  securities law or to take any action not otherwise required
under  the  Agreement  to  permit  the  transfer  of  such  Certificates without
registration  or qualification. Any Holder desiring to effect a transfer of this
Certificate  shall  be  required  to  indemnify  the Trustee, the Depositor, the
Certificate  Registrar  and  the  Master Servicer against any liability that may
result  if  the transfer is not so exempt or is not made in accordance with such
federal  and  state  laws.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

          No  service  charge will be made for any such registration of transfer
or  exchange  of Certificates, but the Certificate Registrar may require payment
of  a  sum  sufficient to cover any tax or other governmental charge that may be
imposed  in  connection  with  any  transfer  or  exchange  of  Certificates.

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

                                     A-13-5
<PAGE>
          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                     A-13-6
<PAGE>
          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                     A-13-7
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -  Custodian
                                                                    -----------
                                                                    (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                       under Uniform Gifts
                                                                    to Minors Act
     JT TEN  -   as joint tenants with right if                     _________________
                 survivorship  and  not  as                             (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                     A-13-8
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                     A-13-9
<PAGE>
                                  EXHIBIT A-14

                           FORM OF CLASS P CERTIFICATE

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

     THIS  CERTIFICATE  HAS  NOT  BEEN  AND  WILL  NOT  BE  REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
     MAY  NOT  BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH
     ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
     REGISTRATION  UNDER  SUCH  ACT  AND  UNDER  APPLICABLE  STATE  LAW  AND  IS
     TRANSFERRED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF  SECTION 5.02 OF THE
     AGREEMENT.

     ANY  RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
     ONLY  IN  ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
     SERVICING  AGREEMENT  REFERRED  TO  HEREIN.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class P                   Aggregate Certificate Principal Balance of the
                                           Class P Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement    $100.00
and Cut-off Date: September 1, 2004
                                           Denomination: $100.00
First Distribution Date: October 25, 2004
                                           Master Servicer: Ameriquest Mortgage
No. 1                                      Company

                                           Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004
</TABLE>

                                     A-14-1
<PAGE>
     DISTRIBUTIONS  IN  REDUCTION  OF  THE CERTIFICATE PRINCIPAL BALANCE OF THIS
     CERTIFICATE  MAY  BE  MADE  MONTHLY  AS  SET FORTH HEREIN. ACCORDINGLY, THE
     OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
     THAN  THE  AMOUNT  SHOWN  ABOVE  AS  THE  DENOMINATION OF THIS CERTIFICATE.

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This  certifies  that  Ameriquest  Mortgage  Company is the registered
owner  of  a  Percentage Interest (obtained by dividing the denomination of this
Certificate  by  the  aggregate  Certificate  Principal  Balance  of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced  by  all  the  Class  P  Certificates in a REMIC created pursuant to a
Pooling  and  Servicing  Agreement,  dated as specified above (the "Agreement"),
among  Ameriquest  Mortgage Securities Inc. (hereinafter called the "Depositor,"
which  term  includes  any  successor  entity  under  the Agreement), the Master
Servicer  and  the  Trustee, a summary of certain of the pertinent provisions of
which  is set forth hereafter. To the extent not defined herein, the capitalized
terms  used herein have the meanings assigned in the Agreement. This Certificate
is  issued  under  and is subject to the terms, provisions and conditions of the
Agreement,  to  which  Agreement the Holder of this Certificate by virtue of the
acceptance  hereof  assents  and  by  which  such  Holder  is  bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be  distributed  to the Holders of Class P Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately

                                     A-14-2
<PAGE>
available  funds  to  the  account of the Person entitled thereto if such Person
shall  have so notified the Trustee in writing at least five Business Days prior
to  the  Record Date immediately prior to such Distribution Date or otherwise by
check  mailed by first class mail to the address of the Person entitled thereto,
as  such  name  and  address  shall  appear  on  the  Certificate  Register.
Notwithstanding  the  above,  the final distribution on this Certificate will be
made  after  due  notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed  by  the  Trustee  for  that  purpose  as  provided  in the Agreement.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are

                                     A-14-3
<PAGE>
exchangeable  for new Certificates of the same Class in authorized denominations
evidencing  the  same  aggregate Percentage Interest, as requested by the Holder
surrendering  the  same.

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

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

          No  service  charge will be made for any such registration of transfer
or  exchange  of Certificates, but the Certificate Registrar may require payment
of  a  sum  sufficient to cover any tax or other governmental charge that may be
imposed  in  connection  with  any  transfer  or  exchange  of  Certificates.

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price

                                     A-14-4
<PAGE>
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                     A-14-5
<PAGE>
     IN  WITNESS  WHEREOF,  the  Trustee  has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                     A-14-6
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -    Custodian
                                                                      -----------
                                                                    (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                       under Uniform Gifts
                                                                    to Minors Act
     JT TEN  -   as joint tenants with right if                     _________________
                 survivorship  and  not  as                               (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                     A-14-7
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                     A-14-8
<PAGE>
                                  EXHIBIT A-15

                           FORM OF CLASS R CERTIFICATE

     THIS  CERTIFICATE  MAY  NOT  BE TRANSFERRED TO A NON- UNITED STATES PERSON.

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

     THIS  CERTIFICATE  HAS  NOT  BEEN  AND  WILL  NOT  BE  REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
     MAY  NOT  BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH
     ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
     REGISTRATION  UNDER  SUCH  ACT  AND  UNDER  APPLICABLE  STATE  LAW  AND  IS
     TRANSFERRED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF  SECTION 5.02 OF THE
     AGREEMENT.

     ANY  RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
     ONLY  IN  ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
     SERVICING  AGREEMENT  REFERRED  TO  HEREIN.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                     A-15-1
<PAGE>
     ANY  RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
     ONLY  IF  THE  PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE
     THAT  (A)  SUCH  TRANSFEREE  IS NOT (1) THE UNITED STATES OR ANY POSSESSION
     THEREOF,  ANY  STATE  OR  POLITICAL  SUBDIVISION  THEREOF,  ANY  FOREIGN
     GOVERNMENT,  ANY  INTERNATIONAL  ORGANIZATION,  OR  ANY  AGENCY  OR
     INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
     COOPERATIVE  DESCRIBED  IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE
     TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO
     THE  TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED
     IN  SECTION  1381(A)(2)(C)  OF  THE  CODE (ANY SUCH PERSON DESCRIBED IN THE
     FOREGOING  CLAUSES  (1),  (2)  OR (3) SHALL HEREINAFTER BE REFERRED TO AS A
     "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION
     AND  (B)  NO  PURPOSE  OF  SUCH  TRANSFER  IS  TO  IMPEDE THE ASSESSMENT OR
     COLLECTION  OF  TAX,  AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
     CONDITIONS  RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
     NOTWITHSTANDING  THE  REGISTRATION  IN  THE  CERTIFICATE  REGISTER  OF  ANY
     TRANSFER,  SALE  OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
     ORGANIZATION  OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
     SHALL  BE  DEEMED  TO  BE  OF  NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH
     PERSON  SHALL  NOT  BE  DEEMED  TO  BE  A CERTIFICATEHOLDER FOR ANY PURPOSE
     HEREUNDER,  INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
     THIS  CERTIFICATE.  EACH  HOLDER  OF  THIS CERTIFICATE BY ACCEPTANCE HEREOF
     SHALL  BE  DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND
     THE  PROVISIONS  OF  SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
     REFERRED  TO  HEREIN.  ANY  PERSON  THAT  IS A DISQUALIFIED ORGANIZATION IS
     PROHIBITED  FROM  ACQUIRING  BENEFICIAL  OWNERSHIP  OF  THIS  CERTIFICATE.

                                     A-15-2
<PAGE>
<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class R                   Aggregate Percentage Interest of the Class R
                                           Certificates as of the Issue Date: 100%
Date of Pooling and Servicing Agreement    Percentage Interest
and Cut-off Date: September 1, 2004
                                           Denomination: 100% Percentage Interest
First Distribution Date: October 25, 2004
                                           Master Servicer: Ameriquest Mortgage
No. 1                                      Company

                                           Trustee: Deutsche Bank National Trust Company

                                           Issue Date: September 20, 2004
</TABLE>

                                     A-15-3
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This  certifies  that  Ameriquest  Mortgage  Company is the registered
owner  of  a  Percentage  Interest  specified  above  in that certain beneficial
ownership  interest evidenced by all the Class R Certificates in a REMIC created
pursuant  to  a  Pooling  and Servicing Agreement, dated as specified above (the
"Agreement"),  among Ameriquest Mortgage Securities Inc. (hereinafter called the
"Depositor,"  which term includes any successor entity under the Agreement), the
Master  Servicer  and  the  Trustee,  a  summary  of  certain  of  the pertinent
provisions  of  which  is set forth hereafter. To the extent not defined herein,
the  capitalized  terms used herein have the meanings assigned in the Agreement.
This  Certificate  is  issued  under and is subject to the terms, provisions and
conditions  of  the Agreement, to which Agreement the Holder of this Certificate
by  virtue  of  the acceptance hereof assents and by which such Holder is bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be  distributed  to the Holders of Class R Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the  face  hereof  (herein  called

                                     A-15-4
<PAGE>
the  "Certificates")  and  representing  a  Percentage  Interest in the Class of
Certificates specified on the face hereof equal to the denomination specified on
the  face  hereof  divided by the aggregate Certificate Principal Balance of the
Class  of  Certificates  specified  on  the  face  hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No  transfer  of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933,  as  amended  (the  "1933  Act"),  and  an  effective  registration  or
qualification  under  applicable  state  securities  laws,  or  is  made  in  a
transaction  that  does  not  require such registration or qualification. In the
event  that  such  a  transfer  of  this  Certificate  is  to  be  made  without
registration  or  qualification, the Trustee and the Certificate Registrar shall
require  receipt  of  (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate  desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and  (ii)  in  all  other  cases,  an

                                     A-15-5
<PAGE>
Opinion  of  Counsel  satisfactory  to it that such transfer may be made without
such  registration  or  qualification  (which Opinion of Counsel shall not be an
expense  of  the  Trust  Fund  or  of  the  Depositor, the Trustee or the Master
Servicer  in  their  respective capacities as such), together with copies of the
written certification(s) of the Holder of the Certificate desiring to effect the
transfer  and/or such Holder's prospective transferee upon which such Opinion of
Counsel  is  based.  None  of  the  Depositor,  the Certificate Registrar or the
Trustee  is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates  without  registration  or  qualification.  Any  Holder desiring to
effect  a  transfer  of  this  Certificate  shall  be  required to indemnify the
Trustee,  the  Depositor,  the  Certificate  Registrar  and  the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made  in  accordance  with  such  federal  and  state  laws.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

          Prior  to  registration  of any transfer, sale or other disposition of
this  Certificate,  the  proposed transferee shall provide to the Trustee (i) an
affidavit  to  the  effect  that  such  transferee  is  any  Person other than a
Disqualified  Organization  or  the  agent  (including  a  broker,  nominee  or
middleman)  of  a  Disqualified  Organization,  and  (ii)  a  certificate  that
acknowledges  that  (A)  the  Class  R  Certificates  have  been designated as a
residual interest in a REMIC, (B) it will include in its income a pro rata share
of  the  net  income  of  the  Trust Fund and that such income may be an "excess
inclusion,"  as  defined  in  the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have  the  financial means to satisfy all of its tax obligations including those
relating  to  holding the Class R Certificates. Notwithstanding the registration
in  the  Certificate Register of any transfer, sale or other disposition of this
Certificate  to  a  Disqualified  Organization  or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the  receipt  of  distributions  in  respect  of  this  Certificate.

          The  Holder  of  this  Certificate, by its acceptance hereof, shall be
deemed  to have consented to the provisions of Section 5.02 of the Agreement and
to  any  amendment of the Agreement deemed necessary by counsel of the Depositor
to  ensure  that  the  transfer  of  this Certificate to any Person other than a
Permitted  Transferee or any other Person will not cause the Trust Fund to cease
to  qualify  as  a  REMIC  or  cause  the  imposition  of  a tax upon the REMIC.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

          No  service  charge will be made for any such registration of transfer
or  exchange  of  Certificates,  but  the  Trustee  may require payment of a sum
sufficient  to  cover  any  tax  or  other

                                     A-15-6
<PAGE>
governmental  charge  that  may  be  imposed  in connection with any transfer or
exchange  of  Certificates.

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                     A-15-7
<PAGE>
          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                     A-15-8
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                    <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                     -----------
                                                                   (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                      under Uniform Gifts
                                                                   to Minors Act
     JT TEN  -   as joint tenants with right if                    _________________
                 survivorship  and  not  as                            (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                     A-15-9
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                    A-15-10
<PAGE>
                                  EXHIBIT A-16

                          FORM OF CLASS R-X CERTIFICATE

     THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED STATES PERSON.

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

     THIS  CERTIFICATE  HAS  NOT  BEEN  AND  WILL  NOT  BE  REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
     MAY  NOT  BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH
     ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
     REGISTRATION  UNDER  SUCH  ACT  AND  UNDER  APPLICABLE  STATE  LAW  AND  IS
     TRANSFERRED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF  SECTION 5.02 OF THE
     AGREEMENT.

     ANY  RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
     ONLY  IN  ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
     SERVICING  AGREEMENT  REFERRED  TO  HEREIN.

     NO  TRANSFER  OF  THIS  CERTIFICATE  TO  AN  EMPLOYEE BENEFIT PLAN OR OTHER
     RETIREMENT  ARRANGEMENT  (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
     INCOME  SECURITY  ACT  OF  1974,  AS AMENDED ("ERISA"), OR THE CODE WILL BE
     REGISTERED  EXCEPT  IN  COMPLIANCE  WITH  THE  PROCEDURES DESCRIBED HEREIN.

                                     A-16-1
<PAGE>
     ANY  RESALE,  TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
     ONLY  IF  THE  PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE
     THAT  (A)  SUCH  TRANSFEREE  IS NOT (1) THE UNITED STATES OR ANY POSSESSION
     THEREOF,  ANY  STATE  OR  POLITICAL  SUBDIVISION  THEREOF,  ANY  FOREIGN
     GOVERNMENT,  ANY  INTERNATIONAL  ORGANIZATION,  OR  ANY  AGENCY  OR
     INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
     COOPERATIVE  DESCRIBED  IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE
     TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO
     THE  TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED
     IN  SECTION  1381(A)(2)(C)  OF  THE  CODE (ANY SUCH PERSON DESCRIBED IN THE
     FOREGOING  CLAUSES  (1),  (2)  OR (3) SHALL HEREINAFTER BE REFERRED TO AS A
     "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION
     AND  (B)  NO  PURPOSE  OF  SUCH  TRANSFER  IS  TO  IMPEDE THE ASSESSMENT OR
     COLLECTION  OF  TAX,  AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
     CONDITIONS  RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
     NOTWITHSTANDING  THE  REGISTRATION  IN  THE  CERTIFICATE  REGISTER  OF  ANY
     TRANSFER,  SALE  OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED
     ORGANIZATION  OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
     SHALL  BE  DEEMED  TO  BE  OF  NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH
     PERSON  SHALL  NOT  BE  DEEMED  TO  BE  A CERTIFICATEHOLDER FOR ANY PURPOSE
     HEREUNDER,  INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
     THIS  CERTIFICATE.  EACH  HOLDER  OF  THIS CERTIFICATE BY ACCEPTANCE HEREOF
     SHALL  BE  DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND
     THE  PROVISIONS  OF  SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
     REFERRED  TO  HEREIN.  ANY  PERSON  THAT  IS A DISQUALIFIED ORGANIZATION IS
     PROHIBITED  FROM  ACQUIRING  BENEFICIAL  OWNERSHIP  OF  THIS  CERTIFICATE.

                                     A-16-2
<PAGE>
<TABLE>
<CAPTION>
<S>                                        <C>
Series 2004-IA1, Class R-X                 Aggregate Percentage Interest of the Class R-X
                                           Certificates as of the Issue Date: 100%
Date of Pooling and Servicing Agreement    Percentage Interest
and Cut-off Date: September 1, 2004
                                           Denomination: 100% Percentage Interest
First Distribution Date: October 25, 2004
                                           Master Servicer: Ameriquest Mortgage
No. 1                                      Company

                                           Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: September 20, 2004
</TABLE>

                                     A-16-3
<PAGE>
                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing  a  beneficial  ownership interest in a Trust Fund (the "Trust Fund")
consisting  primarily  of  a  pool  of  conventional  one-  to  four-family
adjustable-rate  and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed  and  sold  by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS  CERTIFICATE  DOES  NOT  REPRESENT  AN  OBLIGATION  OF  OR INTEREST IN
     AMERIQUEST  MORTGAGE  SECURITIES  INC., THE MASTER SERVICER, THE TRUSTEE OR
     ANY  OF  THEIR  RESPECTIVE  AFFILIATES.  NEITHER  THIS  CERTIFICATE NOR THE
     UNDERLYING  MORTGAGE  LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
     OF  THE  UNITED  STATES.

          This  certifies  that  MKM  I  Corp.  is  the  registered  owner  of a
Percentage  Interest  specified  above  in  that  certain  beneficial  ownership
interest evidenced by all the Class R-X Certificates in a REMIC created pursuant
to  a  Pooling  and  Servicing   Agreement,   dated  as  specified   above  (the
"Agreement"),  among Ameriquest Mortgage Securities Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),  the
Master  Servicer  and  the  Trustee,  a  summary  of  certain  of the  pertinent
provisions of which is set forth  hereafter.  To the extent not defined  herein,
the capitalized  terms used herein have the meanings  assigned in the Agreement.
This  Certificate  is issued under and is subject to the terms,  provisions  and
conditions of the Agreement,  to which Agreement the Holder of this  Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant  to the terms of the Agreement, distributions will be made on
the  25th  day  of  each  month  or, if such 25th day is not a Business Day, the
Business  Day  immediately  following (a "Distribution Date"), commencing on the
First  Distribution  Date  specified  above,  to  the  Person in whose name this
Certificate  is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to  be distributed to the Holders of Class R-X Certificates on such Distribution
Date  pursuant  to  the  Agreement.

          All  distributions  to  the  Holder  of  this  Certificate  under  the
Agreement  will  be  made or caused to be made by or on behalf of the Trustee by
wire  transfer  in  immediately  available  funds  to  the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least  five  Business  Days  prior  to the Record Date immediately prior to such
Distribution  Date  or  otherwise  by  check  mailed  by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the  Certificate  Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such  distribution  and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the  Agreement.

                                     A-16-4
<PAGE>
          This  Certificate  is  one  of a duly authorized issue of Certificates
designated  as Asset-Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest  in the Class of Certificates specified on the face hereof equal to the
denomination  specified  on the face hereof divided by the aggregate Certificate
Principal  Balance  of  the  Class of Certificates specified on the face hereof.

          The  Certificates  are  limited  in  right  of  payment  to  certain
collections  and  recoveries  respecting  the  Mortgage  Loans,  all  as  more
specifically  set  forth  herein  and  in  the  Agreement.  As  provided  in the
Agreement,  withdrawals from the Collection Account and the Distribution Account
may  be  made  from  time  to  time  for  purposes  other  than distributions to
Certificateholders,  such  purposes including reimbursement of advances made, or
certain  expenses  incurred,  with  respect  to  the  Mortgage  Loans.

          The  Agreement  permits, with certain exceptions therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Depositor,  the  Master  Servicer,  the  Trustee  and  the  rights  of  the
Certificateholders  under the Agreement at any time by the Depositor, the Master
Servicer  and  the  Trustee  with  the  consent  of  the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall  be  conclusive and binding on such Holder and upon all
future  Holders  of  this  Certificate  and  of  any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of  such  consent  is made upon this Certificate. The Agreement also permits the
amendment  thereof, in certain limited circumstances, without the consent of the
Holders  of  any  of  the  Certificates.

          As  provided  in  the  Agreement  and  subject  to certain limitations
therein  set  forth,  the  transfer  of  this  Certificate is registrable in the
Certificate  Register  upon  surrender  of  this Certificate for registration of
transfer  at the offices or agencies appointed by the Trustee as provided in the
Agreement,  duly  endorsed by, or accompanied by an assignment in the form below
or  other written instrument of transfer in form satisfactory to the Trustee and
the  Certificate  Registrar duly executed by, the Holder hereof or such Holder's
attorney  duly authorized in writing, and thereupon one or more new Certificates
of  the  same  Class  in  authorized denominations evidencing the same aggregate
Percentage  Interest will be issued to the designated transferee or transferees.

          The  Certificates  are  issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in  the  Agreement.  As  provided  in  the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  Certificates  are  exchangeable  for  new
Certificates  of  the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No  transfer  of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933,  as  amended  (the  "1933  Act"),  and  an  effective  registration  or
qualification  under  applicable  state  securities  laws,  or  is  made  in  a
transaction  that  does  not  require such registration or qualification. In the
event  that  such  a  transfer  of  this  Certificate  is  to  be  made  without
registration  or  qualification, the Trustee and the Certificate Registrar shall
require  receipt  of  (i)  if  such  transfer  is  purportedly  being  made

                                     A-16-5
<PAGE>
in  reliance  upon Rule 144A under the 1933 Act, written certifications from the
Holder  of  the  Certificate  desiring  to  effect  the  transfer, and from such
Holder's  prospective  transferee,  substantially  in  the forms attached to the
Agreement  as  Exhibit  F-1,  and (ii) in all other cases, an Opinion of Counsel
satisfactory  to  it that such transfer may be made without such registration or
qualification  (which  Opinion  of  Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder  of  the Certificate desiring to effect the transfer and/or such Holder's
prospective  transferee upon which such Opinion of Counsel is based. None of the
Depositor,  the Certificate Registrar or the Trustee is obligated to register or
qualify  the  Class  of Certificates specified on the face hereof under the 1933
Act  or  any  other  securities law or to take any action not otherwise required
under  the  Agreement  to  permit  the  transfer  of  such  Certificates without
registration  or qualification. Any Holder desiring to effect a transfer of this
Certificate  shall  be  required  to  indemnify  the Trustee, the Depositor, the
Certificate  Registrar  and  the  Master Servicer against any liability that may
result  if  the transfer is not so exempt or is not made in accordance with such
federal  and  state  laws.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made  except  in  accordance  with  Section  5.02(c)  of  the  Agreement.

          Prior  to  registration  of any transfer, sale or other disposition of
this  Certificate,  the  proposed transferee shall provide to the Trustee (i) an
affidavit  to  the  effect  that  such  transferee  is  any  Person other than a
Disqualified  Organization  or  the  agent  (including  a  broker,  nominee  or
middleman)  of  a  Disqualified  Organization,  and  (ii)  a  certificate  that
acknowledges  that  (A)  the  Class  R-X  Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a pro rata share
of  the  net  income  of  the  Trust Fund and that such income may be an "excess
inclusion,"  as  defined  in  the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have  the  financial means to satisfy all of its tax obligations including those
relating to holding the Class R-X Certificates. Notwithstanding the registration
in  the  Certificate Register of any transfer, sale or other disposition of this
Certificate  to  a  Disqualified  Organization  or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the  receipt  of  distributions  in  respect  of  this  Certificate.

          The  Holder  of  this  Certificate, by its acceptance hereof, shall be
deemed  to have consented to the provisions of Section 5.02 of the Agreement and
to  any  amendment of the Agreement deemed necessary by counsel of the Depositor
to  ensure  that  the  transfer  of  this Certificate to any Person other than a
Permitted  Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon the REMIC.

          No  transfer of this Certificate to a Plan subject to ERISA or Section
4975  of  the  Code, any Person acting, directly or indirectly, on behalf of any
such  Plan  or  any  Person  using

                                     A-16-6
<PAGE>
"Plan  Assets"  to  acquire  this Certificate shall be made except in accordance
with  Section  5.02(c)  of  the  Agreement.

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

          The  Depositor,  the  Master Servicer, the Trustee and the Certificate
Registrar  and  any  agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered  as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be  affected  by  notice  to  the  contrary.

          The  obligations  created  by the Agreement and the Trust Fund created
thereby  shall  terminate  upon payment to the Certificateholders of all amounts
held  by  the  Trustee and required to be paid to them pursuant to the Agreement
following  the  earlier  of  (i)  the final payment or other liquidation (or any
advance  with  respect  thereto) of the last Mortgage Loan remaining in REMIC I,
and  (ii)  the  purchase  by  the  party  designated in the Agreement at a price
determined  as  provided in the Agreement from REMIC I of all the Mortgage Loans
and  all  property  acquired  in  respect  of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from  REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage  Loan  at a price determined as provided in the Agreement. The exercise
of  such  right  will effect early retirement of the Certificates; however, such
right  cannot  be  exercised  until  the  Optional  Termination  Date.

          The  recitals  contained  herein  shall  be taken as statements of the
Depositor  and  the  Trustee  assumes  no  responsibility for their correctness.

          Unless  the  certificate of authentication hereon has been executed by
the  Certificate  Registrar,  by manual signature, this Certificate shall not be
entitled  to  any  benefit  under  the  Agreement  or  be valid for any purpose.

                                     A-16-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.

Dated:  _______________,  2004

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Trustee

                                        By:_____________________________________
                                                  Authorized  Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                        DEUTSCHE  BANK  NATIONAL
                                        TRUST  COMPANY
                                        as  Certificate  Registrar

                                        By:_____________________________________
                                                  Authorized  Signatory

                                     A-16-8
<PAGE>
                                  ABBREVIATIONS

          The  following abbreviations, when used in the inscription on the face
of  this  instrument, shall be construed as though they were written out in full
according  to  applicable  laws  or  regulations:

<TABLE>
<CAPTION>
<S>              <C>                           <C>                   <C>
     TEN COM  -  as tenants in common          UNIF GIFT MIN ACT  -   Custodian
                                                                      -----------
                                                                    (Cust) (Minor)
     TEN ENT  -  as tenants by the entireties                       under Uniform Gifts
                                                                    to Minors Act
     JT TEN  -   as joint tenants with right if                     _________________
                 survivorship  and  not  as                              (State)
                 tenants  in  common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

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

(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification  Number  of  assignee)

a  Percentage  Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest  to  assignee  on  the  Certificate  Register  of  the  Trust  Fund.

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

Dated:

                                        ________________________________________
                                        Signature  by  or  on behalf of assignor

                                        ________________________________________
                                                  Signature  Guaranteed

                                     A-16-9
<PAGE>
                            DISTRIBUTION INSTRUCTIONS

          The  assignee  should  include  the  following  for  purposes  of
distribution:

          Distributions  shall  be  made,  by  wire  transfer  or  otherwise, in
immediately  available  funds  to ______________________________________________
________________________________  for  the  account  of  ______________________,
account  number  __________________or,  if  mailed  by  check,  to______________
_______________________________________________________________________________.
Applicable  statements  should  be  mailed  to__________________________________
________________________________________________________________________________
_______________________________________________________________________________.

          This  information  is  provided  by  ________________________________,
the  assignee name above, or ___________________________________________, as its
agent.

                                    A-16-10
<PAGE>
                                    EXHIBIT B
                           FORM OF LOST NOTE AFFIDAVIT

Loan  #: ______________
Borrower: _____________

                               LOST NOTE AFFIDAVIT

          I,  as  ____________________  of  ______________________,  a
_______________  corporation  am  authorized to make this Affidavit on behalf of
_____________________  (the  "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as  Seller  on  behalf of Ameriquest Mortgage Securities Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:

     1.   The  Seller's  address  is:     _____________________
                                          _____________________
                                          _____________________

     2.   The  Seller  previously  delivered  to  the Purchaser a signed Initial
Certification with respect to such Mortgage and/or Assignment of Mortgage;

     3.   Such  Mortgage Note and/or Assignment of Mortgage was assigned or sold
to  the  Purchaser  by  ________________________,  a  ____________  corporation
pursuant to the terms and provisions of a Mortgage Loan Purchase Agreement dated
as  of  __________  __,  _____;

     4.   Such  Mortgage  Note  and/or Assignment of Mortgage is not outstanding
pursuant  to  a  request  for  release  of  Documents;

     5.   Aforesaid Mortgage Note and/or Assignment of Mortgage (the "Original")
has  been  lost;

     6.   Deponent  has  made  or  caused  to  be made a diligent search for the
Original  and  has  been  unable  to  find  or  recover  same;

     7.   The Seller was the Seller of the Original at the time of the loss; and

     8.   Deponent  agrees that, if said Original should ever come into Seller's
possession,  custody or power, Seller will immediately and without consideration
surrender  the  Original  to  the  Purchaser.

     9.   Attached  hereto  is a true and correct copy of (i) the Note, endorsed
in  blank  by  the Mortgagee and (ii) the Mortgage or Deed of Trust (strike one)
which  secures  the  Note,  which  Mortgage  or Deed of Trust is recorded in the
county  where  the  property  is  located.

     10.  Deponent  hereby  agrees  that the Seller (a) shall indemnify and hold
harmless  the Purchaser, its successors and assigns, against any loss, liability
or  damage,  including  reasonable

                                      B-1
<PAGE>
attorney's  fees,  resulting from the unavailability of any Notes, including but
not  limited  to  any  loss,  liability  or  damage  arising  from (i) any false
statement  contained  in  this  Affidavit,  (ii) any claim of any party that has
already  purchased a mortgage loan evidenced by the Lost Note or any interest in
such  mortgage  loan,  (iii)  any  claim  of  any  borrower  with respect to the
existence  of terms of a mortgage loan evidenced by the Lost Note on the related
property to the fact that the mortgage loan is not evidenced by an original note
and  (iv)  the  issuance  of a new instrument in lieu thereof (items (i) through
(iv)  above  hereinafter referred to as the "Losses") and (b) if required by any
Rating  Agency  in  connection  with  placing such Lost Note into a Pass-Through
Transfer,  shall  obtain  a  surety from an insurer acceptable to the applicable
Rating  Agency  to  cover  any  Losses  with  respect  to  such  Lost  Note.

     11.  This  Affidavit  is  intended  to be relied upon by the Purchaser, its
successors  and  assigns.  _____________________,  a  ______________ corporation
represents  and  warrants  that  it has the authority to perform its obligations
under  this  Affidavit  of  Lost  Note.

Executed this ____ day, of ___________ ______.

                                        SELLER

                                        By:_____________________________________
                                                   Authorized  Officer

                                        Title:

          On  this  _____  day  of  ________,  _____,  before  me  appeared
_________________  to  me personally known, who being duly sworn did say that he
is  the  _____________________  of  ____________________  a  ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed  of  said  corporation.

                                        Signature:

                                        [Seal]

                                      B-2
<PAGE>
                                   EXHIBIT C-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                    [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

     Re:  Pooling  and Servicing Agreement, dated as of September 1, 2004, among
          Ameriquest  Mortgage  Securities Inc., Ameriquest Mortgage Company and
          Deutsche  Bank  National  Trust  Company,  Asset-Backed  Pass-Through
          Certificates,  Series  2004-IA1
          -------------------------------

Ladies  and  Gentlemen:

          Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of September 1, 2004, among Ameriquest Mortgage Securities Inc. as Depositor,
Ameriquest Mortgage Company, as master servicer and Deutsche Bank National Trust
Company  as  trustee, we hereby acknowledge that as to each Mortgage Loan listed
in  the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such  Mortgage  File  (other  than  such documents described in Section 2.01(v))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii)  such  documents  have  been  reviewed  by it or such Custodian and are not
mutilated,  torn  or defaced unless initialed by the related borrower and relate
to  such  Mortgage  Loan,  (iii) based on its or the Custodian's examination and
only  as  to  the  foregoing,  the  information  set  forth in the Mortgage Loan
Schedule  that  corresponds to items (1) through (3), (6), (9), (10), (13), (15)
and  (19)  of  the  definition  of  "Mortgage Loan Schedule" accurately reflects
information  set  forth  in  the  Mortgage  File.

          The  Trustee  has  made  no  independent  examination of any documents
contained  in  each Mortgage File beyond the review specifically required in the
above-referenced  Pooling  and  Servicing  Agreement.  The  Trustee  makes  no
representations  as  to: (i) the validity, legality, sufficiency, recordability,
enforceability  or genuineness of any of the documents contained in the Mortgage
File  of  any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii)  the  collectability,  insurability, perfection, priority, effectiveness or
suitability  of  any  such  Mortgage  Loan.

          The  Trustee was under no duty or obligation (i) to inspect, review or
examine  any  such  documents,  instruments,  certificates  or  other  papers to
determine  whether  they  are  genuine,  enforceable,  or  appropriate  for  the
represented  purpose  or  whether  they  have  actually  been

                                      C-1-1
<PAGE>
recorded  or  that  they are other than what they purport to be on their face or
(ii)  to determine whether any Mortgage File should include any of the documents
specified  in  clause  (v)  of  Section  2.01.

     Capitalized  terms  used  but  not  defined  herein shall have the meanings
assigned  to  them  in  the  Pooling  and  Servicing  Agreement.

                                        DEUTSCHE  BANK  NATIONAL  TRUST
                                        COMPANY,  as  Trustee

                                        By:_____________________________________
                                        Name:
                                        Title:

                                      C-1-2
<PAGE>
                                   EXHIBIT C-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                    [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

     Re:  Pooling  and Servicing Agreement, dated as of September 1, 2004, among
          Ameriquest  Mortgage  Securities Inc., Ameriquest Mortgage Company and
          Deutsche  Bank  National  Trust  Company,  Asset-Backed  Pass-Through
          Certificates,  Series  2004-IA1
          ----------------------------------------------------------------------

Ladies  and  Gentlemen:

          In  accordance  with  Section  2.02 of the above-captioned Pooling and
Servicing  Agreement,  the  undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan  paid in full or listed on the attachment hereto), it or a Custodian on its
behalf  has  received  each  of  the  documents  listed  in  Section  2.01.

          The  Trustee  has  made  no  independent  examination of any documents
contained  in  each Mortgage File beyond the review specifically required in the
above-referenced  Pooling  and  Servicing  Agreement.  The  Trustee  makes  no
representations  as  to: (i) the validity, legality, sufficiency, recordability,
enforceability  or genuineness of any of the documents contained in the Mortgage
File  of  any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii)  the  collectability,  insurability, perfection, priority, effectiveness or
suitability  of  any  such  Mortgage  Loan.

          Capitalized  words  and  phrases used herein shall have the respective
meanings  assigned  to  them  in  the  above-captioned  Pooling  and  Servicing
Agreement.

                                        DEUTSCHE  BANK  NATIONAL  TRUST
                                        COMPANY,  as  Trustee

                                        By:_____________________________________
                                        Name:
                                        Title:

                                      C-2-1
<PAGE>
                                   EXHIBIT C-3

                   FORM OF TRUSTEE'S RECEIPT OF MORTGAGE NOTE

                                                      [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

     Re:  Pooling  and Servicing Agreement, dated as of September 1, 2004, among
          Ameriquest  Mortgage  Securities Inc., Ameriquest Mortgage Company and
          Deutsche  Bank  National  Trust  Company,  Asset-Backed  Pass-Through
          Certificates,  Series  2004-IA1
          ----------------------------------------------------------------------

Ladies  and  Gentlemen:

          Pursuant  to Section 2.01 of the above-captioned Pooling and Servicing
Agreement,  we  hereby acknowledge the receipt of the original Mortgage Note for
each Mortgage Loan with any exceptions thereto listed on Exhibit 1.

          Capitalized  terms used but not defined herein shall have the meanings
assigned to them in the above-captioned Pooling and Servicing Agreement.

                                        DEUTSCHE  BANK  NATIONAL  TRUST
                                        COMPANY,  as  Trustee

                                        By:_____________________________________
                                        Name:
                                        Title:

                                      C-3-1
<PAGE>
                                    EXHIBIT D

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                      D-1-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated September 17, 2004, between Ameriquest Mortgage Company, a Delaware
corporation (the "Seller"), and Ameriquest Mortgage Securities Inc., a Delaware
corporation (the "Purchaser").

                              Preliminary Statement
                              ---------------------

                  The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser shall deposit the Mortgage Loans into a
mortgage pool constituting the Trust Fund. The Trust Fund will be evidenced by a
single series of asset-backed pass-through certificates designated as Series
2004-IA1 (the "Certificates"). The Certificates will consist of sixteen classes
of certificates. The Class M-9 Certificates, the Class CE Certificates, the
Class P Certificates and the Class R Certificates (collectively, the
"Non-Offered Certificates") will be delivered to the Seller or its designee as
partial consideration for the Mortgage Loans as further described below.

                  The Certificates will be issued pursuant to a Pooling and
Servicing Agreement relating to the Series 2004-IA1 Certificates, dated as of
September 1, 2004 (the "Pooling and Servicing Agreement"), among the Purchaser
as depositor (in such capacity, the "Depositor"), the Seller as master servicer
(in such capacity the "Master Servicer") and Deutsche Bank National Trust
Company as trustee (the "Trustee"). Pursuant to the Pooling and Servicing
Agreement, the Depositor will assign all of its right, title and interest in and
to the Mortgage Loans, together with its rights under this Agreement, to the
Trustee for the benefit of the Certificateholders. Capitalized terms used but
not defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Seller hereby sells, and
the Purchaser hereby purchases, as of September 20, 2004 (the "Closing Date"),
certain adjustable-rate and fixed-rate conventional, one- to four-family,
residential mortgage loans (the "Mortgage Loans"), having an aggregate principal
balance as of the close of business on September 1, 2004 (the "Cut-off Date") of
$300,005,332.11, after giving effect to all payments due on the Mortgage Loans
on or before the Cut-off Date (the "Closing Balance"), whether or not received,
including the right to any Prepayment Charges collected after the Cut-off Date
from the Mortgagors in connection with any Principal Prepayments on the Mortgage
Loans. Any payments (including Prepayment Charges) collected on or before the
Cut-off Date, including all scheduled payments of principal and interest due on
or before the Cut-off Date and collected after the Cut-off Date, shall belong to
the Seller. In addition to the sale of the Mortgage Loans, the Seller will cause
the Cap Contracts to be transferred to the Purchaser.

                  SECTION 2. MORTGAGE LOAN SCHEDULE AND PREPAYMENT CHARGE
SCHEDULE. The Purchaser and the Seller have agreed upon which of the mortgage
loans owned by the Seller are to be purchased by the Purchaser pursuant to this
Agreement, and the Seller shall prepare or cause to be prepared on or prior to
the Closing Date a final schedule (the "Closing Schedule")

<PAGE>

describing such Mortgage Loans and setting forth all of the Mortgage Loans to be
purchased under this Agreement. The Closing Schedule shall conform to the
requirements set forth in this Agreement and to the definition of "Mortgage Loan
Schedule" under the Pooling and Servicing Agreement. The Closing Schedule shall
be used as the Mortgage Loan Schedule under the Pooling and Servicing Agreement.
The Seller shall also prepare or cause to be prepared on or prior to the Closing
Date a final schedule (the "Prepayment Charge Schedule") setting forth each
Mortgage Loan containing a Prepayment Charge and conforming to the definition of
Prepayment Charge Schedule under the Pooling and Servicing Agreement.

                  SECTION 3. CONSIDERATION.

                           (a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, (i) pay to
or upon the order of the Seller in immediately available funds an amount equal
to the net sale proceeds of the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class M-1 Certificates, the Class
M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the
Class M-5 Certificates, the Class M-7 Certificates and the Class M-8
Certificates and (ii) deliver to the Seller or its designee the Non-Offered
Certificates.

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell to the Purchaser, without recourse but subject to the terms of this
Agreement, all of its right, title and interest in, to and under the Mortgage
Loans, including the related Prepayment Charges collected after the Cut-off
Date. The contents of each Mortgage File not delivered to the Purchaser or to
any assignee, transferee or designee of the Purchaser on or prior to the Closing
Date are and shall be held in trust by the Seller for the benefit of the
Purchaser or any assignee, transferee or designee of the Purchaser. Upon the
sale and contribution of the Mortgage Loans the ownership of each Mortgage Note,
the related Mortgage and the other contents of the related Mortgage File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or that come into the
possession of the Seller on or after the Closing Date shall immediately vest in
the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller
will, on or prior to the Closing Date, deliver or cause to be delivered to the
Purchaser or any assignee, transferee or designee of the Purchaser each of the
following documents for each Mortgage Loan:

                                    (1) the original Mortgage Note, endorsed in
         blank without recourse or in the following form: "Pay to the order of
         Deutsche Bank National Trust Company, as Trustee under the applicable
         agreement, without recourse," with all prior and intervening
         endorsements showing a complete chain of endorsement from the
         originator to the Person so endorsing to the Trustee, or with respect
         to any lost Mortgage Note, an original Lost Note Affidavit; provided,
         however, that such substitutions of Lost Note Affidavits for original
         Mortgage Notes may occur only with respect to Mortgage

                                       2
<PAGE>

         Loans, the aggregate Cut-off Date Principal Balance of which is less
         than or equal to 2.00% of the Pool Balance as of the Cut-off Date;

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

                                    (3) an original Assignment assigned in
         blank, without recourse;

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

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

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

                  If any document referred to in Section 4(b)(2), 4(b)(3) or
4(b)(4) above has been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has been lost or
such public recording office has retained the original of such document, the
obligations of the Seller hereunder shall be deemed to have been satisfied upon
(1) delivery by or on behalf of the Seller promptly upon receipt thereof to the
Purchaser or any assignee, transferee or designee of the Purchaser of either the
original or a copy of such document certified by the Seller in the case of (x)
above or the public recording office in the case of (y) above to be a true and
complete copy of the recorded original thereof and (2) if such delivered copy is
certified by the Seller, then in addition thereto, delivery promptly upon
receipt thereof of either the original or a copy of such document certified by
the public recording office to be a true and complete copy of the original. In
the event that the original lender's title insurance policy has not yet been
issued, the Seller shall deliver to the Purchaser or any assignee, transferee or
designee of the Purchaser a written commitment or interim binder or preliminary
report of title issued by the title insurance or escrow company. Promptly upon
receipt by the Seller of any such original title insurance policy the Seller
shall deliver such to the Purchaser or any assignee, transferee or designee of
the Purchaser.

                  The Seller shall promptly (and in no event later than thirty
(30) Business Days, subject to extension upon mutual agreement between the
Seller and the Trustee, following the later of (i) the Closing Date, (ii) the
date on which the Seller receives the Assignment from the

                                       3
<PAGE>

Trustee and (iii) the date of receipt by the Seller of the recording information
for a Mortgage) submit or cause to be submitted for recording, at no expense to
the Trust Fund or the Trustee, in the appropriate public office for real
property records, each Assignment referred to in (iii) and (iv) above and shall
execute each original Assignment referred to in (iii) in the following form:
"Deutsche Bank National Trust Company, as Trustee under the applicable
agreement". In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Seller shall promptly prepare or cause to be
prepared a substitute Assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates (without regard to the Policy); provided further,
however, each Assignment shall be submitted for recording by the Seller (at the
direction of the Master Servicer) in the manner described above, at no expense
to the Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights or the NIMS Insurer, (ii) a failure of the Master Servicer Termination
Test as set forth in the Pooling and Servicing Agreement, (iii) the occurrence
of the bankruptcy or insolvency of the Seller, (iv) the occurrence of a
servicing transfer as described in Section 7.02 of the Pooling and Servicing
Agreement and (v) if the Seller is not the Master Servicer and with respect to
any one assignment or Mortgage, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.

                  Each original document relating to any Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Seller, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date, within seven (7) days of its delivery) to
ascertain that all required documents have been executed and received and that
such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule.

                           (d) Reserved.

                           (e) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller, and the assignee shall
succeed to the rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Seller under this Agreement
shall be promptly reimbursed by the Seller.

                           (f) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan or (ii)

                                       4
<PAGE>

make such Mortgage Files available to the Purchaser or to any assignee,
transferee or designee of the Purchaser for examination at the Trustee's offices
in Santa Ana, California. Such examination may be made by the Purchaser, and its
respective designees, upon reasonable notice to the Seller and the Trustee
during normal business hours before the Closing Date and within sixty (60) days
after the Closing Date. If any such person makes such examination prior to the
Closing Date and identifies any Mortgage Loans that do not conform to the
requirements of the Purchaser as described in this Agreement, such Mortgage
Loans shall be deleted from the Closing Schedule. The Purchaser may, at its
option and without notice to the Seller, purchase all or part of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or any person has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the rights of the
Purchaser or any assignee, transferee or designee of the Purchaser to demand
repurchase or other relief as provided herein or under the Pooling and Servicing
Agreement.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             SELLER.

                  The Seller hereby represents and warrants to the Purchaser as
of the date hereof and as of the Closing Date, and covenants that:

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

                           (2) The Seller had the full corporate power and
         authority to originate, hold and sell each Mortgage Loan and has the
         full corporate power and authority to service each Mortgage Loan, and
         to execute, deliver and perform, and to enter into and consummate the
         transactions contemplated by this Agreement and has duly authorized by
         all necessary corporate action on the part of the Seller the execution,
         delivery and performance of this Agreement; this Agreement has been
         duly executed and delivered by the Seller and this Agreement, assuming
         the due authorization, execution and delivery thereof by the Purchaser,
         constitutes a legal, valid and binding obligation of the Seller,
         enforceable against the Seller in accordance with its terms, except to
         the extent that (a) the enforceability thereof may be limited by
         bankruptcy, insolvency, moratorium, receivership and other similar laws
         relating to creditors' rights generally and (b) the remedy of specific
         performance and injunctive and other forms of equitable relief may be
         subject to the equitable defenses and to the discretion of the court
         before which any proceeding therefor may be brought;

                           (3) The execution and delivery of this Agreement by
         the Seller, the servicing of the Mortgage Loans by the Seller under the
         Pooling and Servicing Agreement, the consummation of any other of the
         transactions herein contemplated, and

                                       5
<PAGE>

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

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

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

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

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
                             RELATING TO THE MORTGAGE LOANS.

                           (a) The Seller hereby represents and warrants to the
Purchaser, with respect to the Mortgage Loans as of the Closing Date or as of
such date specifically provided herein:

                                    (1) The information set forth on the
         Mortgage Loan Schedule with respect to each Mortgage Loan is true and
         correct in all material respects;

                                    (2) No material error, omission,
         misrepresentation, negligence, fraud or similar occurrence with respect
         to any Mortgage Loan has taken place on the part of any person,
         including without limitation, the Mortgagor, any appraiser, any builder
         or developer, or any other party involved in the origination of the
         Mortgage Loan or in the application of any insurance in relation to
         such Mortgage Loan;

                                       6
<PAGE>

                                    (3) All payments due prior to the Cut-off
         Date have been made and none of the Mortgage Loans will have been
         contractually delinquent for more than one calendar month more than
         once since the origination thereof;

                                    (4) Each Mortgage is a valid and enforceable
         first lien on the Mortgaged Property, including all improvements
         thereon, subject only to (a) the lien of nondelinquent current real
         property taxes and assessments, (b) covenants, conditions and
         restrictions, rights of way, easements and other matters of public
         record as of the date of recording of such Mortgage, such exceptions
         appearing of record being acceptable to mortgage lending institutions
         generally or specifically reflected in the appraisal made in connection
         with the origination of the related Mortgage Loan, and (c) other
         matters to which like properties are commonly subject which do not
         materially interfere with the benefits of the security intended to be
         provided by such Mortgage;

                                    (5) Immediately prior to the sale of the
         Mortgage Loans to the Purchaser, the Seller had good title to, and was
         the sole legal and beneficial owner of, each Mortgage Loan free and
         clear of any pledge, lien, encumbrance or security interest and has
         full right and authority, subject to no interest or participation of,
         or agreement with, any other party to sell and assign the same;

                                    (6) There is no delinquent tax or assessment
         lien against any Mortgaged Property;

                                    (7) There is no valid offset, defense or
         counterclaim to any Mortgage Note or Mortgage, including the obligation
         of the Mortgagor to pay the unpaid principal of or interest on such
         Mortgage Note, nor will the operation of any of the terms of the
         Mortgage Note and the Mortgage, or the exercise of any right
         thereunder, render the Mortgage unenforceable, in whole or in part, or
         subject to any valid right of rescission, set-off, counterclaim or
         defense, including the defense of usury and no such valid right of
         rescission, set-off, counterclaim or defense has been asserted with
         respect thereto;

                                    (8) There are no mechanics' liens or claims
         for work, labor or material rendered to the Mortgaged Property
         affecting any Mortgaged Property which are or may be a lien prior to,
         or equal with, the lien of the related Mortgage, except those which are
         insured against by the title insurance policy referred to in (12)
         below;

                                    (9) Subject to the Escrow Withhold referred
         to in (19) below, each Mortgaged Property is free of material damage
         and is in good repair;

                                    (10) Each Mortgage Loan at origination
         complied in all material respects with applicable local, state and
         federal laws and regulations, including, without limitation, usury,
         equal credit opportunity, real estate settlement procedures,
         truth-in-lending, disclosure laws and all applicable predatory and
         abusive lending laws, and consummation of the transactions contemplated
         hereby will not involve the violation of any such laws;

                                       7
<PAGE>

                                    (11) Neither the Seller nor any prior holder
         of any Mortgage has modified, impaired or waived the Mortgage in any
         material respect (except that a Mortgage Loan may have been modified by
         a written instrument which has been recorded, if necessary, to protect
         the interests of the Purchaser and which has been delivered to the
         Trustee); satisfied, canceled or subordinated such Mortgage in whole or
         in part; released the related Mortgaged Property in whole or in part
         from the lien of such Mortgage; or executed any instrument of release,
         cancellation, modification or satisfaction with respect thereto;

                                    (12) A lender's policy of title insurance
         together with a condominium endorsement, extended coverage endorsement,
         and an adjustable rate mortgage endorsement (each as applicable) in an
         amount at least equal to the Cut-off Date principal balance of each
         such Mortgage Loan or a commitment (binder) to issue the same was
         effective on the date of the origination of each Mortgage Loan, each
         such policy is valid and remains in full force and effect, the transfer
         of the related Mortgage Loan to the Purchaser will not affect the
         validity or enforceability of such policy and each such policy was
         issued by a title insurer qualified to do business in the jurisdiction
         where the Mortgaged Property is located and in a form acceptable to
         Fannie Mae or Freddie Mac, which policy insures the Seller and
         successor owners of indebtedness secured by the insured Mortgage, as to
         the first priority lien of the Mortgage; no claims have been made under
         such lender's title insurance policy and no prior holder of the related
         Mortgage, including the Seller, has done, by act or omission, anything
         which would impair the coverage of such lender's title insurance
         policy;

                                    (13) Each Mortgage Loan was originated by
         the Seller, or an Affiliate of the Seller, in accordance with the
         underwriting standards as set forth in the Prospectus Supplement (or,
         if generated by an entity other than the Seller, in accordance with
         such other underwriting standards as set forth in the Prospectus
         Supplement or, if generated on behalf of the Seller by a person other
         than the Seller, is subject to the same underwriting standards and
         procedures used by the Seller in originating mortgage loans directly)
         or by a savings and loan association, savings bank, commercial bank,
         credit union, insurance company or similar institution which is
         supervised and examined by a federal or state authority (including a
         mortgage broker), or by a mortgagee approved by the Secretary of
         Housing and Urban Development pursuant to Sections 203 and 211 of the
         National Housing Act;

                                    (14) With respect to each Adjustable-Rate
         Mortgage Loan, on each adjustment date, the Mortgage Rate will be
         adjusted to equal the Index plus the Gross Margin, rounded to the
         nearest 0.125%, subject to the Periodic Rate Cap, the Maximum Mortgage
         Rate and the Minimum Mortgage Rate. The related Mortgage Note is
         payable on the first day of each month in self-amortizing monthly
         installments of principal and interest, with interest payable in
         arrears, and requires a monthly payment which is sufficient to fully
         amortize the outstanding principal balance of the Mortgage Loan over
         its remaining term and to pay interest at the applicable Mortgage Rate.
         No Mortgage Loan is subject to negative amortization;

                                       8
<PAGE>

                                    (15) All of the improvements which were
         included for the purpose of determining the appraised value of the
         Mortgaged Property lie wholly within the boundaries and building
         restriction lines of such property, and no improvements on adjoining
         properties encroach upon the Mortgaged Property, except those, if any,
         which are insured against by the lender's title insurance policy
         referred to in (12) above.

                                    (16) All inspections, licenses and
         certificates required to be made or issued with respect to all occupied
         portions of the Mortgaged Property, including but not limited to
         certificates of occupancy, have been made or obtained from the
         appropriate authorities, and the Mortgaged Property is lawfully
         occupied under applicable law except as may otherwise be insured
         against by the lender's title insurance policy referred to in (12)
         above.

                                    (17) All parties which have had any interest
         in the Mortgage, whether as mortgagee, assignee, pledgee or otherwise,
         are (or, during the period in which they held and disposed of such
         interest, were) in compliance with any and all applicable licensing
         requirements of the laws of the state wherein the Mortgaged Property is
         located;

                                    (18) The Mortgage Note and the related
         Mortgage are genuine, and each is the legal, valid and binding
         obligation of the maker thereof, enforceable in accordance with its
         terms and with applicable laws. All parties to the Mortgage Note and
         the Mortgage had legal capacity to execute the Mortgage Note and the
         Mortgage and each Mortgage Note and Mortgage have been duly and
         properly executed by such parties;

                                    (19) The proceeds of each Mortgage Loan have
         been fully disbursed, there is no requirement for future advances
         thereunder and any and all requirements as to completion of any on-site
         or off-site improvements and as to disbursements of any escrow funds
         therefor have been complied with, except any Mortgaged Property or
         Mortgage Loan subject to an Escrow Withhold as defined in the
         Originator's underwriting guidelines. All costs, fees and expenses
         incurred in making, closing or recording the Mortgage Loans were paid;

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

                                    (21) With respect to each Mortgage
         constituting a deed of trust, a trustee, duly qualified under
         applicable law to serve as such, has been properly designated and
         currently so serves and is named in such Mortgage, and no fees or
         expenses are or will become payable by the Purchaser to the trustee
         under the deed of trust, except in connection with a trustee's sale
         after default by the Mortgagor;

                                       9
<PAGE>

                                    (22) There exist no deficiencies with
         respect to escrow deposits and payments, if such are required, for
         which customary arrangements for repayment thereof have not been made,
         and no escrow deposits or payments of other charges or payments due the
         Seller have been capitalized under the Mortgage or the related Mortgage
         Note;

                                    (23) The origination, collection and
         servicing practices used by the Seller with respect to each Mortgage
         Loan have been in all material respects legal, proper, reasonable and
         customary in the subprime mortgage origination and servicing business
         and each of the Mortgage Loans have been serviced by the Seller since
         origination;

                                    (24) There is no pledged account or other
         security other than real estate securing the Mortgagor's obligations;

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

                                    (26) The improvements upon each Mortgaged
         Property are covered by a valid, binding and existing hazard insurance
         policy that is in full force and effect with a generally acceptable
         carrier that provides for fire extended coverage and such other hazards
         as are customary in the area where the Mortgaged Property is located
         representing coverage not less than the lesser of the outstanding
         principal balance of the related Mortgage Loan or the minimum amount
         required to compensate for damage or loss on a replacement cost basis.
         All individual insurance policies and flood policies referred to in
         clause (27) below contain a standard mortgagee clause naming the Seller
         or the original mortgagee, and its successors in interest, as
         mortgagee, and the Seller has received no notice that any premiums due
         and payable thereon have not been paid; the Mortgage obligates the
         Mortgagor thereunder to maintain all such insurance, including flood
         insurance, at the Mortgagor's cost and expense, and upon the
         Mortgagor's failure to do so, authorizes the holder of the Mortgage to
         obtain and maintain such insurance at the Mortgagor's cost and expense
         and to seek reimbursement therefor from the Mortgagor, except as may be
         limited or restricted by applicable law;

                                    (27) If the Mortgaged Property is in an area
         identified in the Federal Register by the Federal Emergency Management
         Agency as having special flood hazards, a valid and binding flood
         insurance policy that is in full force and effect in a form meeting the
         requirements of the current guidelines of the Flood Insurance
         Administration is in effect with respect to such Mortgaged Property
         with a generally acceptable carrier in an amount representing coverage
         not less than the least of (A) the original outstanding principal
         balance of the Mortgage Loan, (B) the minimum amount required to
         compensate for damage or loss on a replacement cost basis or (C) the
         maximum amount of insurance that is available under the Flood Disaster
         Protection Act of 1973;

                                       10
<PAGE>

                                    (28) There is no default, breach, violation
         or event of acceleration existing under the Mortgage or the related
         Mortgage Note; and the Seller has not waived any default, breach,
         violation or event of acceleration;

                                    (29) Each Mortgaged Property is improved by
         a one- to four-family residential dwelling, including condominium units
         and dwelling units in planned unit developments, which does not include
         (a) cooperatives or (b) mobile homes and manufactured homes (as defined
         in the Fannie Mae Seller-Servicer's Guide), except when the appraisal
         indicates that (i) the mobile or manufactured home was built under the
         Federal Manufactured Home Construction and Safety Standards of 1976 or
         (ii) otherwise assumes the characteristics of site-built housing and
         meets local building codes, is readily marketable, has been permanently
         affixed to the site, is not in a mobile home "park," and is treated as
         real property under the applicable state law. With respect to any
         Mortgage Loan that is secured by a leasehold estate: (a) the lease is
         valid, in full force and effect; (b) all rents and other payments due
         under the lease have been paid; (c) the lessee is not in default under
         any provision of the lease; (d) the term of the lease exceeds the
         maturity date of the related Mortgage Loan by at least five (5) years;
         and (e) the Mortgagee under the Mortgage Loan is given notice and an
         opportunity to cure any defaults under the lease;

                                    (30) There is no obligation on the part of
         the Seller or any other party under the terms of the Mortgage or
         related Mortgage Note to make payments in lieu of or in addition to
         those made by the Mortgagor;

                                    (31) Any future advances made prior to the
         Cut-off Date have been consolidated with the outstanding principal
         amount secured by the Mortgage, and the secured principal amount, as
         consolidated, bears a single interest rate and single repayment term
         reflected on the Mortgage Loan Schedule. The consolidated principal
         amount does not exceed the original principal amount of the Mortgage
         Loan;

                                    (32) The Mortgage File contains an appraisal
         which was either (i) performed by an appraiser who satisfied, and which
         was conducted in accordance with, all of the applicable requirements of
         the Financial Institutions Reform, Recovery and Enforcement Act of
         1989, as amended or (ii) conducted in accordance with an insured
         valuation model;

                                    (33) None of the Mortgage Loans is a
         graduated payment mortgage loan, nor is any Mortgage Loan subject to a
         temporary buydown or similar arrangement;

                                    (34) No Mortgagor has currently requested
         any relief under the Servicemembers Civil Relief Act or similar state
         laws;

                                    (35) The Mortgage Loans comply in all
         material respects with the descriptions set forth under the captions
         "The Mortgage Pool" and Annex III in the Prospectus Supplement;

                                       11
<PAGE>

                                    (36) The Mortgage contains an enforceable
         provision for the acceleration of the payment of the unpaid principal
         balance of the Mortgage Loan in the event that the related Mortgaged
         Property is sold or transferred without the prior written consent of
         the mortgagee thereunder, except as may be limited by applicable law;

                                    (37) The information set forth in the
         Prepayment Charge Schedule attached as Schedule 2 to the Pooling and
         Servicing Agreement (including the prepayment charge summary attached
         thereto) is complete, true and correct in all material respects at the
         date or dates respecting which such information is furnished and each
         Prepayment Charge is permissible and enforceable in accordance with its
         terms upon the full and voluntary prepayment by the Mortgagor under
         applicable law and complied in all material respects with applicable
         local, state and federal laws (except to the extent that (i) the
         enforceability thereof may be limited by bankruptcy, insolvency,
         moratorium, receivership and other similar laws relating to creditors'
         rights generally or (ii) the collectability thereof may be limited due
         to acceleration in connection with a foreclosure or other involuntary
         payoff);

                                    (38) Each Mortgage Loan is an obligation
         that is principally secured by real property for purposes of the REMIC
         Provisions of the Code;

                                    (39) The Mortgage Loans are not subject to
         the requirements of the Home Ownership and Equity Protection Act of
         1994 ("HOEPA") and no Mortgage Loan is subject to, or in violation of,
         any applicable state or local law, ordinance or regulation similar to
         HOEPA;

                                    (40) (a) No Mortgage Loan is a High Cost
         Loan as defined by HOEPA or any other applicable predatory or abusive
         lending laws and (b) no Mortgage Loan is a "high cost home", "covered"
         (excluding home loans defined as "covered home loans" in the New Jersey
         Home Ownership Security Act of 2002 that were originated between
         November 26, 2003 and July 7, 2004) , "high risk home" or "predatory"
         loan under any other applicable state, federal or local law (or a
         similarly classified loan using different terminology under a law
         imposing heightened regulatory scrutiny or additional legal liability
         for resident mortgage loans having high interest rates, points and/or
         fees);

                                    (41) No Mortgage Loan originated on or after
         October 1, 2002 will impose a Prepayment Charge for a term in excess of
         three years. Any Mortgage Loans originated prior to such date will not
         impose a Prepayment Charge for a term in excess of five (5) years;

                                    (42) No Mortgage Loan that is secured by
         property located in the State of Georgia is either a "Covered Loan" or
         "High Cost Home Loan" within the meaning of the Georgia Fair Lending
         Act, as amended (the "Georgia Act");

                                    (43) The Master Servicer for each Mortgage
         Loan prior to the Closing Date, has fully furnished, in accordance with
         the Fair Credit Reporting Act and its implementing regulations,
         accurate and complete information (e.g., favorable and

                                       12
<PAGE>

         unfavorable) on its borrower credit files to Equifax, Experian and
         Trans Union Credit Information Company or their successors (the "Credit
         Repositories") on a monthly basis;

                                    (44) There is no Mortgage Loan that was
         originated on or after October 1, 2002 and before March 7, 2003 which
         is secured by property located in the State of Georgia;

                                    (45) The Prepayment Charges included in the
         transaction are enforceable and originated in compliance with all
         applicable federal, state and local law;

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

                                    (47) No Mortgage Loan is a high cost loan or
         a covered loan, as applicable (as such terms are defined in Standard &
         Poor's LEVELS Version 5.6 Glossary Revised, Appendix E); and

                                    (48) With respect to any Mortgage Loan
         originated on or after August 1, 2004, neither the related Mortgage nor
         the related Mortgage Note requires the borrower to submit to
         arbitration to resolve any dispute arising out of or relating in any
         way to the Mortgage Loan transaction.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                           (a) The representations and warranties contained in
Section 6 shall not be impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Purchaser to review or examine such documents and shall inure to
the benefit of any assignee, transferee or designee of the Purchaser, including
the Trustee for the benefit of the Certificateholders.

                  Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller (as listed on
the Trustee's Preliminary Exception Report) as part of, any Mortgage File or of
a breach of any of the representations and warranties contained in Section 5 or
Section 6 that materially and adversely affects the value of any Mortgage Loan
or the interest therein of the Purchaser or the Purchaser's assignee, transferee
or designee (it being understood that with respect to the representations and
warranties set forth in (39), (40), (41), (43), (44), (46) and (48) of Section
6(a) herein, a breach of any such representation or warranty shall in and of
itself be deemed to materially adversely affect the interest therein of the
Purchaser and the Purchaser's assignee, transferee or designee), the party
discovering the breach shall give prompt written notice to the others. Within
ninety (90) days of its discovery or its receipt of notice of any such missing
documentation which was not transferred to the Purchaser as described above or
materially defective documentation or any such breach of a representation and
warranty (it being understood that with respect to the representations and
warranties set forth in (39), (40), (41), (43), (44), (46) and (48) of Section
6(a) herein, a breach of any such representation or warranty shall in and of
itself be deemed to materially adversely affect the interest therein of the
Purchaser and the Purchaser's assignee, transferee or designee), the Seller

                                       13
<PAGE>

promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Seller cannot deliver such missing
document or such defect or breach cannot be cured, the Seller shall, within
ninety (90) days of its discovery or receipt of notice, either (i) repurchase
the affected Mortgage Loan at a price equal to the Purchase Price or (ii)
pursuant to the provisions of the Pooling and Servicing Agreement, cause the
removal of such Mortgage Loan from the Trust Fund and substitute one or more
Qualified Substitute Mortgage Loans. In the event that any Mortgage Loan is
subject to a breach of the representation and warranty in Section 6(a)(39)
resulting in the Master Servicer's inability to collect all or part of the
Prepayment Charge from the Mortgagor, in lieu of repurchase, the Seller shall be
obligated to remit to the Master Servicer (for deposit in the Collection
Account) any shortfall in the Prepayment Charge collected upon the Mortgagor's
voluntary Principal Prepayment.

                  Notwithstanding the foregoing, within ninety (90) days of the
earlier of discovery by the Seller or receipt of notice by the Seller of the
breach of the representation of the Seller set forth in Section 6(a)(45) above,
which materially and adversely affects the interests of the Holders of the Class
P Certificates in any Prepayment Charge, the Seller shall pay the amount of the
scheduled Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection Account, net of any
amount previously collected by the Master Servicer and paid by the Master
Servicer, for the benefit of the Holders of the Class P Certificates, in respect
of such Prepayment Charge.

                  The Seller shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Seller shall deliver to the Purchaser such amended
Closing Schedule and shall deliver such other documents as are required by this
Agreement or the Pooling and Servicing Agreement within five (5) days of any
such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Any repurchase or substitution required by this Section shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

                  In addition, upon discovery by the Seller, the Purchaser, or
any assignee, transferee or designee of the Purchaser that any Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering the breach shall give prompt
written notice within five (5) Business Days to the others. Within ninety (90)
days of its discovery or its receipt of notice, the Seller promptly shall either
(i) repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.

                  (b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure, remit a Prepayment Charge shortfall,
repurchase or substitute for a defective Mortgage Loan constitute the sole
remedies of the Purchaser against the Seller respecting a missing or defective
material document or a breach of the representations and warranties contained in
Section 5 or Section 6.

                                       14
<PAGE>

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood LLP at 10:00 AM New York City time
on the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Seller under this Agreement shall be true and correct
                           in all material respects as of the date as of which
                           they are made and no event shall have occurred which,
                           with notice or the passage of time, would constitute
                           a default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Seller shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser pursuant to Section 2.01
                           of the Pooling and Servicing Agreement; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the Purchase Price.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                  (a)      (i) An Officers' Certificate of the Seller and Master
                           Servicer, dated the Closing Date, in form
                           satisfactory to and upon which the Purchaser and the
                           Underwriters may rely, and attached thereto copies of
                           the certificate of incorporation, by-laws and
                           certificate of good standing of the Seller and Master
                           Servicer under the laws of Delaware and stating that
                           the information contained in the Prospectus
                           Supplement, relating to the Mortgage Loans, the
                           Seller and Master Servicer, and the applicable loan
                           portfolio, is true and accurate in all material
                           respects and does not contain any untrue statement of
                           a material fact or omit to state a material fact
                           required to be stated therein or necessary to make
                           the statements therein, in light of the circumstances
                           under which they were made, not misleading and (ii)
                           if any of the Non-Offered Certificates are offered on
                           the Closing Date pursuant to a private placement
                           memorandum, the Seller shall deliver an Officer's
                           Certificate stating that the

                                       15
<PAGE>

                           same information contained in such private placement
                           memorandum is true and accurate in all material
                           respects;

                  (b)      An Officers' Certificate of the Seller, dated the
                           Closing Date, in form satisfactory to and upon which
                           the Purchaser and the Underwriters may rely, with
                           respect to certain facts regarding the sale of the
                           Mortgage Loans by the Seller to the Purchaser;

                  (c)      An Opinion of Counsel of the Seller and Master
                           Servicer, dated the Closing Date, in form
                           satisfactory to and addressed to the Purchaser and
                           the Underwriters;

                  (d)      Such opinions of counsel from the Purchaser's or
                           Seller's counsel as the Rating Agencies may request
                           in connection with the sale of the Mortgage Loans by
                           the Seller to the Purchaser or the Seller's execution
                           and delivery of, or performance under, this Agreement
                           and upon which the Underwriters may rely;

                  (e)      A letter from Deloitte & Touche LLP, certified public
                           accountants, dated the date hereof and to the effect
                           that they have performed certain specified procedures
                           as a result of which they determined that certain
                           information of an accounting, financial or
                           statistical nature set forth in the Prospectus
                           Supplement, under the captions "Summary of Prospectus
                           Supplement", "Risk Factors", "The Mortgage Pool",
                           "Yield on the Certificates", "Description of the
                           Certificates", "Pooling and Servicing Agreement--The
                           Seller and Master Servicer", Annex II and Annex III
                           agrees with the records of the Seller and the Master
                           Servicer;

                  (f)      The Seller and Master Servicer shall deliver for
                           inclusion in the Prospectus Supplement, under the
                           captions "The Mortgage Pool--Underwriting Standards
                           of the Originators;" and "Pooling and Servicing
                           Agreement--The Seller and Master Servicer", or for
                           inclusion in other offering material, such publicly
                           available information regarding its financial
                           condition and its mortgage loan delinquency,
                           foreclosure and loss experience, underwriting
                           standards, lending activities and loan sales,
                           production, and servicing and collection practices,
                           and any similar nonpublic, unaudited financial
                           information; and

                  (g)      Such further information, certificates, opinions and
                           documents as the Purchaser or the Underwriters may
                           reasonably request.

                  SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Seller's in-house accountants
and in-house attorneys, the costs and expenses incurred in connection with
producing the Seller's

                                       16
<PAGE>

loan loss, foreclosure and delinquency experience, and the costs and expenses
incurred in connection with obtaining the documents referred to in Sections 9(d)
and 9(e) to the extent such costs and expenses were not previously paid by the
Seller. The Seller shall pay (or shall reimburse the Purchaser or any other
Person to the extent that the Purchaser or such other Person shall pay) the
costs and expenses of printing (or otherwise reproducing) and delivering this
Agreement, the Pooling and Servicing Agreement, the Certificates, the
prospectus, the Prospectus Supplement, and the Private Placement Memorandum
relating to the Certificates and other related documents, the initial fees,
costs and expenses of the Trustee relating to the issuance of the initial
certification of the Trustee under Section 2.02 of the Pooling and Servicing
Agreement, the fees and expenses of the Seller's counsel in connection with the
preparation of all documents relating to the securitization of the Mortgage
Loans, the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates, the cost of outside special counsel that may
be required for the Purchaser, the cost of obtaining the documents referred to
in Section 9(g) and the fees charged by any rating agency to rate the
Certificates. All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such expense.

                  SECTION 11. RESERVED.

                  SECTION 12. RESERVED.

                  SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. The Seller agrees that, upon acceptance of
the Mortgage Loans by the Purchaser or its designee and delivery of payment to
the Seller, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.

         Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has

                                       17
<PAGE>

occurred and the security interest created by this Section 13 shall be deemed to
have been released.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 1100 Town & Country Road, Suite
1100, Orange, California 92868, Facsimile: (714) 564-9639, Attention: General
Counsel, or such other address as may hereafter be furnished to the Seller in
writing by the Purchaser; if to the Seller, addressed to the Seller at 1100 Town
& Country Road, Suite 1100, Orange, California 92868, Facsimile: (714) 564-9639,
Attention: General Counsel, or to such other address as the Seller may designate
in writing to the Purchaser.

                  SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 16. AGREEMENT OF PARTIES. The Seller and the Purchaser
agree to execute and deliver such instruments and take such actions as either of
the others may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement and the Pooling and
Servicing Agreement.

                  SECTION 17. SURVIVAL. The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (EXCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                                       18
<PAGE>

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. The
NIMS Insurer, if any, shall be a third party beneficiary hereof and may enforce
the terms hereof as if a party hereto.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession" for
purposes of perfecting the security interest pursuant to the New York Uniform
Commercial Code; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to Section 4(d)
hereof shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Pooling and Servicing Agreement.

                                       19
<PAGE>

                  IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.

                                          AMERIQUEST MORTGAGE COMPANY

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

                                          AMERIQUEST MORTGAGE SECURITIES INC.

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

                                       20

<PAGE>
                                    EXHIBIT E

                        REQUEST FOR RELEASE OF DOCUMENTS

     To:  Deutsche  Bank  National  Trust  Company,
          1761  East  St.  Andrew  Place
          Santa  Ana,  CA  92705-4934
          Attn:  Trust  Administration  -  AQ04IA1

     Re:       Pooling  and  Servicing  Agreement, dated as of September 1, 2004
               among  Ameriquest  Mortgage  Securities  Inc.,  as  Depositor,
               Ameriquest  Mortgage  Company, as Seller and Master Servicer, and
               Deutsche  Bank  National  Trust  Company,  as  Trustee
               -----------------------------------------------------------------

          In  connection  with  the administration of the Mortgage Loans held by
you  as Trustee pursuant to the above-captioned Pooling and Servicing Agreement,
we  request  the  release,  and  hereby  acknowledge  receipt,  of the Trustee's
Mortgage  File  for the Mortgage Loan described below, for the reason indicated.

Mortgage  Loan  Number:
----------------------

Mortgagor  Name.  Address  &  Zip  Code:
---------------------------------------

Reason  for  Requesting  Documents  (check  one):
----------------------------------

_____1.  Mortgage  Paid  in  Full

_____2.  Foreclosure

_____3.  Substitution

_____4.  Other  Liquidation  (Repurchases,  etc.)

_____5.  Nonliquidation               Reason:____________________

Address  to  which  Trustee  should  deliver
the  Trustee's  Mortgage  File:

By:___________________________________
          (authorized  signer)

Issuer:_______________________________
Address:______________________________
Date:_________________________________

                                      E-1-1
<PAGE>
Trustee
-------

Deutsche  Bank  National  Trust  Company

     Please acknowledge the execution of the above request by your signature and
date  below:

     __________________________     ____________________________________
     Signature                      Date

     Documents  returned  to  Trustee:

     __________________________     ____________________________________
     Trustee                        Date

                                      E-1-2
<PAGE>
                                   EXHIBIT F-1

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                  [DATED]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

               Re:  Ameriquest  Mortgage  Securities  Inc.,  Asset-Backed
                    Pass-Through  Certificates,  Series 2004-IA1, Class M-9, CE,
                    P,  and  R,  representing  a  [  ]  %  Percentage  Interest
                    ------------------------------------------------------------
Ladies  and  Gentlemen:

          In connection with the transfer by ________________ (the "Transferor")
to  ________________  (the  "Transferee") of the captioned mortgage pass-through
certificates  (the  "Certificates"), the Transferor hereby certifies as follows:

          Neither  the  Transferor  nor  anyone  acting  on  its  behalf has (a)
offered,  pledged,  sold,  disposed of or otherwise transferred any Certificate,
any  interest  in any Certificate or any other similar security to any person in
any  manner,  (b)  has  solicited  any  offer  to  buy  or  to  accept a pledge,
disposition  or  other  transfer  of  any  Certificate,  any  interest  in  any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in  any Certificate or any other similar security with any person in any manner,
(d)  has made any general solicitation by means of general advertising or in any
other  manner,  (e)  has  taken  any  other  action that (in the case of each of
subclauses  (a)  through  (d)  above)  would  constitute  a  distribution of the
Certificates  under  the Securities Act of 1933, as amended (the "1933 Act"), or
would  render the disposition of any Certificate a violation of Section 5 of the
1933  Act  or  any  state  securities  law  or  would  require  registration  or
qualification  pursuant  thereto.  The  Transferor  will  not  act,  nor  has it
authorized  or  will  it authorize any person to act, in any manner set forth in
the  foregoing sentence with respect to any Certificate. The Transferor will not
sell  or  otherwise  transfer any of the Certificates, except in compliance with
the  provisions  of  that  certain  Pooling and Servicing Agreement, dated as of
September  1,  2004,  among  Ameriquest  Mortgage  Securities Inc. as Depositor,
Ameriquest  Mortgage Company as Master Servicer and Deutsche Bank National Trust
Company  as  Trustee  (the "Pooling and Servicing Agreement"), pursuant to which
Pooling  and  Servicing  Agreement  the  Certificates  were  issued.

                                      F-1-1
<PAGE>
          Capitalized  terms used but not defined herein shall have the meanings
assigned  thereto  in  the  Pooling  and  Servicing  Agreement.

                                        Very truly yours,

                                        [Transferor]

                                        By:_____________________________________
                                        Name:
                                        Title:

                                      F-1-2
<PAGE>
                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                             [Date]

Deutsche  Bank  National  Trust  Company
1761  East  St.  Andrew  Place
Santa  Ana,  California  92705-4934

     Re:  Ameriquest  Mortgage  Securities  Inc.,  Asset-Backed  Pass-Through
          Certificates,  Series  2004-IA1,  Class  M-9, CE, P, R, representing a
          [___]%  Percentage  Interest
          ----------------------------------------------------------------------

Ladies  and  Gentlemen:

          In  connection  with  the  purchase  from  ______________________ (the
"Transferor")  on  the  date  hereof  of  the  captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

          1.   The  Transferee is a "qualified institutional buyer" as that term
     is  defined in Rule 144A ("Rule 144A") under the Securities Act of 1933, as
     amended  (the  "1933  Act")  and  has  completed  either  of  the  forms of
     certification  to  that  effect  attached hereto as Annex 1 or Annex 2. The
     Transferee  is  aware that the sale to it is being made in reliance on Rule
     144A.  The  Transferee is acquiring the Certificates for its own account or
     for  the  account  of a qualified institutional buyer, and understands that
     such Certificate may be resold, pledged or transferred only (i) to a person
     reasonably  believed  to  be a qualified institutional buyer that purchases
     for  its  own account or for the account of a qualified institutional buyer
     to  whom  notice is given that the resale, pledge or transfer is being made
     in  reliance  on  Rule  144A,  or  (ii)  pursuant to another exemption from
     registration  under  the  1933  Act.

          2.   The  Transferee has been furnished with all information regarding
     (a) the Certificates and distributions thereon, (b) the nature, performance
     and  servicing  of  the  Mortgage  Loans,  (c)  the  Pooling  and Servicing
     Agreement  referred  to  below,  and  (d)  any credit enhancement mechanism
     associated  with  the  Certificates,  that  it  has  requested.

          All  capitalized  terms used but not otherwise defined herein have the
respective  meanings  assigned  thereto  in the Pooling and Servicing Agreement,
dated  as  of  September  1,  2004, among Ameriquest Mortgage Securities Inc. as
Depositor,  Ameriquest  Mortgage  Company  as  Master Servicer and Deutsche Bank
National  Trust  Company  as  Trustee,  pursuant  to which the Certificates were
issued.

                                   [TRANSFEREE]

                                   By: ______________________________
                                   Name:
                                   Title:

                                      F-1-3
<PAGE>
                             ANNEX 1 TO EXHIBIT F-1
                             ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

          The  undersigned  hereby  certifies as follows to [name of Transferor]
(the  "Transferor")  and  Deutsche  Bank National Trust Company as Trustee, with
respect to the mortgage pass-through certificates (the "Certificates") described
in  the  Transferee Certificate to which this certification relates and to which
this  certification  is  an  Annex:

          1.   As  indicated  below,  the  undersigned  is  the President, Chief
Financial  Officer,  Senior  Vice  President  or  other executive officer of the
entity  purchasing  the  Certificates  (the  "Transferee").

          2.   In connection with purchases by the Transferee, the Transferee is
a "qualified institutional buyer" as that term is defined in Rule 144A under the
Securities  Act  of  1933,  as  amended ("Rule 144A") because (i) the Transferee
owned  and/or  invested  on  a  discretionary  basis $______________________1 in
securities  (except for the excluded securities referred to below) as of the end
of  the  Transferee's  most  recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category  marked  below.

     ___  Corporation,  Etc. The Transferee is a corporation (other than a bank,
          savings and loan association or similar institution), Massachusetts or
          similar  business trust, partnership, or any organization described in
          Section  501(c)(3)  of  the Internal Revenue Code of 1986, as amended.

     ___  Bank.  The  Transferee  (a)  is a national bank or banking institution
          organized  under  the  laws of any State, territory or the District of
          Columbia,  the  business of which is substantially confined to banking
          and  is  supervised  by the State or territorial banking commission or
          similar  official  or is a foreign bank or equivalent institution, and
          (b)  has  an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, a copy of which is attached
          hereto.

     ___  Savings  and  Loan.  The  Transferee  (a)  is  a  savings  and  loan
          association,  building  and  loan  association,  cooperative  bank,
          homestead  association or similar institution, which is supervised and
          examined  by  a State or Federal authority having supervision over any
          such  institutions  or  is  a  foreign savings and loan association or
          equivalent  institution  and  (b) has an audited net worth of at least
          1Transferee  must  own and/or invest on a discretionary basis at least
          $100,000,000 in securities unless Transferee is a dealer, and, in that
          case,  Transferee  must  own and/or invest on a discretionary basis at
          least  $10,000,000  in  securities. $25,000,000 as demonstrated in its
          latest  annual  financial  statements,  a  copy  of  which is attached
          hereto.

                                  F-Annex-1-4
<PAGE>
     ___  Broker-Dealer.  The  Transferee  is  a  dealer  registered pursuant to
          Section  15  of  the  Securities  Exchange  Act  of  1934, as amended.

     ___  Insurance  Company.  The  Transferee  is  an  insurance  company whose
          primary  and predominant business activity is the writing of insurance
          or  the  reinsuring  of  risks underwritten by insurance companies and
          which  is  subject  to  supervision by the insurance commissioner or a
          similar  official  or  agency of a State, territory or the District of
          Columbia.

     ___  State  or  Local  Plan.  The  Transferee  is  a  plan  established and
          maintained  by  a  State, its political subdivisions, or any agency or
          instrumentality  of  the  State or its political subdivisions, for the
          benefit  of  its  employees.

     ___  ERISA  Plan.  The  Transferee  is  an employee benefit plan within the
          meaning  of  Title I of the Employee Retirement Income Security Act of
          1974,  as  amended.

     ___  Investment Advisor. The Transferee is an investment advisor registered
          under  the  Investment  Advisers  Act  of  1940,  as  amended.

          3.   The  term  "Securities"  as  used  herein  does  not  include (i)
securities  of  issuers that are affiliated with the Transferee, (ii) securities
that  are  part  of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any  instrumentality  thereof,  (iv)  bank  deposit  notes  and  certificates of
deposit,  (v)  loan participations, (vi) repurchase agreements, (vii) securities
owned  but  subject to a repurchase agreement and (viii) currency, interest rate
and  commodity  swaps.

          4.   For  purposes  of  determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used  the  cost  of such securities to the Transferee and did not include any of
the  securities  referred to in the preceding paragraph. Further, in determining
such  aggregate  amount,  the  Transferee  may have included securities owned by
subsidiaries  of  the Transferee, but only if such subsidiaries are consolidated
with  the  Transferee  in  its  financial statements prepared in accordance with
generally  accepted  accounting  principles  and  if  the  investments  of  such
subsidiaries  are  managed  under  the  Transferee's  direction.  However,  such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary  of  another  enterprise and the Transferee is not itself a reporting
company  under  the  Securities  Exchange  Act  of  1934,  as  amended.

          5.   The  Transferee  acknowledges  that it is familiar with Rule 144A
and  understands  that  the  Transferor  and  other  parties  related  to  the
Certificates are relying and will continue to rely on the statements made herein
because  one  or  more  sales to the Transferee may be in reliance on Rule 144A.

     _____      _____     Will  the  Transferee  be  purchasing the Certificates
     Yes        No        only  for  the  Transferee's  own  account?

          6.   If  the  answer to the foregoing question is "no", the Transferee
agrees  that,  in  connection  with  any  purchase  of  securities  sold  to the
Transferee  for  the  account  of  a  third

                                  F-Annex-1-5
<PAGE>
party  (including any separate account) in reliance on Rule 144A, the Transferee
will  only  purchase  for  the  account  of  a third party that at the time is a
"qualified  institutional  buyer"  within the meaning of Rule 144A. In addition,
the  Transferee  agrees  that  the Transferee will not purchase securities for a
third  party  unless the Transferee has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule 144A
to  conclude  that  such  third  party  independently  meets  the  definition of
"qualified  institutional  buyer"  set  forth  in  Rule  144A.

          7.   The  Transferee  will  notify  each  of the parties to which this
certification  is made of any changes in the information and conclusions herein.
Until  such  notice is given, the Transferee's purchase of the Certificates will
constitute  a  reaffirmation  of  this  certification  as  of  the  date of such
purchase.  In  addition,  if  the  Transferee  is  a bank or savings and loan as
provided  above,  the  Transferee  agrees  that  it will furnish to such parties
updated  annual  financial  statements  promptly  after  they  become available.

Dated:

                                        Print Name of Transferee

                                        By:_____________________________________
                                        Name:
                                        Title:

                                  F-Annex-1-6
<PAGE>
                             ANNEX 2 TO EXHIBIT F-1
                             ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

          The  undersigned  hereby  certifies as follows to [name of Transferor]
(the  "Transferor")  and  Deutsche Bank National Trust Company, as Trustee, with
respect to the mortgage pass-through certificates (the "Certificates") described
in  the  Transferee Certificate to which this certification relates and to which
this  certification  is  an  Annex:

          1.   As  indicated  below,  the  undersigned  is  the President, Chief
Financial  Officer  or  Senior  Vice  President  of  the  entity  purchasing the
Certificates  (the  "Transferee")  or,  if  the  Transferee  is  a  "qualified
institutional  buyer"  as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because the Transferee is part of a Family
of Investment Companies (as defined below), is such an officer of the investment
adviser  (the  "Adviser").

          2.   In connection with purchases by the Transferee, the Transferee is
a  "qualified  institutional  buyer"  as  defined  in  Rule 144A because (i) the
Transferee  is an investment company registered under the Investment Company Act
of  1940,  as  amended,  and  (ii) as marked below, the Transferee alone, or the
Transferee's  Family  of  Investment  Companies,  owned at least $100,000,000 in
securities  (other than the excluded securities referred to below) as of the end
of  the  Transferee's  most  recent fiscal year. For purposes of determining the
amount  of  securities  owned  by  the  Transferee or the Transferee's Family of
Investment  Companies,  the  cost  of  such  securities  was  used.

     ____  The  Transferee  owned $___________________ in securities (other than
the  excluded  securities  referred  to below) as of the end of the Transferee's
most  recent  fiscal  year (such amount being calculated in accordance with Rule
144A).

     ____  The  Transferee  is  part  of  a Family of Investment Companies which
owned  in  the  aggregate $______________ in securities (other than the excluded
securities  referred  to  below)  as  of the end of the Transferee's most recent
fiscal  year  (such  amount  being  calculated  in  accordance  with Rule 144A).

          3.   The  term  "Family  of Investment Companies" as used herein means
two  or  more  registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being  majority  owned subsidiaries of the same parent or because one investment
adviser  is  a  majority  owned  subsidiary  of  the  other).

          4.   The  term  "Securities"  as  used  herein  does  not  include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's  Family  of  Investment  Companies,  (ii)  securities  issued  or
guaranteed  by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and  certificates  of  deposit,  (iv)  loan  participations,  (v)  repurchase
agreements,  (vi)  securities  owned  but  subject to a repurchase agreement and
(vii)  currency,  interest  rate  and  commodity  swaps.

                                  F-Annex-2-1
<PAGE>
          5.   The  Transferee  is  familiar with Rule 144A and understands that
the  parties  to  which  this  certification  is being made are relying and will
continue  to rely on the statements made herein because one or more sales to the
Transferee  will  be  in reliance on Rule 144A. In addition, the Transferee will
only  purchase  for  the  Transferee's  own  account.

          6.   The  undersigned  will  notify  the  parties  to  which  this
certification  is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a  reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                        Print Name of Transferee or Advisor

                                        By:  ___________________________________
                                        Name:
                                        Title:

                                        IF AN ADVISER:

                                        ________________________________________
                                        Print Name of Transferee

                                  F-Annex-2-2
<PAGE>
                    FORM OF TRANSFEREE REPRESENTATION LETTER

     The  undersigned  hereby  certifies  on behalf of the purchaser named below
(the  "Purchaser")  as  follows:

     1.   I  am  an  executive  officer  of  the  Purchaser.

     2.   The Purchaser is a "qualified institutional buyer", as defined in Rule
144A,  ("Rule  144A")  under  the  Securities  Act  of  1933,  as  amended.

     3.   As of the date specified below (which is not earlier than the last day
of  the  Purchaser's  most  recent  fiscal  year),  the  amount of "securities",
computed  for purposes of Rule 144A, owned and invested on a discretionary basis
by  the  Purchaser  was  in  excess  of  $100,000,000.

Name of Purchaser

     _________________________________________________________________

By:     (Signature) ____________________________________________________________

Name of Signatory ______________________________________________________________

Title __________________________________________________________________________

Date of this certificate _______________________________________________________

Date of information provided in paragraph 3 ____________________________________

                                  F-Annex-2-3
<PAGE>
                                   EXHIBIT F-2

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

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

          ____________________________,  being  duly  sworn, deposes, represents
and  warrants  as  follows:

          1.   I  am  a  ______________________  of ____________________________
(the  "Owner")  a  corporation  duly  organized  and  existing under the laws of
______________,  the  record  owner  of  Ameriquest  Mortgage  Securities  Inc.,
Asset-Backed  Pass-Through  Certificates, Series 2004-IA1, Class R (the "Class R
Certificates"),  on  behalf  of  whom  I  make  this  affidavit  and  agreement.
Capitalized  terms  used  but  not  defined  herein have the respective meanings
assigned  thereto  in  the Pooling and Servicing Agreement pursuant to which the
Class  R  Certificates  were  issued.

          2.   The  Owner  (i)  is  and  will  be a "Permitted Transferee" as of
____________________,  2004  and  (ii) is acquiring the Class R Certificates for
its  own  account or for the account of another Owner from which it has received
an  affidavit  in  substantially  the  same form as this affidavit. A "Permitted
Transferee"  is  any  person  other  than  a  "disqualified  organization"  or a
possession of the United States. For this purpose, a "disqualified organization"
means  the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage  Corporation, a majority of whose board of directors is not selected by
any  such  governmental  entity)  or  any  foreign  government,  international
organization  or  any  agency  or  instrumentality of such foreign government or
organization,  any  rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income  tax unless such organization is subject to the tax on unrelated business
taxable  income.

          3.   The  Owner  is  aware  (i)  of  the  tax that would be imposed on
transfers  of  the  Class R Certificates to disqualified organizations under the
Internal  Revenue Code of 1986, as amended, that applies to all transfers of the
Class  R  Certificates  after March 31, 1988; (ii) that such tax would be on the
transferor  or,  if  such  transfer is through an agent (which person includes a
broker,  nominee  or  middleman)  for  a non-Permitted Transferee, on the agent;
(iii)  that  the  person  otherwise  liable  for  the  tax  shall be relieved of
liability  for  the  tax if the transferee furnishes to such person an affidavit
that the transferee is a Permitted Transferee and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
each of the Class R Certificates may be a "noneconomic residual interest" within
the meaning of proposed Treasury regulations promulgated under the Code and that
the  transferor  of a "noneconomic residual interest" will remain liable for any
taxes  due  with  respect  to  the  income  on such residual interest, unless no
significant purpose of the transfer is to impede the assessment or collection of
tax.

                                      F-2-1
<PAGE>
          4.   The  Owner is aware of the tax imposed on a "pass-through entity"
holding  the Class R Certificates if, at any time during the taxable year of the
pass-through  entity,  a  non-Permitted  Transferee  is  the record holder of an
interest  in  such entity. (For this purpose, a "pass-through entity" includes a
regulated  investment  company,  a  real estate investment trust or common trust
fund,  a  partnership,  trust  or  estate,  and  certain  cooperatives.)

          5.   The  Owner  is  aware  that  the  Certificate  Registrar will not
register  the  transfer of any Class R Certificate unless the transferee, or the
transferee's  agent,  delivers to the Certificate Registrar, among other things,
an  affidavit  in  substantially  the  same  form  as  this affidavit. The Owner
expressly  agrees  that  it will not consummate any such transfer if it knows or
believes  that  any  of  the  representations  contained  in  such affidavit and
agreement  are  false.

          6.   The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or  indirectly,  by  an  Owner  that  is  a  Permitted  Transferee.

          7.   The  Owner's  taxpayer  identification  number  is  ____________.

          8.   The  Owner has reviewed the restrictions set forth on the face of
the  Class  R  Certificates and the provisions of Section 5.02(d) of the Pooling
and  Servicing  Agreement  under  which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize the
Trustee  to  deliver  payments  to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in  violation  of  Section  5.02(d));  and that the Owner expressly agrees to be
bound  by  and  to  comply  with  such  restrictions  and  provisions.

          9.   The  Owner  is  not  acquiring  and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.

          10.  The Owner anticipates that it will, so long as it holds the Class
R  Certificates,  have  sufficient assets to pay any taxes owed by the holder of
such  Class  R Certificates, and hereby represents to and for the benefit of the
person  from whom it acquired the Class R Certificates that the Owner intends to
pay  taxes associated with holding such Class R Certificates as they become due,
fully  understanding  that  it  may  incur tax liabilities in excess of any cash
flows  generated  by  the  Class  R  Certificates.

          11.  The  Owner  has no present knowledge that it may become insolvent
or  subject  to  a  bankruptcy  proceeding  for  so long as it holds the Class R
Certificates.

          12.  The Owner has no present knowledge or expectation that it will be
unable  to  pay  any  United  States  taxes  owed  by  it  so long as any of the
Certificates  remain  outstanding.

          13.  The  Owner  is  not  acquiring  the Class R Certificates with the
intent  to  transfer  the Class R Certificates to any person or entity that will
not  have  sufficient assets to pay any taxes owed by the holder of such Class R
Certificates,  or  that  may  become  insolvent  or  subject  to  a  bankruptcy
proceeding,  for  so  long  as  the  Class  R  Certificates  remain outstanding.

                                      F-2-2
<PAGE>
          14.  The  Owner will, in connection with any transfer that it makes of
the  Class  R  Certificates,  obtain  from  its  transferee  the representations
required  by  Section 5.02(d) of the Pooling and Servicing Agreement under which
the Class R Certificate were issued and will not consummate any such transfer if
it  knows,  or  knows  facts  that  should  lead  it  to  believe, that any such
representations  are  false.

          15.  The  Owner will, in connection with any transfer that it makes of
the  Class  R  Certificates,  deliver to the Certificate Registrar an affidavit,
which  represents  and  warrants  that  it  is  not  transferring  the  Class  R
Certificates  to  impede the assessment or collection of any tax and that it has
no actual knowledge that the proposed transferee: (i) has insufficient assets to
pay  any  taxes  owed  by such transferee as holder of the Class R Certificates;
(ii)  may  become insolvent or subject to a bankruptcy proceeding for so long as
the  Class  R  Certificates  remains  outstanding; and (iii) is not a "Permitted
Transferee".

          16.  The  Owner  is  a  citizen  or  resident  of the United States, a
corporation  or  partnership  (or  other  entity  treated  as  a  corporation or
partnership  for  federal income tax purposes) created or organized in, or under
the  laws  of,  the United States, any state thereof or the District of Columbia
(except, in the case of a partnership or entity treated as a partnership, to the
extent  provided  in  regulations),  an estate the income of which is subject to
United  States federal income taxation regardless of its source or a trust other
than  a  "foreign  trust"  described  in  section  7701(a)(31)  of  the  Code.

                                      F-2-3
<PAGE>
          IN  WITNESS  WHEREOF,  the  Owner  has  caused  this  instrument to be
executed  on its behalf, pursuant to the authority of its Board of Directors, by
its  [Vice]  President,  attested by its [Assistant] Secretary, this ____ day of
__________,  200__.

                                        [OWNER]

                                        By:_____________________________________
                                        Name:
                                        Title:  [Vice] President

ATTEST:

By:  ___________________________________
Name:
Title:  [Assistant] Secretary

          Personally  appeared  before me the above-named, known or proved to me
to  be  the same person who executed the foregoing instrument and to be a [Vice]
President  of  the Owner, and acknowledged to me that [he/she] executed the same
as  [his/her]  free  act  and  deed  and  the  free  act  and deed of the Owner.

          Subscribed  and  sworn  before  me this ____ day of __________, 200__.

                                        _________________________________
                                             Notary Public

                                        County of _____________________
                                        State of __________________________

                                        My Commission expires:

                                      F-2-4
<PAGE>
                          FORM OF TRANSFEROR AFFIDAVIT

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

          _______________________________________,  being  duly  sworn, deposes,
represents  and  warrants  _____________________________  as  follows:

          1.   I  am a ____________________ of (the "Owner"), a corporation duly
organized  and  existing  under  the laws of ______________, on behalf of whom I
make  this  affidavit.

          2.   The  Owner  is  not  transferring  the  Class  R  (the  "Residual
Certificates")  to  impede  the  assessment  or  collection  of  any  tax.

          3.   The  Owner  has  no  actual knowledge that the Person that is the
proposed  transferee  (the  "Purchaser")  of  the Residual Certificates: (i) has
insufficient  assets to pay any taxes owed by such proposed transferee as holder
of  the  Residual  Certificates;  (ii)  may  become  insolvent  or  subject to a
bankruptcy  proceeding  for  so  long  as  the  Residual  Certificates  remain
outstanding  and  (iii)  is  not  a  Permitted  Transferee.

          4.   The  Owner  understands  that  the Purchaser has delivered to the
Certificate Registrar a transfer affidavit and agreement in the form attached to
the  Pooling  and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe  that  any  representation  contained  therein  is  false.

          5.   At  the  time  of  transfer, the Owner has conducted a reasonable
investigation  of  the  financial  condition of the Purchaser as contemplated by
Treasury  Regulations  Section  1.860E-1(c)(4)(i)  and,  as  a  result  of  that
investigation, the Owner has determined that the Purchaser has historically paid
its  debts  as they became due and has found no significant evidence to indicate
that  the Purchaser will not continue to pay its debts as they become due in the
future.  The  Owner  understands that the transfer of a Residual Certificate may
not  be  respected  for  United  States  income  tax purposes (and the Owner may
continue  to  be  liable  for  United  States income taxes associated therewith)
unless  the  Owner  has  conducted  such  an  investigation.

          6.   Capitalized  terms  not  otherwise  defined herein shall have the
meanings  ascribed  to  them  in  the  Pooling  and  Servicing  Agreement.

                                      F-2-5
<PAGE>
          IN  WITNESS  WHEREOF,  the  Owner  has  caused  this  instrument to be
executed  on its behalf, pursuant to the authority of its Board of Directors, by
its  [Vice]  President,  attested by its [Assistant] Secretary, this ____ day of
___________,  200__.

                                        [OWNER]

                                        By:_____________________________________
                                        Name:
                                        Title:  [Vice] President

ATTEST:

By:  ___________________________________
Name:
Title:  [Assistant] Secretary

          Personally  appeared  before me the above-named, known or proved to me
to  be  the same person who executed the foregoing instrument and to be a [Vice]
President  of  the Owner, and acknowledged to me that [he/she] executed the same
as  [his/her]  free  act  and  deed  and  the  free  act  and deed of the Owner.

          Subscribed  and  sworn  before  me this ____ day of __________, 200__.

                                        ______________________________
                                        Notary Public

                                        County of _____________________________
                                        State of _____________________________
                                        My Commission expires:

                                      F-2-6
<PAGE>
                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                           _____________,  200__

Ameriquest Mortgage Securities Inc.  Deutsche Bank National Trust Company
1100 Town & Country Road             1761 East St. Andrew Place
Orange, California 92868             Santa Ana, California 92705-4934
Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

     Re:  Ameriquest  Mortgage  Securities  Inc.,  Asset-Backed  Pass-Through
          Certificates,  Series  2004-IA1,  Class  CE,  P,  R  ,  [M-9]
          -------------------------------------------------------------------

Dear  Ladies  and  Gentlemen:

     __________________________________  (the  "Transferee")  intends to acquire
from  _____________________ (the "Transferor") $____________ Initial Certificate
Principal  Balance  of  Ameriquest  Mortgage  Securities  Inc.,  Asset-Backed
Pass-Through  Certificates,  Series  2004-IA1,  Class  ___ (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement")  dated  as of September 1, 2004 among Ameriquest Mortgage Securities
Inc.  as  depositor  (the  "Depositor"),  Ameriquest  Mortgage Company as master
servicer  (the  "Master  Servicer")  and Deutsche Bank National Trust Company as
trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned thereto in the Pooling and Servicing Agreement.
The  Transferee hereby certifies, represents and warrants to, and covenants with
the Depositor, the Trustee and the Master Servicer that the following statements
in  either  (1)  or  (2)  are  accurate:

     1.   The  Certificates  (i)  are  not  being  acquired  by, and will not be
transferred  to, any employee benefit plan within the meaning of section 3(3) of
the  Employee  Retirement  Income Security Act of 1974, as amended ("ERISA"), or
other  retirement  arrangement,  including  individual  retirement  accounts and
annuities,  Keogh  plans  and  bank  collective  investment  funds and insurance
company  general  or  separate  accounts  in  which  such  plans,  accounts  or
arrangements  are  invested,  that is subject to Section 406 of ERISA or Section
4975  of  the Internal Revenue Code of 1986, as amended (the "Code") (any of the
foregoing,  a  "Plan"), (ii) are not being acquired with "plan assets" of a Plan
within  the meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss.
2510.3-101, and (iii) will not be transferred to any entity that is deemed to be
investing  in  plan  assets  within  the  meaning  of  the  DOL regulation at 29
C.F.R.ss.2510.3-101.

     2.   [For  Class  M-9  Certificates  only]  The Class M-9 Certificates have
been  offered  in  an underwriting or placement within the meaning of Prohibited
Transaction  Exemption  2002-41,  as  amended.

                                      G-1-1
<PAGE>
     [Use  for  the first transfer of a Class M-9 Certificate after the offering
or  placement.]

                                      G-1-2
<PAGE>
                                        Very truly yours,

                                        By: ____________________________________
                                        Name:
                                        Title:

                                      G-1-2
<PAGE>
                                    EXHIBIT H

                              FORM OF CAP CONTRACTS

                             Available Upon Request

                                      H-1-1
<PAGE>
<TABLE>
<CAPTION>
                                    EXHIBIT I

                           LOSS MITIGATION ACTION PLAN

<S>                                     <C>
--------------------------------------  ----------------------------------------------------
DEFAULT MITIGATION ACTION               SUPPORTING STANDARDS
--------------------------------------  ----------------------------------------------------
Forbearance Workout                     Borrower documents a temporary financial
Defer any of the following:             hardship resulting in request for a forbearance
1.accrued interest                      Borrower documents financial ability to pay
2.past due principal                    under the proposed forbearance terms
3.escrow advances                       Borrower expresses a willingness to perform.
4.corporate advances                    Current monthly payments are scheduled to be
5.ancillary fees                        made prior to late charge date during the
6.any combination of the above          forbearance term
--------------------------------------  ----------------------------------------------------
Loan Modification Workout               Borrower documents a non-temporary financial
Any of the following:                   hardship resulting in the request for a loan
1.waive accrued interest                modification
2.waive past due principal              Borrower documents financial ability to pay
3.waive corporate advances              under the proposed loan modification terms
4.waive ancillary fees                  Borrower does not have the ability to pay under
5.reduce principal                      the original loan terms
6.reduce interest rate                  Borrower expresses a willingness to perform
7.any combination of the above items    No waiver of escrow advances (taxes and
8.any combination with the Forbearance  insurance) is allowed
items
--------------------------------------  ----------------------------------------------------
Short Sale Disposal                     Sale to a third party
Waive or negotiate a reduced amount of  Independent appraisal supports sale price
any of the following:                   No cash to seller (borrower), excluding costs
1.accrued interest                      necessary to close
2.principal                             Borrower does not have the ability and/or
3.escrow advances                       willingness to pay
4.corporate advances                    Borrower no longer wants property
5.ancillary fees
6.prepayment charges
7.any combination of the above items
--------------------------------------  ----------------------------------------------------
Short pay-off Disposal                  Refinance by independent third party Lender
Waive or negotiate a reduced amount of  Independent appraisal supports new loan amount
any of the following:                   New loan is no cash out (i.e. no cash to borrower
1.accrued interest                      excluding costs necessary to close)
2.principal                             Borrower has expressed his/her unwillingness to
3.escrow advances                       pay
4.corporate advances                    Anticipated refinance time frame is less than
5.ancillary fees                        anticipated foreclosure time frame
6.prepayment charges
--------------------------------------  ----------------------------------------------------

                                      I-1-1
<PAGE>
--------------------------------------  ----------------------------------------------------
DEFAULT MITIGATION ACTION               SUPPORTING STANDARDS
--------------------------------------  ----------------------------------------------------
7.any combination of the above items
--------------------------------------  ----------------------------------------------------
Deed-in-lieu Disposal                   Borrower has already or will abandon the
---------------------                   property or is willing to vacate the property (in a
                                        broom sweep condition) on a mutually agreeable
                                        date
                                        Borrower does not have the ability and/or
                                        willingness to pay
                                        Independent appraisal confirms property has a
                                        value
                                        Title is clean
                                        Property appears to be resalable based on
                                        condition and value shown in independent
                                        appraisal
                                        Property does not appear to have any
                                        environmental or hazardous conditions (or such
                                        conditions appear to be curable)
--------------------------------------  ----------------------------------------------------
Foreclosure Disposal                    Borrower has already or will abandon the
--------------------                    property (which may be by an eviction
                                        proceeding or mutual agreement)
                                        Borrower does not have the ability and/or
                                        willingness to pay
                                        Independent appraisal confirms property has a
                                        value
                                        Property appears to be resalable based on
                                        condition and value shown in independent
                                        appraisal
                                        Property does not appear to have any
                                        environmental or hazardous conditions (or such
                                        conditions appear to be curable)
--------------------------------------  ----------------------------------------------------
</TABLE>

     Workouts  in  the form of either a Forbearance or Loan Modification require
that  the Borrower document the existence of a financial hardship leading to the
payment delinquency and document the ability to make the payments required under
the  proposed  Forbearance  or Loan Modification.  If the Borrower fails to meet
both  of  these  conditions  or  the  Borrower is uncooperative, a Disposal Loss
Mitigation  Action  will  be employed to liquidate the delinquent loan, assuming
the  Borrower  does not otherwise cure the existing default. Each of the Default
Mitigation  Actions  and  Supporting Standards may not be applicable to each and
every loan subject to a default in its monthly payments and in those cases where
a  Default  Mitigation  Action or Supporting Standard may be applicable, each is
subject to amendment and/or waiver on an individual basis pursuant to applicable
federal,  state  and  local  laws,  decisional  authorities,  court  orders,
instructions  of regulatory and/or other governmental authorities, the advice of
legal  counsel,  instructions from the Trustee and changes in the loan servicing
standards.

                                      I-1-2
<PAGE>
                                   EXHIBIT J-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

          Re:  Ameriquest  Mortgage  Securities  Inc.,
               Asset-Backed  Certificates,  Series  2004-IA1
               ---------------------------------------------

          I,  [identify  the  certifying  individual],  certify  that:

          1.   I  have reviewed this annual report on Form 10-K, and all reports
on  Form  8-K  containing  distribution or servicing reports filed in respect of
periods  included  in  the  year  covered  by  this annual report, of Ameriquest
Mortgage  Securities  Inc.,  Asset-Backed  Certificates,  Series  2004-IA1;

          2.   Based on my knowledge, the information in these reports, taken as
a  whole,  does  not  contain any untrue statement of a material fact or omit to
state  a  material  fact  necessary to make the statements made, in light of the
circumstances  under  which  such statements were made, not misleading as of the
last  day  of  the  period  covered  by  this  annual  report;

          3.   Based  on my knowledge, the distribution or servicing information
required  to  be  provided  to the trustee by the servicer under the pooling and
servicing,  or similar, agreement, for inclusion in these reports is included in
these  reports;

          4.   Based  on  my  knowledge and upon the annual compliance statement
included in the report and required to be delivered to the trustee in accordance
with  the  terms of the pooling and servicing, or similar, agreement, and except
as  disclosed  in  the reports, the servicer has fulfilled its obligations under
the  servicing  agreement;  and

          5.   The reports disclose all significant deficiencies relating to the
servicer's compliance with the minimum servicing standards based upon the report
provided  by  an  independent  public  accountant,  after conducting a review in
compliance  with  the Uniform Single Attestation Program for Mortgage Bankers or
similar  procedure,  as  set  forth  in  the  pooling and servicing, or similar,
agreement,  that  is  included  in  these  reports.

          In  giving  the  certifications  above,  I  have  reasonably relied on
information  provided to me by the following unaffiliated parties: Deutsche Bank
National  Trust  Company.

                                        AMERIQUEST MORTGAGE SECURITIES INC.

                                        Date: __________________

                                        ________________________
                                        [Signature]
                                        [Title]

                                      J-1-1
<PAGE>
                                   EXHIBIT J-2

                            FORM CERTIFICATION TO BE

                      PROVIDED TO DEPOSITOR BY THE TRUSTEE

          Re:  Ameriquest  Mortgage  Securities  Inc.,
               Asset-Backed  Certificates,  Series  2004-IA1
               ---------------------------------------------

          I,  [identify  the  certifying individual], a [title] of Deutsche Bank
National  Trust  Company,  as  Trustee,  hereby  certify  to Ameriquest Mortgage
Securities  Inc.  (the "Depositor"), and its officers, directors and affiliates,
and  with  the knowledge and intent that they will rely upon this certification,
that:

          1.   I  have  reviewed  the  annual report on Form 10-K for the fiscal
year [___], and all reports on Form 8-K containing distribution reports filed in
respect  of  periods  included in the year covered by that annual report, of the
Depositor  relating  to  the  above-referenced  trust;

          2.   Based  on  my  knowledge,  the  information in these distribution
reports  prepared  by the Trustee, taken as a whole, does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  as  of  the last day of the period covered by that
annual  report;  and

          3.   Based  on  my knowledge, the distribution information required to
be provided by the Trustee under the Pooling and Servicing Agreement is included
in  these  distribution  reports.

          Capitalized  terms  used  but  not  defined  herein  have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated September 1, 2004
(the  "Pooling  and  Servicing  Agreement"),  among  the Depositor as depositor,
Ameriquest  Mortgage Company as master servicer and Deutsche Bank National Trust
Company  as  trustee.

                                        DEUTSCHE BANK NATIONAL TRUST
                                        COMPANY, as Trustee

                                        By:__________________________________
                                        Name:
                                        Title:
                                        Date:

                                      J-2-1
<PAGE>
                                    EXHIBIT K

             ANNUAL STATEMENT OF COMPLIANCE PURSUANT TO SECTION 3.19

                             Available Upon Request

                                      K-1-1
<PAGE>
                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                 Filed By Paper

                                  Schedule 1-1
<PAGE>
                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                             Available Upon Request

                                  Schedule 2-1ACE SECURITIES CORP.
                                    Depositor

                             OCWEN FEDERAL BANK FSB
                                    Servicer

                             WELLS FARGO BANK, N.A.
                  Master Servicer and Securities Administrator

                       HSBC BANK USA, NATIONAL ASSOCIATION
                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                          Dated as of September 1, 2004

          ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE2
                     Asset Backed Pass-Through Certificates

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

<S>                                                                                                              <C>
      ARTICLE I DEFINITIONS.......................................................................................4

   SECTION 1.01.           Defined Terms..........................................................................4

      Accepted Master Servicing Practices.........................................................................4

      Accepted Servicing Practices................................................................................4

      Account.....................................................................................................4

      Accrued Certificate Interest................................................................................4

      Adjustable Rate Mortgage Loan...............................................................................4

      Adjustment Date.............................................................................................5

      Administration Fees.........................................................................................5

      Administration Fee Rate.....................................................................................5

      Advance Facility............................................................................................5

      Advance Financing Person....................................................................................5

      Advance Reimbursement Amounts...............................................................................5

      Affiliate...................................................................................................5

      Aggregate Loss Severity Percentage..........................................................................5

      Agreement...................................................................................................5

      Allocated Realized Loss Amount..............................................................................5

      Amounts Held for Future Distribution........................................................................5

      Assignment..................................................................................................5

      Authorized Officers.........................................................................................6

      Available Distribution Amount...............................................................................6

      Avoided Payment.............................................................................................6

      Balloon Mortgage Loan.......................................................................................6

      Balloon Payment.............................................................................................6

      Bankruptcy Code.............................................................................................6

      Book-Entry Certificates.....................................................................................6

      Book-Entry Custodian........................................................................................6

      Business Day................................................................................................7

      Cap Contracts...............................................................................................7

      Cash-Out Refinancing........................................................................................7

      Certificate.................................................................................................7

      Certificate Factor..........................................................................................7
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Certificate Insurance Policy................................................................................7

      Certificate Insurer.........................................................................................7

      Certificate Insurer Default.................................................................................7

      Certificate Margin..........................................................................................8

      Certificateholder...........................................................................................9

      Certificate Owner...........................................................................................9

      Certificate Principal Balance...............................................................................9

      Certificate Register.......................................................................................10

      Class......................................................................................................10

      Class A Certificate........................................................................................10

      Class A Principal Distribution Amount......................................................................10

      Class A-1 Allocation Percentage............................................................................10

      Class A-1 Certificate......................................................................................10

      Class A-1 Certificate Deficiency Amount....................................................................10

      Class A-1 Principal Distribution Amount....................................................................11

      Class A-1 Principal Loss Amount............................................................................11

      Class A-2 Allocation Percentage............................................................................11

      Class A-2 Certificate......................................................................................11

      Class A-2A Certificate.....................................................................................11

      Class A-2B Certificate.....................................................................................11

      Class A-2C Certificate.....................................................................................11

      Class A-2 Principal Distribution Amount....................................................................12

      Class B Certificate........................................................................................12

      Class B Principal Distribution Amount......................................................................12

      Class B-1 Certificate......................................................................................12

      Class B-2 Certificate......................................................................................12

      Class B-1 Principal Distribution Amount....................................................................12

      Class B-2 Principal Distribution Amount....................................................................13

      Class CE Certificate.......................................................................................13

      Class M Certificates.......................................................................................13

      Class M-1 Certificate......................................................................................13

      Class M-1 Principal Distribution Amount....................................................................14

      Class M-2 Certificate......................................................................................14
</TABLE>

                                                        ii

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Class M-2 Principal Distribution Amount....................................................................14

      Class M-3 Certificate......................................................................................14

      Class M-3 Principal Distribution Amount....................................................................15

      Class M-4 Certificate......................................................................................15

      Class M-4 Principal Distribution Amount....................................................................15

      Class M-5 Certificate......................................................................................16

      Class M-5 Principal Distribution Amount....................................................................16

      Class M-6 Certificate......................................................................................16

      Class M-6 Principal Distribution Amount....................................................................16

      Class P Certificate........................................................................................17

      Class R Certificates.......................................................................................17

      Class R-I Interest.........................................................................................17

      Class R-II Interest........................................................................................17

      Closing Date...............................................................................................17

      Code.......................................................................................................17

      Collection Account.........................................................................................17

      Commission.................................................................................................17

      Corporate Trust Office.....................................................................................17

      Corresponding Certificate..................................................................................18

      Credit Enhancement Percentage..............................................................................18

      Credit Risk Management Agreements..........................................................................18

      Credit Risk Management Fee.................................................................................18

      Credit Risk Management Fee Rate............................................................................18

      Credit Risk Manager........................................................................................18

      Custodial Agreement........................................................................................18

      Custodian..................................................................................................18

      Cut-off Date...............................................................................................19

      Debt Service Reduction.....................................................................................19

      Deficient Valuation........................................................................................19

      Definitive Certificates....................................................................................19

      Deleted Mortgage Loan......................................................................................19

      Delinquency Percentage.....................................................................................19
</TABLE>

                                                        iii

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Depositor..................................................................................................19

      Depository.................................................................................................19

      Depository Institution.....................................................................................19

      Depository Participant.....................................................................................20

      Determination Date.........................................................................................20

      Directly Operate...........................................................................................20

      Disqualified Organization..................................................................................20

      Distribution Account.......................................................................................20

      Distribution Date..........................................................................................20

      Due Date...................................................................................................21

      Due Period.................................................................................................21

      Eligible Account...........................................................................................21

      ERISA......................................................................................................21

      Estate in Real Property....................................................................................21

      Excess Liquidation Proceeds................................................................................21

      Expense Adjusted Mortgage Rate.............................................................................21

      Extraordinary Trust Fund Expense...........................................................................21

      Extra Principal Distribution Amount........................................................................21

      Fannie Mae.................................................................................................21

      FDIC.......................................................................................................21

      Final Maturity Date........................................................................................21

      Final Recovery Determination...............................................................................22

      Freddie Mac................................................................................................22

      Gross Margin...............................................................................................22

      Group I Interest Remittance Amount.........................................................................22

      Group I Mortgage Loans.....................................................................................22

      Group I Principal Distribution Amount......................................................................22

      Group I Principal Remittance Amount........................................................................22

      Group II Interest Remittance Amount........................................................................22

      Group II Mortgage Loans....................................................................................23

      Group II Principal Distribution Amount.....................................................................23

      Group II Principal Remittance Amount.......................................................................23

      Independent................................................................................................23

      Independent Contractor.....................................................................................23
</TABLE>

                                                        iv

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Index......................................................................................................24

      Insolvency Proceeding......................................................................................24

      Institutional Accredited Investor..........................................................................24

      Insurance Agreement........................................................................................24

      Insurance Proceeds.........................................................................................24

      Insured Certificates.......................................................................................24

      Insured Payments...........................................................................................24

      Interest Accrual Period....................................................................................24

      Interest Carry Forward Amount..............................................................................24

      Interest Distribution Amount...............................................................................25

      Interest Remittance Amount.................................................................................25

      Last Scheduled Distribution Date...........................................................................25

      Late Collections...........................................................................................25

      Liquidation Event..........................................................................................25

      Liquidation Proceeds.......................................................................................25

      Loan-to-Value Ratio........................................................................................26

      London Business Day........................................................................................26

      Loss Severity Percentage...................................................................................26

      Marker Rate................................................................................................26

      Master Servicer............................................................................................26

      Master Servicer Certification..............................................................................26

      Master Servicer Event of Default...........................................................................27

      Master Servicer Fee Rate...................................................................................27

      Master Servicing Fee.......................................................................................27

      Maximum I-LTZZ Uncertificated Interest Deferral Amount.....................................................27

      Maximum Mortgage Rate......................................................................................27

      MERS.......................................................................................................27

      MERS(R) System...............................................................................................27

      Mezzanine Certificate......................................................................................27

      MIN........................................................................................................27

      Minimum Mortgage Rate......................................................................................27

      MOM Loan...................................................................................................28

      Monthly Payment............................................................................................28
</TABLE>

                                                         v

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Moody's....................................................................................................28

      Mortgage...................................................................................................28

      Mortgage File..............................................................................................28

      Mortgage Loan..............................................................................................28

      Mortgage Loan Documents....................................................................................28

      Mortgage Loan Purchase Agreement...........................................................................28

      Mortgage Loan Schedule.....................................................................................28

      Mortgage Note..............................................................................................30

      Mortgage Rate..............................................................................................30

      Mortgaged Property.........................................................................................31

      Mortgagor..................................................................................................31

      Net Monthly Excess Cashflow................................................................................31

      Net Mortgage Rate..........................................................................................31

      Net WAC Pass-Through Rate..................................................................................31

      Net WAC Rate Carryover Amount..............................................................................32

      New Lease..................................................................................................33

      Nonrecoverable P&I Advance.................................................................................33

      Nonrecoverable Servicing Advance...........................................................................33

      Non-United States Person...................................................................................33

      Notional Amount............................................................................................33

      Offered Certificates.......................................................................................33

      Officer's Certificate......................................................................................33

      One-Month LIBOR............................................................................................33

      One-Month LIBOR Pass-Through Rate..........................................................................34

      Opinion of Counsel.........................................................................................35

      Optional Termination Date..................................................................................35

      Originators................................................................................................35

      Overcollateralization Amount...............................................................................35

      Overcollateralization Increase Amount......................................................................35

      Overcollateralization Reduction Amount.....................................................................35

      Ownership Interest.........................................................................................36

      P&I Advance................................................................................................36

      Pass-Through Rate..........................................................................................36
</TABLE>

                                                        vi

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Percentage Interest........................................................................................37

      Periodic Rate..............................................................................................38

      Permitted Investments......................................................................................38

      Permitted Transferee.......................................................................................39

      Person.....................................................................................................39

      Plan.......................................................................................................39

      Policy Payment.............................................................................................40

      Policy Payment Account.....................................................................................40

      Premium Amount.............................................................................................40

      Premium Rate...............................................................................................40

      Prepayment Assumption......................................................................................40

      Prepayment Charge..........................................................................................40

      Prepayment Charge Schedule.................................................................................40

      Prepayment Interest Excess.................................................................................41

      Prepayment Interest Shortfall..............................................................................41

      Prepayment Period..........................................................................................41

      Principal Prepayment.......................................................................................41

      Principal Distribution Amount..............................................................................41

      Principal Remittance Amount................................................................................41

      Purchase Price.............................................................................................42

      QIB........................................................................................................42

      Qualified Substitute Mortgage Loan.........................................................................42

      Rate/Term Refinancing......................................................................................43

      Rating Agency or Rating Agencies...........................................................................43

      Realized Loss..............................................................................................43

      Record Date................................................................................................44

      Reference Banks............................................................................................44

      Refinanced Mortgage Loan...................................................................................45

      Regular Certificate........................................................................................45

      Regular Interest...........................................................................................45

      Regulation S Temporary Global Certificate..................................................................45

      Regulation S Permanent Global..............................................................................45

      Reimbursement Amount.......................................................................................45
</TABLE>

                                                        vii

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Release Date...............................................................................................45

      Relief Act.................................................................................................45

      Relief Act Interest Shortfall..............................................................................45

      REMIC......................................................................................................45

      REMIC I....................................................................................................45

      REMIC I Interest Loss Allocation Amount....................................................................46

      REMIC I Marker Allocation Percentage.......................................................................46

      REMIC I Overcollateralization..............................................................................46

      REMIC I Principal Loss Allocation Amount...................................................................46

      REMIC I Regular Interest...................................................................................47

      REMIC I Regular Interest I-LTAA............................................................................47

      REMIC I Regular Interest I-LTA1............................................................................47

      REMIC I Regular Interest I-LTA2A...........................................................................47

      REMIC I Regular Interest I-LTA2B...........................................................................47

      REMIC I Regular Interest I-LTA2C...........................................................................47

      REMIC I Regular Interest I-LTB1............................................................................47

      REMIC I Regular Interest I-LTB2............................................................................48

      REMIC I Regular Interest I-LTM1............................................................................48

      REMIC I Regular Interest I-LTM2............................................................................48

      REMIC I Regular Interest I-LTM3............................................................................48

      REMIC I Regular Interest I-LTM4............................................................................48

      REMIC I Regular Interest I-LTM5............................................................................48

      REMIC I Regular Interest I-LTM6............................................................................48

      REMIC I Regular Interest I-LTP.............................................................................49

      REMIC I Regular Interest I-LTXX............................................................................49

      REMIC I Regular Interest I-LTZZ............................................................................49

      REMIC I Regular Interest I-LT1.............................................................................49

      REMIC I Regular Interest I-LT1.............................................................................49

      REMIC I Regular Interest I-LT2A............................................................................49

      REMIC I Regular Interest I-LT2B............................................................................49

      REMIC I Remittance Rate....................................................................................50

      REMIC I Sub WAC Allocation Percentgage.....................................................................50

      REMIC I Subordinated Balance Ratio.........................................................................50
</TABLE>

                                                       viii

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      REMIC I Required Overcollateralization.....................................................................50

      REMIC II...................................................................................................50

      REMIC II Certificate.......................................................................................50

      REMIC II Certificateholder.................................................................................50

      REMIC Provisions...........................................................................................50

      REMIC Regular Interest.....................................................................................50

      REMIC Remittance Rate......................................................................................50

      Remittance Report..........................................................................................51

      Rents from Real Property...................................................................................51

      REO Account................................................................................................51

      REO Disposition............................................................................................51

      REO Imputed Interest.......................................................................................51

      REO Principal Amortization.................................................................................51

      REO Property...............................................................................................51

      Required Overcollateralization.............................................................................51

      Reserve Fund...............................................................................................51

      Reserve Interest Rate......................................................................................51

      Residential Dwelling.......................................................................................52

      Residual Certificate.......................................................................................52

      Residual Interest..........................................................................................52

      Responsible Officer........................................................................................52

      Rule.......................................................................................................52

      S&P........................................................................................................52

      Scheduled Principal Blance.................................................................................52

      Securities.................................................................................................53

      Securities Administrator...................................................................................53

      Seller.....................................................................................................53

      Senior Interest Distribution Amount........................................................................53

      Servicer...................................................................................................53

      Servicer Event of Default..................................................................................53

      Servicer Remittance Date...................................................................................53

      Servicer Report............................................................................................53

      Servicing Advance..........................................................................................53
</TABLE>

                                                        ix

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      Servicing Fee..............................................................................................54

      Servicing Fee Rate.........................................................................................54

      Servicing Officer..........................................................................................54

      Single Certificate.........................................................................................54

      Startup Day................................................................................................54

      Stated Principal Balance...................................................................................54

      Stepdown Date..............................................................................................55

      Subordinate Certificates...................................................................................55

      Subsequent Recoveries......................................................................................55

      Sub-Servicer...............................................................................................55

      Sub-Servicing Agreement....................................................................................55

      Substitution Shortfall Amount..............................................................................55

      Tax Returns................................................................................................55

      Telerate Page..............................................................................................55

      Termination Price..........................................................................................55

      Terminator.................................................................................................55

      Transfer...................................................................................................56

      Pass-Through Rate..........................................................................................56

      Transferee.................................................................................................56

      Transferor.................................................................................................56

      Trigger Event..............................................................................................56

      Trust......................................................................................................56

      Trust Fund.................................................................................................56

      Trust REMIC................................................................................................56

      Trustee....................................................................................................56

      Uncertificated Balance.....................................................................................56

      Uncertificated Interest....................................................................................57

      Uninsured Cause............................................................................................57

      United States Person.......................................................................................57

      Value......................................................................................................57

      Verification Report........................................................................................58

      Voting Rights..............................................................................................58

      Wells Fargo................................................................................................58
</TABLE>

                                                         x

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
   SECTION 1.02.           Allocation of Certain Interest Shortfalls.............................................58

      ARTICLE II CONVEYANCE OF MORTGAGE LOANS;...................................................................60

   SECTION 2.01.           Conveyance of the Mortgage Loans......................................................60

   SECTION 2.02.           Acceptance of REMIC I by Trustee......................................................61

   SECTION 2.03.           Repurchase or Substitution of Mortgage Loans..........................................61

   SECTION 2.04.           Representations and Warranties of the Master Servicer.................................64

   SECTION 2.05.           Representations, Warranties and Covenants of the Servicer.............................65

   SECTION 2.06.           Issuance of the REMIC I Regular Interests and the Class R-I Interest..................67

   SECTION 2.07.           Conveyance of the REMIC I Regular Interests; Acceptance of REMIC I by the Trustee.....68

   SECTION 2.08.           Issuance of Residual Certificates.....................................................68

   SECTION 2.09.           Establishment of the Trust............................................................68

      ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS...................................69

   SECTION 3.01.           The Servicer to Act as a Servicer.....................................................69

   SECTION 3.02.           Sub-Servicing Agreements Between the Servicer and Sub-Servicers.......................71

   SECTION 3.03.           Successor Sub-Servicers...............................................................71

   SECTION 3.04.           No Contractual Relationship Between Sub-Servicer, Trustee or the Certificateholders...72

   SECTION 3.05.           Assumption or Termination of Sub-Servicing Agreement by Successor Servicer............72

   SECTION 3.06.           Collection of Certain Mortgage Loan Payments..........................................72

   SECTION 3.07.           Collection of Taxes, Assessments and Similar Items; Servicing Accounts................73

   SECTION 3.08.           Collection Account and Distribution Account...........................................74

   SECTION 3.09.           Withdrawals from the Collection Account and Distribution Account......................76

   SECTION 3.10.           Investment of Funds in the Investment Accounts........................................78

   SECTION 3.11.           Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage and
                           Primary Mortgage Insurance............................................................79

   SECTION 3.12.           Enforcement of Due-on-Sale Clauses; Assumption Agreements.............................81

   SECTION 3.13.           Realization Upon Defaulted Mortgage Loans.............................................82

   SECTION 3.14.           Trustee to Cooperate; Release of Mortgage Files.......................................84

   SECTION 3.15.           Servicing Compensation................................................................85

   SECTION 3.16.           Collection Account Statements.........................................................85

   SECTION 3.17.           Statement as to Compliance............................................................86

   SECTION 3.18.           Independent Public Accountants' Servicing Report......................................86
</TABLE>

                                                        xi

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
   SECTION 3.19.           Annual Certification..................................................................86

   SECTION 3.20.           Access to Certain Documentation.......................................................87

   SECTION 3.21.           Title, Management and Disposition of REO Property.....................................87

   SECTION 3.22.           Obligations of the Servicer in Respect of Prepayment Interest Shortfalls;
                           Relief Act Interest Shortfalls........................................................90

   SECTION 3.23.           Obligations of the Servicer in Respect of Mortgage Rates and  Monthly Payments........91

   SECTION 3.24.           Reserve Fund..........................................................................91

   SECTION 3.25.           Advance Facility......................................................................92

   SECTION 3.26.           The Servicer Indemnification..........................................................94

   SECTION 3.27.           Certificate Insurer Access............................................................95

      ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER................96

   SECTION 4.01.           Master Servicer.......................................................................96

   SECTION 4.02.           REMIC-Related Covenants...............................................................97

   SECTION 4.03.           Monitoring of Servicer................................................................97

   SECTION 4.04.           Fidelity Bond.........................................................................98

   SECTION 4.05.           Power to Act; Procedures..............................................................98

   SECTION 4.06.           Due-on-Sale Clauses; Assumption Agreements............................................99

   SECTION 4.07.           Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee..99

   SECTION 4.08.           Standard Hazard Insurance and Flood Insurance Policies...............................100

   SECTION 4.09.           Presentment of Claims and Collection of Proceeds.....................................100

   SECTION 4.10.           Maintenance of Primary Mortgage Insurance Policies...................................100

   SECTION 4.11.           Trustee to Retain Possession of Certain Insurance Policies and Documents.............101

   SECTION 4.12.           Realization Upon Defaulted Mortgage Loans............................................101

   SECTION 4.13.           Compensation for the Master Servicer.................................................101

   SECTION 4.14.           REO Property.........................................................................101

   SECTION 4.15.           Annual Officer's Certificate as to Compliance........................................102

   SECTION 4.16.           Annual Independent Accountant's Servicing Report.....................................102

   SECTION 4.17.           UCC..................................................................................103

   SECTION 4.18.           Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls.......103

   SECTION 4.19.           Prepayment Penalty Verification......................................................103
</TABLE>

                                                        xii

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
      ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS..................................................................105

   SECTION 5.01.           Distributions........................................................................105

   SECTION 5.02.           Statements to Certificateholders.....................................................118

   SECTION 5.03.           Servicer Reports; P&I Advances.......................................................121

   SECTION 5.04.           Allocation of Realized Losses........................................................123

   SECTION 5.05.           Compliance with Withholding Requirements.............................................125

   SECTION 5.06.           Reports Filed with Securities and Exchange Commission................................126
   SECTION 5.07.           The Certificate Insurance Policy.....................................................126

   SECTION 5.08.           Effect of Payments by the Certificate Insurer; Subrogation...........................129

      ARTICLE VI THE CERTIFICATES...............................................................................130

   SECTION 6.01.           The Certificates.....................................................................130

   SECTION 6.02.           Registration of Transfer and Exchange of Certificates................................132

   SECTION 6.03.           Mutilated, Destroyed, Lost or Stolen Certificates....................................137

   SECTION 6.04.           Persons Deemed Owners................................................................138

   SECTION 6.05.           Certain Available Information........................................................138

   SECTION 6.06.           Rights of the Certificate Insurer to Exercise Rights of Class A-1 Certificateholders.138

   SECTION 6.07.           Certificate Insurer Default..........................................................139

      ARTICLE VII THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER...........................................140

   SECTION 7.01.           Liability of the Depositor, the Servicer and the Master Servicer.....................140

   SECTION 7.02.           Merger or Consolidation of the Depositor, the Servicer or the Master Servicer........140

   SECTION 7.03.           Limitation on Liability of the Depositor, the Servicer, the Master Servicer and Others.140

   SECTION 7.04.           Limitation on Resignation of the Servicer............................................141

   SECTION 7.05.           Limitation on Resignation of the Master Servicer.....................................142

   SECTION 7.06.           Assignment of Master Servicing.......................................................143

   SECTION 7.07.           Rights of the Depositor in Respect of the Servicer and the Master Servicer...........143

   SECTION 7.08.           Duties of the Credit Risk Manager....................................................144

   SECTION 7.09.           Limitation Upon Liability of the Credit Risk Manager.................................144

   SECTION 7.10.           Removal of the Credit Risk Manager...................................................145

      ARTICLE VIII DEFAULT......................................................................................146

   SECTION 8.01.           Servicer Events of Default...........................................................146

   SECTION 8.02.           Master Servicer to Act; Appointment of Successor.....................................149
</TABLE>

                                      xiii
<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
   SECTION 8.03.           Notification to Certificateholders...................................................151

   SECTION 8.04.           Waiver of Servicer Events of Default.................................................152

      ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR........................................153

   SECTION 9.01.           Duties of Trustee and Securities Administrator.......................................153

   SECTION 9.02.           Certain Matters Affecting Trustee and Securities Administrator.......................154

   SECTION 9.03.           Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans...156

   SECTION 9.04.           Trustee and Securities Administrator May Own Certificates............................156

   SECTION 9.05.           Fees and Expenses of Trustee and Securities Administrator............................156

   SECTION 9.06.           Eligibility Requirements for Trustee and Securities Administrator....................157

   SECTION 9.07.           Resignation and Removal of Trustee and Securities Administrator......................158

   SECTION 9.08.           Successor Trustee or Securities Administrator........................................159

   SECTION 9.09.           Merger or Consolidation of Trustee or Securities Administrator.......................159

   SECTION 9.10.           Appointment of Co-Trustee or Separate Trustee........................................160

   SECTION 9.11.           Appointment of Office or Agency......................................................160

   SECTION 9.12.           Representations and Warranties.......................................................161

      ARTICLE X TERMINATION.....................................................................................162

   SECTION 10.01.          Termination Upon Repurchase or Liquidation of All Mortgage Loans.....................162

   SECTION 10.02.          Additional Termination Requirements..................................................164

      ARTICLE XI REMIC PROVISIONS...............................................................................166

   SECTION 11.01.          REMIC Administration.................................................................166

   SECTION 11.02.          Prohibited Transactions and Activities...............................................168

   SECTION 11.03.          Indemnification......................................................................169

      ARTICLE XII MISCELLANEOUS PROVISIONS......................................................................170

   SECTION 12.01.          Amendment............................................................................170

   SECTION 12.02.          Recordation of Agreement; Counterparts...............................................171

   SECTION 12.03.          Limitation on Rights of Certificateholders...........................................171

   SECTION 12.04.          Governing Law........................................................................172

   SECTION 12.05.          Notices..............................................................................172

   SECTION 12.06.          Severability of Provisions...........................................................173

   SECTION 12.07.          Notice to Rating Agencies............................................................173

   SECTION 12.08.          Article and Section References.......................................................174

   SECTION 12.09.          Grant of Security Interest...........................................................174
</TABLE>

                                                        xiv

<PAGE>

<TABLE>
<CAPTION>

<S>   <C>
   SECTION 12.10.          Survival of Indemnification..........................................................175

Exhibits
--------

Exhibit A-1       Form of Class A Certificate
Exhibit A-2       Form of Class M Certificate
Exhibit A-3       Form of Class B Certificate
Exhibit A-4       Form of Class CE Certificate
Exhibit A-5       Form of Class P Certificate
Exhibit A-6       Form of Class R Certificate
Exhibit B-1       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of the Class B Certificates, Class P Certificates, Class CE
                  Certificates and Residual Certificates Pursuant to Rule 144A
                  Under the 1933 Act
Exhibit B-2       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of the Class B Certificates, Class P Certificates, Class CE
                  Certificates and Residual Certificates Pursuant to Rule 501
                  (a) Under the 1933 Act
Exhibit B-3       Form of Transfer Affidavit and Agreement and Form of
                  Transferor Affidavit in Connection with Transfer of Residual
                  Certificates
Exhibit C         Form of Servicer Certification
Exhibit D         Form of Power of Attorney
Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule
Schedule 3        Reserved.
Schedule 4        Standard File Layout - Delinquency Reporting
Schedule 5        Standard File Layout - Scheduled/Scheduled
</TABLE>

                                       xv

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of September 1, 2004, among ACE SECURITIES CORP., as Depositor, OCWEN FEDERAL
BANK FSB, as Servicer, WELLS FARGO BANK, N.A., as Master Servicer and Securities
Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest of the Trust Fund created hereunder. The
Trust Fund will consist of a segregated pool of assets comprised of the Mortgage
Loans and certain other related assets subject to this Agreement.

                                     REMIC I
                                     -------

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

<PAGE>

<TABLE>
<CAPTION>

                                         REMIC I
                                       REMITTANCE                    INITIAL                  LATEST POSSIBLE
         DESIGNATION                      RATE                UNCERTIFICATED BALANCE         MATURITY DATE (1)
         -----------                      ----                ----------------------         -----------------
<S>                                    <C>                        <C>                        <C>
I-LTAA                                 Variable(2)                $264,600,008.10            October 25, 2034
I-LTA1                                 Variable(2)                  $1,410,770.00            October 25, 2034
I-LTA2A                                Variable(2)                    $488,480.00            October 25, 2034
I-LTA2B                                Variable(2)                    $120,000.00            October 25, 2034
I-LTA2C                                Variable(2)                     $80,000.00            October 25, 2034
I-LTM1                                 Variable(2)                    $186,300.00            October 25, 2034
I-LTM2                                 Variable(2)                    $148,500.00            October 25, 2034
I-LTM3                                 Variable(2)                     $40,500.00            October 25, 2034
I-LTM4                                 Variable(2)                     $40,500.00            October 25, 2034
I-LTM5                                 Variable(2)                     $33,750.00            October 25, 2034
I-LTM6                                 Variable(2)                     $27,000.00            October 25, 2034
I-LTB1                                 Variable(2)                     $47,250.00            October 25, 2034
I-LTB2                                 Variable(2)                     $40,500.00            October 25, 2034
I-LTZZ                                 Variable(2)                  $2,736,450.17            October 25, 2034
I-LTP                                  Variable(2)                        $100.00            October 25, 2034
I-LT1A                                 Variable(2)                      $8,074.54            October 25, 2034
I-LT1B                                 Variable(2)                     $36,289.95            October 25, 2034
I-LT2A                                 Variable(2)                      $3,940.46            October 25, 2034
I-LT2B                                 Variable(2)                     $17,710.06            October 25, 2034
I-LTXX                                 Variable(2)                $269,933,993.26            October 25, 2034
</TABLE>
---------------------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each REMIC I
         Regular Interest.
(2)      Calculated in accordance with the definition of "REMIC I Remittance
         Rate" herein.

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial aggregate Certificate Principal Balance and, solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated Classes of Certificates.

                                       2
<PAGE>

<TABLE>
<CAPTION>

                                                                  INITIAL AGGREGATE
                                                                CERTIFICATE PRINCIPAL           LATEST POSSIBLE
         DESIGNATION                 PASS-THROUGH RATE                 BALANCE                 MATURITY DATE (1)
         -----------                 -----------------                 -------                 -----------------
<S>                                     <C>                        <C>                         <C>
Class A-1                               Variable(2)                $282,154,000.00             October 25, 2034
Class A-2A                              Variable(2)                 $97,696,000.00             October 25, 2034
Class A-2B                              Variable(2)                 $24,000,000.00             October 25, 2034
Class A-2C                              Variable(2)                 $16,000,000.00             October 25, 2034
Class M-1                               Variable(2)                 $37,260,000.00             October 25, 2034
Class M-2                               Variable(2)                 $29,700,000.00             October 25, 2034
Class M-3                               Variable(2)                  $8,100,000.00             October 25, 2034
Class M-4                               Variable(2)                  $8,100,000.00             October 25, 2034
Class M-5                               Variable(2)                  $6,750,000.00             October 25, 2034
Class M-6                               Variable(2)                  $5,400,000.00             October 25, 2034
Class B-1                               Variable(2)                  $9,450,000.00             October 25, 2034
Class B-2                               Variable(2)                  $8,100,000.00             October 25, 2034
Class P                                   N/A(3)                           $100.00             October 25, 2034
Class CE                                  N/A(4)                     $7,290,017.00             October 25, 2034
</TABLE>
-----------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class P Certificates will not accrue interest.
(4)      The Class CE Certificates will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class CE Certificates
         outstanding from time to time which shall equal the Uncertificated
         Balance of the REMIC I Regular Interests (other than REMIC I Regular
         Interest I-LTP). The Class CE Certificates will not accrue interest on
         their Certificate Principal Balance.

                  As of the Cut-off Date, the Group I Mortgage Loans had an
aggregate Scheduled Principal Balance equal to approximately $362,899,536 and
the Group II Mortgage Loans had an aggregate Scheduled Principal Balance equal
to approximately $177,100,580.

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

                                       3
<PAGE>

                                   ARTICLE I
                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

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

                  "Accepted Master Servicing Practices": With respect to any
Mortgage Loan, as applicable, either (x) those customary mortgage master
servicing practices of prudent mortgage servicing institutions that master
service mortgage loans of the same type and quality as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, to the extent
applicable to the Master Servicer (except in its capacity as successor to the
Servicer), or (y) as provided in Section 3.01 hereof, but in no event below the
standard set forth in clause (x).

                  "Accepted Servicing Practices": As defined in Section 3.01.

                  "Account": The Collection Account and the Distribution Account
as the context may require.

                  "Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class CE Certificate
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, or on the Notional
Amount in the case of the Class CE Certificates, of such Certificate immediately
prior to such Distribution Date. The Class P Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
All distributions of interest on the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates will be calculated on the basis of a
360-day year and the actual number of days in the applicable Interest Accrual
Period. All distributions of interest on the Class CE Certificates will be based
on a 360-day year consisting of twelve 30-day months. Accrued Certificate
Interest with respect to each Distribution Date, as to any Class A Certificate,
Mezzanine Certificate, Class B Certificate or Class CE Certificate shall be
reduced by an amount equal to the portion allocable to such Certificate pursuant
to Section 1.02 hereof, if any, of the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such Distribution Date to the extent not covered
by payments pursuant to Section 3.22 or Section 4.18 of this Agreement and (b)
the aggregate amount of any Relief Act Interest Shortfall, if any, for such
Distribution Date. In addition, Accrued Certificate Interest with respect to
each Distribution Date, as to any Class CE Certificate, shall be reduced by an
amount equal to the portion allocable to such Class CE Certificate of Realized
Losses, if any, pursuant to Section 1.02 and Section 5.04 hereof.

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

                                       4
<PAGE>

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

                  "Administration Fees": The sum of (i) the Servicing Fee, (ii)
the Master Servicing Fee and (iii) the Credit Risk Management Fee.

                  "Administration Fee Rate": The sum of (i) the Servicing Fee
Rate , (ii) the Master Servicer Fee Rate and (iii) the Credit Risk Management
Fee Rate.

                  "Advance Facility": As defined in Section 3.25(a).

                  "Advance Financing Person": As defined in Section 3.25(a).

                  "Advance Reimbursement Amounts": As defined in Section
3.25(b).

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

                  "Aggregate Loss Severity Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred on any Mortgage Loans
from the Cut-off Date to the last day of the preceding calendar month and the
denominator of which is the aggregate principal balance of such Mortgage Loans
immediately prior to the liquidation of such Mortgage Loans.

                  "Agreement": This Pooling and Servicing Agreement, including
all exhibits and schedules hereto and all amendments hereof and supplements
hereto.

                  "Allocated Realized Loss Amount": With respect to any Class of
Mezzanine Certificates or Class B Certificates and any Distribution Date, an
amount equal to the sum of any Realized Loss allocated to that Class of
Certificates on the Distribution Date and any Allocated Realized Loss Amount for
that Class remaining unpaid from the previous Distribution Date.

                  "Amounts Held for Future Distribution": As to any Distribution
Date, the aggregate amount held in the Collection Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Monthly Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Period and (ii) Principal Prepayments and Liquidation
Proceeds received in respect of such Mortgage Loans after the last day of the
related Prepayment Period.

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more

                                       5
<PAGE>

blanket assignments covering Mortgages secured by Mortgaged Properties located
in the same county, if permitted by law.

                  "Authorized Officers": A managing director of the whole loan
trading desk and a managing director in global markets.

                  "Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Servicer Remittance Date, (b) the aggregate of
any amounts deposited in the Distribution Account by the Servicer or the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date
pursuant to Section 3.22 or Section 4.18 of this Agreement, (c) the aggregate of
any P&I Advances for such Distribution Date made by the Servicer pursuant to
Section 5.03 of this Agreement and (d) the aggregate of any P&I Advances made by
a successor Servicer (including the Master Servicer) for such Distribution Date
pursuant to Section 8.02, reduced (to not less than zero) by (2) the portion of
the amount described in clause (1)(a) above that represents (i) Amounts Held for
Future Distribution, (ii) Principal Prepayments on the Mortgage Loans received
after the related Prepayment Period (together with any interest payments
received with such Principal Prepayments to the extent they represent the
payment of interest accrued on the Mortgage Loans during a period subsequent to
the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Servicer, the
Trustee, the Master Servicer, the Securities Administrator or the Custodian
pursuant to Section 3.09 or 9.05 of this Agreement or otherwise payable in
respect of Extraordinary Trust Fund Expenses, (v) the Credit Risk Management
Fee, (vi) amounts deposited in the Collection Account or the Distribution
Account in error, (vii) the amount of any Prepayment Charges collected by the
Servicer in connection with the Principal Prepayment of any of the Mortgage
Loans and (viii) amounts reimbursable to a successor Servicer (including the
Master Servicer) pursuant to Section 8.02.

                  "Avoided Payment": As such term is defined in the Certificate
Insurance Policy.

                  "Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment, that is substantially greater than the preceding monthly payment at the
maturity of such Mortgage Loan.

                  "Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment, that is substantially greater
than the preceding Monthly Payment at the maturity of such Mortgage Loan.

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

                  "Book-Entry Certificates": The Offered Certificates for so
long as the Certificates of such Class shall be registered in the name of the
Depository or its nominee.

                  "Book-Entry Custodian": The custodian appointed pursuant to
Section 6.01.

                                       6
<PAGE>

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

                  "Cap Contracts": Shall mean (i) the Cap Contract between the
Trustee and the counterparty named thereunder, for the benefit of the Holders of
the Class A-1 Certificates, the Mezzanine Certificates and the Class B
Certificates (the "Group I Cap Contract") and (ii) the Cap Contract between the
Trustee and the counterparty thereunder, for the benefit of the Class A-2
Certificates, the Mezzanine Certificates and the Class B Certificates (the
"Group II Cap Contract").

                  "Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal amount in excess of the principal
balance of any existing first mortgage plus any subordinate mortgage on the
related Mortgaged Property and related closing costs.

                  "Certificate": Any one of ACE Securities Corp., Asset Backed
Pass-Through Certificates, Series 2004-HE2, Class A-1, Class A-2A, Class A-2B,
Class A-2C, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2, Class P, Class CE and Class R issued under this Agreement.

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

                  "Certificate Insurance Policy": The Financial Guaranty
Insurance Policy No. CA01177A, and all endorsements thereto dated the Closing
Date, issued by the Certificate Insurer for the benefit of the Class A-1
Certificateholders.

                  "Certificate Insurer": XL Capital Assurance Inc., a New York
monoline insurance corporation or its successors in interest.

                  "Certificate Insurer Default": The occurrence and continuance
of any of the following:

                  (a) the Certificate Insurer shall have failed to make a
required payment when due under the Certificate Insurance Policy in accordance
with its terms;

                  (b) the Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the United
States Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization, (ii) made a general assignment for the

                                       7
<PAGE>

benefit of its creditors or (iii) had an order for relief entered against it
under the United States Bankruptcy Code, the New York State Insurance Law or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization that is final and nonappealable;
or

                  (c) a court of competent jurisdiction, the New York Department
of Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a custodian,
trustee, agent, or receiver for the Certificate Insurer or for all or any
material portion of its property or (ii) authorizing the taking of possession by
a custodian, trustee, agent, or receiver of the Certificate Insurer (or the
taking of possession of all or any material portion of property of the
Certificate Insurer).

                  "Certificate Margin": With respect to the Class A-1
Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1 0.32% in the case of each Distribution Date through and
including the Optional Termination Date and 0.64% in the case of each
Distribution Date thereafter.

                  With respect to the Class A-2A Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2A 0.38% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.76% in the case of each Distribution Date thereafter.

                  With respect to the Class A-2B Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2B 0.21% in
the case of each Distribution Date through and including the Optional
Termination Date and 0.42% in the case of each Distribution Date thereafter.

                  With respect to the Class A-2C Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2C 0.55% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.10% in the case of each Distribution Date thereafter.

                  With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM1, 0.69% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.035% in the case of each Distribution Date thereafter.

                  With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, 1.20% in
the case of each Distribution Date through and including the Optional
Termination Date and 1.80% in the case of each Distribution Date thereafter.

                  With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM3, 1.40% in
the case of each Distribution Date

                                       8
<PAGE>

through and including the Optional Termination Date and 2.10% in the case of
each Distribution Date thereafter.

                  With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM4, 1.85% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.775% in the case of each Distribution Date thereafter.

                  With respect to the Class M-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM5, 1.950% in
the case of each Distribution Date through and including the Optional
Termination Date and 2.925% in the case of each Distribution Date thereafter.

                  With respect to the Class M-6 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM6, 3.40% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.10% in the case of each Distribution Date thereafter.

                  With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB1, 3.50% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.25% in the case of each Distribution Date thereafter.

                  With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB2, 3.50% in
the case of each Distribution Date through and including the Optional
Termination Date and 5.25% in the case of each Distribution Date thereafter.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof, and solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of or beneficially owned by the Depositor, the Seller, the Servicer, the
Master Servicer, the Securities Administrator, the Trustee or any Affiliate
thereof shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.01. The Trustee and the
Securities Administrator may conclusively rely upon a certificate of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or the
Servicer in determining whether a Certificate is held by an Affiliate thereof.
All references herein to "Holders" or "Certificateholders" shall reflect the
rights of Certificate Owners as they may indirectly exercise such rights through
the Depository and participating members thereof, except as otherwise specified
herein; provided, however, that the Trustee and the Securities Administrator
shall be required to recognize as a "Holder" or "Certificateholder" only the
Person in whose name a Certificate is registered in the Certificate Register.

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

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class P Certificate
as of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior

                                       9
<PAGE>

to such date of determination plus any Subsequent Recoveries added to the
Certificate Principal Balance of such Certificate pursuant to Section 5.04,
minus all distributions allocable to principal made thereon and Realized Losses
allocated thereto, if any, on such immediately prior Distribution Date (or, in
the case of any date of determination up to and including the first Distribution
Date, the initial Certificate Principal Balance of such Certificate, as stated
on the face thereof). With respect to each Class CE Certificate as of any date
of determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A Certificates, the Mezzanine
Certificates, the Class B Certificates and the Class P Certificates then
outstanding. The aggregate initial Certificate Principal Balance of each Class
of Regular Certificates is set forth in the Preliminary Statement hereto.

                  "Certificate Register": The register maintained pursuant to
Section 6.02.

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

                  "Class A Certificate": Any Class A-1 or Class A-2 Certificate.

                  "Class A Principal Distribution Amount": The Class A Principal
Distribution Amount is an amount equal to the sum of: (i) the Class A-1
Principal Distribution Amount and (ii) the Class A-2 Principal Distribution
Amount.

                  "Class A-1 Allocation Percentage": With respect to any
Distribution Date is the percentage equivalent of a fraction, the numerator of
which is (x) the Group I Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

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

                  "Class A-1 Certificate Deficiency Amount": With respect to any
Distribution Date and the Class A-1 Certificates, an amount equal to the sum of
the following amounts, in each case after giving effect to distributions made on
such date from sources other than the Certificate Insurance Policy:

                           (i) the excess of (x) the Senior Interest
         Distribution Amount for the Class A-1 Certificates for such
         Distribution Date (calculated without regard to any step-up of the
         Pass-Through Rate following the Optional Termination Date) over (y) the
         amount of available funds allocated to pay such Senior Interest
         Distribution Amount pursuant to Section 5.01;

                           (ii) the Class A-1 Principal Loss Amount, if any, for
         such Distribution Date; and

                           (iii) without duplication of the amount specified in
         clause (ii) above, the Certificate Principal Balance of the Class A-1
         Certificates on the Final Maturity Date

                                       10
<PAGE>

         or, if earlier, the date on which the final scheduled distribution is
         made to the Class A-1 Certificateholders pursuant to Article X.

                  "Class A-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A-1 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 55.50% and (ii) the aggregate Stated Principal Balance
of the Group I Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced and
unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Group I Mortgage Loans as of the Cut-off Date.

                  "Class A-1 Principal Loss Amount": means, as to any
Distribution Date, the amount by which (i) the aggregate Certificate Principal
Balance of the Class A-1 Certificates, after taking into account distributions
in reduction of such aggregate Certificate Principal Balance from sources other
than the Certificate Insurance Policy on such Distribution Date, exceeds (ii)
the aggregate principal balance of the Group I Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period).

                  "Class A-2 Allocation Percentage": With respect to any
Distribution Date is the percentage equivalent of a fraction, the numerator of
which is (x) the Group II Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

                  "Class A-2 Certificate": Any Class A-2A, Class A-2B or Class
A-2C Certificate.

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

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

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

                                       11
<PAGE>

                  "Class A-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-2A, Class A-2B and Class A-2C Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 55.50% and
(ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group
II Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) minus the product of (i) 0.50%
and (ii) the aggregate principal balance of the Group II Mortgage Loans as of
the Cut-off Date.

                  "Class B Certificate": Any Class B-1 Certificate or Class B-2
Certificate.

                  "Class B Principal Distribution Amount": The Class B Principal
Distribution Amount is an amount equal to the sum of: (i) the Class B-1
Principal Distribution Amount and (ii) the Class B-2 Principal Distribution
Amount.

                  "Class B-1 Certificate": Any one of the Class B-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-3 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

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

                  "Class B-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal Balance of the Class B-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 94.30% and (ii) the aggregate Stated Principal Balance of

                                       12
<PAGE>

the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class B-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class B-1 Certificates
(after taking into account the payment of the Class B-1 Principal Distribution
Amount on such Distribution Date) and (ix) the Certificate Principal Balance of
the Class B-2 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 97.30% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

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

                  "Class M Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and Class M-6 Certificates.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the

                                       13
<PAGE>

form annexed hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 69.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

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

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 80.30% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

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

                                       14
<PAGE>

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 83.30% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 86.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                                       15
<PAGE>

                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (vi) the Certificate Principal Balance of
the Class M-5 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 88.80% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

                  "Class M-6 Certificate": Any one of the Class M-6 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

                  "Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such

                                       16
<PAGE>

Distribution Date) and (vii) the Certificate Principal Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 90.80% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

                  "Class P Certificate": Any one of the Class P Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-5 and evidencing
a Regular Interest in REMIC II for purposes of the REMIC Provisions.

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

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

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

                  "Closing Date": September 20, 2004.

                  "Code": The Internal Revenue Code of 1986 as amended from time
to time.

                  "Collection Account": The account or accounts created and
maintained, or caused to be created and maintained, by the Servicer pursuant to
Section 3.08(a), which shall be entitled "Ocwen Federal Bank FSB, as Servicer
for HSBC Bank USA, National Association as Trustee, in trust for the registered
holders of ACE Securities Corp., Home Equity Loan Trust, Series 2004-HE2, Asset
Backed Pass-Through Certificates". The Collection Account must be an Eligible
Account.

                  "Commission": The Securities and Exchange Commission.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee which office at the date of the execution of this instrument is
located at 452 Fifth Avenue, New York, New York 10018, Attention: ACE Securities
Corp., 2004-HE2, or at such other address as the Trustee may designate from time
to time by notice to the Certificateholders, the Depositor, the Master Servicer,
the Securities Administrator and the Servicer. The office of the Securities
Administrator, which for purposes of Certificate transfers and surrender is
located at Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust (ACE 2004-HE2), and for
all other purposes is located at Wells Fargo Bank, N.A., P.O. Box 98, Columbia,
Maryland 21046, Attention: Corporate Trust (ACE 2004-HE2) (or

                                       17
<PAGE>

for overnight deliveries, at 9062 Old Annapolis Road, Columbia, Maryland 21045,
Attention: Corporate Trust (ACE 2004-HE2)).

                  "Corresponding Certificate": With respect to each REMIC I
Regular Interest, as follows:

                        REMIC I Regular Interest           Class
                        ------------------------           -----
                 REMIC I Regular Interest I-LTA1            A-1
                 REMIC I Regular Interest I-LTA2A          A-2A
                 REMIC I Regular Interest I-LTA2B          A-2B
                 REMIC I Regular Interest I-LTA2C          A-2C
                 REMIC I Regular Interest I-LTM1            M-1
                 REMIC I Regular Interest I-LTM2            M-2
                 REMIC I Regular Interest I-LTM3            M-3
                 REMIC I Regular Interest I-LTM4            M-4
                 REMIC I Regular Interest I-LTM5            M-5
                 REMIC I Regular Interest I-LTM6            M-6
                 REMIC I Regular Interest I-LTB1            B-1
                 REMIC I Regular Interest I-LTB2            B-2
                 REMIC I Regular Interest I-LTP              P

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates, the
Class B Certificates and the Class CE Certificates, and the denominator of which
is the aggregate Stated Principal Balance of the Mortgage Loans, calculated
after taking into account distributions of principal on the Mortgage Loans and
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date.

                  "Credit Risk Management Agreements": The agreements between
the Credit Risk Manager and the Servicer and/or Master Servicer, regarding the
loss mitigation and advisory services to be provided by the Credit Risk Manager.

                  "Credit Risk Management Fee": The amount payable to the Credit
Risk Manager on each Distribution Date as compensation for all services rendered
by it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under the Credit Risk Management Agreements, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the Stated Principal Balance of the Mortgage Loans and
any related REO Properties as of the first day of the related Due Period.

                  "Credit Risk Management Fee Rate": 0.015% per annum.

                  "Credit Risk Manager": The Murrayhill Company, a Colorado
corporation, and its successors and assigns.

                  "Custodial Agreement": The Custodial Agreement dated as of
September 1, 2004, among the Trustee, the Custodian and the Servicer as such
agreement may be amended or supplemented from time to time, or any other
custodial agreement entered into after the date hereof with respect to any
Mortgage Loan subject to this Agreement.

                  "Custodian": Wells Fargo or any other custodian appointed
under any custodial agreement entered into after the date of this Agreement.

                                       18
<PAGE>

                  "Cut-off Date": With respect to each Mortgage Loan, September
1, 2004. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

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

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

                  "Definitive Certificates": As defined in Section 6.01(b).

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

                  "Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month.

                  "Depositor": ACE Securities Corp., a Delaware corporation, or
its successor in interest.

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

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least A-1+ by S&P, F-1+
by Fitch and P-1 by Moody's (or, if such Rating Agencies are no longer rating
the Offered Certificates, comparable ratings by any other nationally recognized
statistical rating agency then rating the Offered Certificates).

                                       19
<PAGE>

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

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

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Servicer, on
behalf of the Trustee, shall not be considered to Directly Operate an REO
Property solely because the Servicer establishes rental terms, chooses tenants,
enters into or renews leases, deals with taxes and insurance, or makes decisions
as to repairs or capital expenditures with respect to such REO Property.

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Securities Administrator pursuant to Section 3.08(b) in
the name of the Securities Administrator for the benefit of the
Certificateholders and designated "Wells Fargo Bank, N.A., in trust for
registered holders of ACE Securities Corp. Home Equity Loan Trust, Series
2004-HE2". Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement. The
Distribution Account must be an Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in October 2004.

                                       20
<PAGE>

                  "Due Date": With respect to each Distribution Date, the day of
the month on which the Monthly Payment is due on a Mortgage Loan during the
related Due Period, exclusive of any days of grace.

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

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with a federal depository institution or state chartered
depository institution acting in its fiduciary capacity. Eligible Accounts may
bear interest.

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

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

                  "Excess Liquidation Proceeds": To the extent that such amount
is not required by law to be paid to the related mortgagor, the amount, if any,
by which Liquidation Proceeds with respect to a liquidated Mortgage Loan exceed
the sum of (i) the outstanding principal balance of such Mortgage Loan and
accrued but unpaid interest at the related Net Mortgage Rate through the last
day of the month in which the related Liquidation Event occurs, plus (ii)
related liquidation expenses or other amounts to which the Servicer is entitled
to be reimbursed from Liquidation Proceeds with respect to such liquidated
Mortgage Loan pursuant to Section 3.09 of this Agreement.

                  "Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan or REO Property, the then applicable Mortgage Rate thereon minus the
Administration Fee Rate.

                  "Extraordinary Trust Fund Expense": Any amounts payable or
reimbursable to the Trustee, the Master Servicer, the Securities Administrator,
the Custodian or any director, officer, employee or agent of any such Person
from the Trust Fund pursuant to the terms of this Agreement and any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
11.01(g)(v).

                  "Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (i) the Net Monthly Excess Cashflow for such
Distribution Date and (ii) the Overcollateralization Increase Amount for such
Distribution Date.

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

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

                  "Final Maturity Date": The Distribution Date occurring in
October 2034.

                                       21
<PAGE>

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by an Originator, the Seller or the Terminator pursuant to or as
contemplated by Section 2.03, 3.13(c) or Section 10.01), a determination made by
the Servicer that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered, which determination shall be evidenced by a certificate of a
Servicing Officer delivered to the Master Servicer and maintained in its
records.

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

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

                  "Group I Interest Remittance Amount": With respect to any
Distribution Date is that portion of the Available Distribution Amount for such
Distribution Date that represents interest received or advanced on the Group I
Mortgage Loans (net of the Administration Fees and any Prepayment Charges and
after taking into account amounts payable or reimbursable to the Trustee, the
Custodian, the Securities Administrator, the Master Servicer or the Servicer
pursuant to this Agreement or the Custodial Agreement).

                  "Group I Mortgage Loans": Those Mortgage Loans identified on
the Mortgage Loan Schedule as Group I Mortgage Loans.

                  "Group I Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group I Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group I Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments
in full and in part, received during the related Prepayment Period, to the
extent applied as recoveries of principal on the Group I Mortgage Loans, net in
each case of payments or reimbursements to the Trustee, the Custodian, the
Master Servicer, the Securities Administrator and the Servicer and (iv) the
Class A-1 Allocation Percentage of the amount of any Overcollateralization
Increase Amount for such Distribution Date MINUS (v) the Class A-1 Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Distribution Date.

                  "Group I Principal Remittance Amount": With respect to any
Distribution Date will be the sum of the amounts described in clauses (i)
through (iii) of the definition of Group I Principal Distribution Amount.

                  "Group II Interest Remittance Amount": With respect to any
Distribution Date is that portion of the Available Distribution Amount for such
Distribution Date that represents

                                       22
<PAGE>

interest received or advanced on the Group II Mortgage Loans (net of the
Administration Fees and any Prepayment Charges and after taking into account
amounts payable or reimbursable to the Trustee, the Custodian, the Securities
Administrator, the Master Servicer or the Servicer pursuant to this Agreement or
the Custodial Agreement).

                  "Group II Mortgage Loans": Those Mortgage Loans identified on
the Mortgage Loan Schedule as Group II Mortgage Loans.

                  "Group II Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group II Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group II Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments
in full and in part, received during the related Prepayment Period, to the
extent applied as recoveries of principal on the Group II Mortgage Loans, net in
each case of payments or reimbursements to the Trustee, the Custodian, the
Master Servicer, the Securities Administrator and the Servicer and (iv) the
Class A-2 Allocation Percentage of the amount of any Overcollateralization
Increase Amount for such Distribution Date MINUS (v) the Class A-2 Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Distribution Date.

                  "Group II Principal Remittance Amount": With respect to any
Distribution Date will be the sum of the amounts described in clauses (i)
through (iii) of the definition of Group II Principal Distribution Amount.

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

                  "Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to REMIC I
within the meaning of Section 856(d)(3) of the Code if REMIC I were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and

                                       23
<PAGE>

REMIC I is at arm's length, all within the meaning of Treasury Regulation
Section 1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the
Trustee has received an Opinion of Counsel to the effect that the taking of any
action in respect of any REO Property by such Person, subject to any conditions
therein specified, that is otherwise herein contemplated to be taken by an
Independent Contractor will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.

                  "Index": As of any Adjustment Date, the index applicable to
the determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan
will generally be the average of the interbank offered rates for six-month
United States dollar deposits in the London market as published in THE WALL
STREET JOURNAL and as most recently available either (a) as of the first
Business Day 45 days prior to such Adjustment Date or (b) as of the first
Business Day of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note.

                  "Insolvency Proceeding": As defined in Certificate Insurance
Policy.

                  "Institutional Accredited Investor": As defined in Section
6.01(c).

                  "Insurance Agreement": The Insurance and Indemnity Agreement,
dated as of the Closing Date, among the Certificate Insurer, the Servicer, the
Seller, the Depositor and Deutsche Bank Securities Inc.

                  "Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy, covering a Mortgage Loan or the related
Mortgaged Property, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor or a
senior lienholder in accordance with Accepted Servicing Practices, subject to
the terms and conditions of the related Mortgage Note and Mortgage.

                  "Insured Certificates": The Class A-1 Certificates.

                  "Insured Payments": Any payments made by the Certificate
Insurer pursuant to the Certificate Insurance Policy.

                  "Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates, the Mezzanine Certificate and the Class B
Certificates, the period commencing on the Distribution Date of the month
immediately preceding the month in which such Distribution Date occurs (or, in
the case of the first Distribution Date, commencing on the Closing Date) and
ending on the day preceding such Distribution Date. With respect to any
Distribution Date and the Class CE Certificates and the REMIC I Regular
Interests, the one-month period ending on the last day of the calendar month
immediately preceding the month in which such Distribution Date occurs.

                  "Interest Carry Forward Amount": With respect to any
Distribution Date and any Class A Certificate, Mezzanine Certificate or Class B
Certificate, the sum of (i) the amount, if any, by which (a) the Interest
Distribution Amount for such Class as of the immediately preceding Distribution
Date exceeded (b) the actual amount distributed on such Class in respect

                                       24
<PAGE>

of interest on such immediately preceding Distribution Date and (ii) the amount
of any Interest Carry Forward Amount for such Class remaining unpaid from the
previous Distribution Date, plus accrued interest on such sum calculated at the
related Pass-Through Rate for the most recently ended Interest Accrual Period.

                  "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates, REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest
I-LTB2, and any Interest Accrual Period therefor, the second London Business Day
preceding the commencement of such Interest Accrual Period.

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

                  "Interest Remittance Amount": With respect to any Distribution
Date, the sum of: (i) the Group I Interest Remittance Amount and (ii) the Group
II Interest Remittance Amount.

                  "Last Scheduled Distribution Date": October 25, 2034.

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

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.13(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 10.01.

                  "Liquidation Proceeds": The amount (other than Insurance
Proceeds, amounts received in respect of the rental of any REO Property prior to
REO Disposition, or required to be released to a Mortgagor or a senior
lienholder in accordance with applicable law or the terms of the related
Mortgage Loan Documents) received by the Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation (other than amounts required to be released to
the Mortgagor or a senior lienholder), (ii) the liquidation of a defaulted
Mortgage Loan through a trustee's sale, foreclosure sale or otherwise, (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO

                                       25
<PAGE>

Property pursuant to or as contemplated by Section 2.03, Section 3.13(c),
Section 3.21 or Section 10.01 of this Agreement or (iv) any Subsequent
Recoveries.

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

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

                  "Loss Severity Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
amount of Realized Losses incurred on a Mortgage Loan and the denominator of
which is the principal balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.

                  "Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC I Remittance Rate for each of REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B,
REMIC I Regular Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, and
REMIC I Regular Interest I-LTZZ, with the rate on each such REMIC I Regular
Interest (other than REMIC I Regular Interest I-LTZZ) subject to a cap equal to
the lesser of (i) the related One-Month LIBOR Pass-Through Rate and (ii) the
related Net WAC Pass-Through Rate for the corresponding Certificate for the
purpose of this calculation for such Distribution Date and with the rate on
REMIC I Regular Interest I-LTZZ subject to a cap of zero for the purpose of this
calculation; provided however, each such cap for each REMIC I Regular Interest
shall be multiplied by a fraction the numerator of which is the actual number of
days in the related Interest Accrual Period and the denominator of which is 30.

                  "Master Servicer": As of the Closing Date, Wells Fargo Bank,
N.A. and thereafter, its respective successors in interest who meet the
qualifications of this Agreement. The Master Servicer and the Securities
Administrator shall at all times be the same Person.

                  "Master Servicer Certification": A written certification
covering servicing of the Mortgage Loans by a Servicer and signed by an officer
of the Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superseded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed

                                       26
<PAGE>

to by the Master Servicer, the Depositor and the Seller following a negotiation
in good faith to determine how to comply with any such new requirements.

                  "Master Servicer Event of Default": One or more of the events
described in Section 8.01(b).

                  "Master Servicer Fee Rate": 0.0125% per annum.

                  "Master Servicing Fee": With respect to each Mortgage Loan and
for any calendar month, an amount equal to one twelfth of the product of the
Master Servicer Fee Rate multiplied by the Scheduled Principal Balance of the
Mortgage Loans as of the Due Date in the preceding calendar month.

                  "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTB1 and REMIC I Regular Interest
I-LTB2, for such Distribution Date, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate for the
corresponding Certificate for the purpose of this calculation for such
Distribution Date; provided however, each such cap for each REMIC I Regular
Interest shall be multiplied by a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is 30.

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

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

                  "MERS(R) System": The system of recording transfers of
mortgages electronically maintained by MERS.

                  "Mezzanine Certificate": Any Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 or Class M-6 Certificate.

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

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

                                       27
<PAGE>

                  "MOM Loan": With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns, at the origination thereof.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01 of this Agreement;
and (c) on the assumption that all other amounts, if any, due under such
Mortgage Loan are paid when due.

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

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

                  "Mortgage File": The Mortgage Loan Documents pertaining to a
particular Mortgage Loan.

                  "Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and the Mortgage Loan Documents for which have been delivered to
the Custodian pursuant to Section 2.01 of this Agreement and pursuant to the
Custodial Agreement, as held from time to time as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.

                  "Mortgage Loan Documents": The documents evidencing or
relating to each Mortgage Loan delivered to the Custodian under the Custodial
Agreement on behalf of the Trustee.

                  "Mortgage Loan Purchase Agreement": Shall mean the Mortgage
Loan Purchase Agreement dated as of September 20, 2004, between the Depositor
and the Seller.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Schedule 1.
The Depositor shall deliver or cause the delivery of the initial Mortgage Loan
Schedule to the Servicer, the Master Servicer, the Custodian and the Trustee on
the Closing Date. The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:

                  (i) the Mortgage Loan identifying number;

                  (ii) the Mortgagor's first and last name;

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

                                       28
<PAGE>

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

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

                  (vi) the original months to maturity;

                  (vii) the original date of the Mortgage Loan and the remaining
         months to maturity from the Cut-off Date, based on the original
         amortization schedule;

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

                  (ix) the Mortgage Rate in effect immediately following the
         Cut-off Date;

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

                  (xi) the stated maturity date;

                  (xii) the amount of the Monthly Payment at origination;

                  (xiii) the amount of the Monthly Payment as of the Cut-off
         Date;

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

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

                  (xvi) the Stated Principal Balance of the Mortgage Loan as of
         the close of business on the Cut-off Date;

                  (xvii) with respect to each Adjustable Rate Mortgage Loan, the
         first Adjustment Date;

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

                  (xix) a code indicating the purpose of the loan (i.e.,
         purchase financing, rate/term refinancing, cash-out refinancing);

                  (xx) with respect to each Adjustable Rate Mortgage Loan, the
         Maximum Mortgage Rate under the terms of the Mortgage Note;

                  (xxi) with respect to each Adjustable Rate Mortgage Loan, the
         Minimum Mortgage Rate under the terms of the Mortgage Note;

                  (xxii) the Mortgage Rate at origination;

                                       29
<PAGE>

                  (xxiii) with respect to each Adjustable Rate Mortgage Loan,
         the Periodic Rate Cap;

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

                  (xxv) with respect to each Adjustable Rate Mortgage Loan, the
         Index;

                  (xxvi) the date on which the first Monthly Payment was due on
         the Mortgage Loan and, if such date is not consistent with the Due Date
         currently in effect, such Due Date;

                  (xxvii) a code indicating whether the Mortgage Loan is an
         Adjustable Rate Mortgage Loan or a fixed rate Mortgage Loan;

                  (xxviii) a code indicating the documentation style (i.e.,
         full, stated or limited);

                  (xxix) a code indicating if the Mortgage Loan is subject to a
         primary insurance policy or lender paid mortgage insurance policy and
         the name of the insurer;

                  (xxx) the Appraised Value of the Mortgaged Property;

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

                  (xxxii) a code indicating whether the Mortgage Loan is subject
         to a Prepayment Charge, the term of such Prepayment Charge and the
         amount of such Prepayment Charge;

                  (xxxiii) the product type (e.g., 2/28, 15 year fixed, 30 year
         fixed, 15/30 balloon, etc.);

                  (xxxiv) the Mortgagor's debt to income ratio; and

                  (xxxv) the FICO score at origination.

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

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

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of

                                       30
<PAGE>

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

                  "Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.

                  "Mortgagor": The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the aggregate Senior Interest Distribution Amounts payable to the Holders of
the Class A Certificates, (B) the aggregate Interest Distribution Amounts
payable to the holders of the Mezzanine Certificates and the Class B
Certificates and (C) the Principal Remittance Amount.

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

                  "Net WAC Pass-Through Rate": With respect to the Class A-1
Certificates and any Distribution Date, a rate per annum equal to the product of
(x) the weighted average of the Expense Adjusted Mortgage Rates on the then
outstanding Group I Mortgage Loans, weighted based on their Stated Principal
Balances as of the first day of the calendar month preceding the month in which
the Distribution Date occurs minus, with respect to the Class A-1 Certificates,
a portion of the fee, expressed as a rate, payable to the Certificate Insurer
for providing the Certificate Insurance Policy and (y) a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days elapsed
in the related Interest Accrual Period. For federal income tax purposes, the
economic equivalent of such rate shall be expressed as the weighted average of
(adjusted for the actual number of days elapsed in the related Interest Accrual
Period) the REMIC I Remittance Rate on REMIC I Regular Interest I-LT1B, weighted
on the basis of the Uncertificated Balance of such REMIC I Regular Interest
minus, with respect to the Class A-

                                       31
<PAGE>

1 Certificates, a portion of the fee, expressed as a rate, payable to the
Certificate Insurer for providing the Certificate Insurance Policy.

                  With respect to the Class A-2 Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Group II
Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs and (y) a fraction, the numerator of which is 30 and the denominator
of which is the actual number of days elapsed in the related Interest Accrual
Period. For federal income tax purposes, the economic equivalent of such rate
shall be expressed as the weighted average of (adjusted for the actual number of
days elapsed in the related Interest Accrual Period) the REMIC I Remittance Rate
on REMIC I Regular Interest I-LT2B, weighted on the basis of the Uncertificated
Balance of such REMIC I Regular Interest.

                  With respect to the Mezzanine Certificates and any
Distribution Date, a rate per annum equal to the product of (x) the weighted
average of the Expense Adjusted Mortgage Rates on the then outstanding Mortgage
Loans, weighted based on their Stated Principal Balances as of the first day of
the calendar month preceding the month in which the Distribution Date occurs and
(y) a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I-LT1A, subject to a cap and a floor equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Group I Mortgage
Loans, and (b) REMIC I Regular Interest I-LT2A, subject to a cap and a floor
equal to the weighted average of the Expense Adjusted Mortgage Rates of the
Group II Mortgage Loans, weighted on the basis of the Uncertificated Balance of
each such REMIC I Regular Interest.

                  With respect to the Class B Certificates and any Distribution
Date, a rate per annum equal to the product of (x) the weighted average of the
Expense Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted
based on their Stated Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC I Remittance Rates on
(a) REMIC I Regular Interest I-LT1A, subject to a cap and a floor equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Group I Mortgage
Loans, and (b) REMIC I Regular Interest I-LT2A, subject to a cap and a floor
equal to the weighted average of the Expense Adjusted Mortgage Rates of the
Group II Mortgage Loans, weighted on the basis of the Uncertificated Balance of
each such REMIC I Regular Interest.

                  "Net WAC Rate Carryover Amount" : With respect to any Class A
Certificate, Mezzanine Certificate or Class B Certificate and any Distribution
Date on which the Pass-Through Rate is limited to the applicable Net WAC
Pass-Through Rate, an amount equal to the sum of (i) the excess of (x) the
amount of interest such Class would have been entitled to receive on such
Distribution Date if the applicable Net WAC Pass-Through Rate would not have
been applicable to such Class on such Distribution Date over (y) the amount of
interest paid to such

                                       32
<PAGE>

Class on such Distribution Date at the applicable Net WAC Pass-Through Rate plus
(ii) the related Net WAC Rate Carryover Amount for the previous Distribution
Date not previously distributed to such Class together with interest thereon at
a rate equal to the Pass-Through Rate for such Class for the most recently ended
Interest Accrual Period without taking into account the applicable Net WAC
Pass-Through Rate.

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

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

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

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

                  "Notional Amount" : With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP) for such Distribution
Date.

                  "Offered Certificates" : The Class A Certificates and the
Mezzanine Certificates, collectively.

                  "Officer's Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.

                  "One-Month LIBOR" : With respect to the Class A Certificates,
the Mezzanine Certificates, the Class B Certificates, REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B,
REMIC I Regular Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTB1 and REMIC I Regular Interest I-LTB2 and
any Interest Accrual Period therefor, the rate determined by the Securities
Administrator on the related Interest Determination Date on the basis of the
offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such

                                       33
<PAGE>

Interest Determination Date; provided that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the offered rates of the Reference Banks for one-month U.S. dollar deposits, as
of 11:00 a.m. (London time) on such Interest Determination Date. In such event,
the Securities Administrator will request the principal London office of each of
the Reference Banks to provide a quotation of its rate. If on such Interest
Determination Date, two or more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic
mean of such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Securities Administrator shall select an alternative comparable index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of
One-Month LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculation of the One-Month LIBOR Pass-Through Rates
for the relevant Interest Accrual Period, shall, in the absence of manifest
error, be final and binding.

                  "One-Month LIBOR Pass-Through Rate": With respect to the Class
A-1 Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.

                  With respect to the Class A-2A Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2A, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class A-2B Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2B, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class A-2C Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTA2C, a per
annum rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM1, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM2, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-3 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM3, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-4 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM4, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                                       34
<PAGE>

                  With respect to the Class M-5 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM5, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class M-6 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTM6, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-1 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB1, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  With respect to the Class B-2 Certificates and, for purposes
of the definition of "Marker Rate", REMIC I Regular Interest I-LTB2, a per annum
rate equal to One-Month LIBOR plus the related Certificate Margin.

                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor, the Servicer, the
Securities Administrator or the Master Servicer, acceptable to the Trustee,
except that any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion
of Independent counsel.

                  "Optional Termination Date": The Distribution Date on which
the aggregate principal balance of the Mortgage Loans (and properties acquired
in respect thereof) remaining in the Trust Fund is reduced to less than 10% of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

                  "Originators": Ownit Mortgage Solutions, Inc. f/k/a Oakmont
Mortgage Company Inc., Encore Credit Corp. and various other originators (each,
an "Originator").

                  "Overcollateralization Amount": With respect to any
Distribution Date, the excess, if any, of (a) the aggregate Stated Principal
Balances of the Mortgage Loans and REO Properties immediately following such
Distribution Date over (b) the sum of the aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates, the Class B
Certificates and the Class P Certificates as of such Distribution Date (after
taking into account the payment of the Principal Remittance Amount on such
Distribution Date).

                  "Overcollateralization Increase Amount": With respect to the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates
and any Distribution Date is any amount of Net Monthly Excess Cashflow actually
applied as an accelerated payment of principal to the extent the Required
Overcollateralization Amount exceeds the Overcollateralization Amount.

                  "Overcollateralization Reduction Amount" : With respect to any
Distribution Date, is the lesser of (i) the amount by which the
Overcollateralization Amount exceeds the Required Overcollateralization Amount
and (ii) the Principal Remittance Amount; provided however that on any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Reduction Amount shall equal zero.

                                       35
<PAGE>

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

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Determination Date pursuant to
Section 5.03 of this Agreement, an Advance Financing Person pursuant to Section
3.25 of this Agreement or in respect of any Distribution Date by a successor
Servicer (including the Master Servicer) pursuant to Section 8.02 of this
Agreement (which advances shall not include principal or interest shortfalls due
to bankruptcy proceedings or application of the Relief Act or similar state or
local laws.)

                  "Pass-Through Rate": With respect to the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, and any Distribution
Date, a rate per annum equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate for such Distribution Date and (ii) the related Net WAC
Pass-Through Rate for such Distribution Date.

                  With respect to the Class CE Certificates and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (i)
through (xv) below, and the denominator of which is the aggregate Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I
Regular Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTB and REMIC I Regular Interest I-LTZZ. For purposes of
calculating the Pass-Through Rate for the Class CE Certificates, the numerator
is equal to the sum of the following components:

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

                           (ii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTA1 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTA1;

                           (iii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTA2A minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTA2A;

                           (iv) REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTA2B minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTA2B;

                           (v) REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTA2C minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTA2C;

                                       36
<PAGE>

                           (vi) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM1 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM1;

                           (vii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM2 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM2;

                           (viii) the REMIC I Remittance Rate for REMIC I
         Regular Interest I-LTM3 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Balance of REMIC I Regular Interest I-LTM3;

                           (ix) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM4 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM4;

                           (x) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM5 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM5;

                           (xi) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTM6 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTM6;

                           (xii) the REMIC I Remittance Rate for REMIC I Regular
         Interest I-LTB1 minus the Marker Rate, applied to an amount equal to
         the Uncertificated Balance of REMIC I Regular Interest I-LTB1;

                           (xiii) the REMIC I Remittance Rate for REMIC I
         Regular Interest I-LTB2 minus the Marker Rate, applied to an amount
         equal to the Uncertificated Balance of REMIC I Regular Interest I-LTB2;

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

                           (xv) 100% of the interest on REMIC I Regular Interest
         I-LTP.

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance or Notional Amount of all of the
Certificates of such Class. The Class A Certificates, the Mezzanine Certificates
and the Class B Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $25,000 and
integral multiples of $1.00 in excess thereof. The Class P Certificates are
issuable only in Percentage Interests corresponding to initial Certificate
Principal Balances of $20 and integral multiples thereof. The Class CE
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $10,000

                                       37
<PAGE>

and integral multiples of $1.00 in excess thereof; provided, however, that a
single Certificate of each such Class of Certificates may be issued having a
Percentage Interest corresponding to the remainder of the aggregate initial
Certificate Principal Balance of such Class or to an otherwise authorized
denomination for such Class plus such remainder. With respect to any Residual
Certificate, the undivided percentage ownership in such Class evidenced by such
Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and integral multiples
of 5% in excess thereof.

                  "Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Adjustable Rate Mortgage Loan may increase or decrease (without
regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such
Adjustment Date from the Mortgage Rate in effect immediately prior to such
Adjustment Date.

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

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

                           (ii) (A) demand and time deposits in, certificates of
         deposit of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) incorporated
         under the laws of the United States of America or any state thereof and
         subject to supervision and examination by federal and/or state
         authorities, so long as, at the time of such investment or contractual
         commitment providing for such investment, such depository institution
         or trust company (or, if the only Rating Agency is S&P, in the case of
         the principal depository institution in a depository institution
         holding company, debt obligations of the depository institution holding
         company) or its ultimate parent has a short-term uninsured debt rating
         in the highest available rating category of Moody's, Fitch and S&P and
         provided that each such investment has an original maturity of no more
         than 365 days; and provided further that, if the only Rating Agency is
         S&P and if the depository or trust company is a principal subsidiary of
         a bank holding company and the debt obligations of such subsidiary are
         not separately rated, the applicable rating shall be that of the bank
         holding company; and, provided further that, if the original maturity
         of such short-term obligations of a domestic branch of a foreign
         depository institution or trust company shall exceed 30 days, the
         short-term rating of such institution shall be A-1+ in the case of S&P
         if S&P is the Rating Agency; and (B) any other demand or time deposit
         or deposit which is fully insured by the FDIC;

                           (iii) repurchase obligations with a term not to
         exceed 30 days with respect to any security described in clause (i)
         above and entered into with a depository institution or trust company
         (acting as principal) rated A-1+ or higher by S&P, F-1 or higher by
         Fitch and A2 or higher by Moody's, provided, however, that collateral

                                       38
<PAGE>

         transferred pursuant to such repurchase obligation must be of the type
         described in clause (i) above and must (A) be valued daily at current
         market prices plus accrued interest, (B) pursuant to such valuation, be
         equal, at all times, to 105% of the cash transferred by a party in
         exchange for such collateral and (C) be delivered to such party or, if
         such party is supplying the collateral, an agent for such party, in
         such a manner as to accomplish perfection of a security interest in the
         collateral by possession of certificated securities;

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

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

                           (vi) units of money market funds that have been rated
         "AAA" by Fitch (if rated by Fitch), "AAAm" by S&P or "Aaa" by Moody's
         including any such money market fund managed or advised by the Master
         Servicer, the Trustee or any of their Affiliates; and

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

provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.

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

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

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

                                       39
<PAGE>

                  "Policy Payment": With respect to any Distribution Date, the
amount, if any, paid under the Certificate Insurance Policy for such
Distribution Date.

                  "Policy Payment Account": The separate Eligible Account
created and maintained by the Securities Administrator pursuant to Section 5.07
in the name of the Trustee for the benefit of the Class A-1 Certificateholders
and the Certificate Insurer, and designated "HSBC Bank USA, National
Association, as Trustee, in trust for the registered holders of Ace Securities
Corp.,
Asset-Backed Pass-Through Certificates, Series 2004-HE2, Class A-1
Certificates."

                  "Premium Amount": As to any Distribution Date, the product of
(x) the Premium Rate and (y) the Certificate Principal Balance of the Class A-1
Certificates immediately prior to such Distribution Date.

                  "Premium Rate": The per annum rate at which the "Premium" is
determined as described in the letter, dated September 20, 2004, among the
Certificate Insurer, the Master Servicer, the Trustee and the Depositor (a copy
of which has been provided by the Depositor to the Trustee).

                  "Prepayment Assumption": A prepayment rate for the Adjustable
Rate Mortgage Loans of 28% CPR and a prepayment rate of 100% PPC for the fixed
rate Mortgage Loans. The Prepayment Assumption is used solely for determining
the accrual of original issue discount on the Certificates for federal income
tax purposes. A CPR (or Constant Prepayment Rate) represents an annualized
constant assumed rate of prepayment each month of a pool of mortgage loans
relative to its outstanding principal balance for the life of such pool. A 100%
PPC represents (i) a per annum prepayment rate of 4% of the then outstanding
principal balance of the fixed rate Mortgage Loans in the first month of the
life of such Mortgage Loans, (ii) an additional 1.72727% per annum in each month
thereafter through the eleventh month and (iii) a constant prepayment rate of
23% per annum beginning in the twelfth month and in each month thereafter during
the life of the fixed rate Mortgage Loans.

                  "Prepayment Charge": With respect to any Principal Prepayment,
any prepayment premium, penalty or charge payable by a Mortgagor in connection
with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the
related Mortgage Note.

                  "Prepayment Charge Schedule": As of any date, the list of
Mortgage Loans providing for a Prepayment Charge included in the Trust Fund on
such date, attached hereto as Schedule 2 (including the prepayment charge
summary attached thereto). The Depositor shall deliver or cause the delivery of
the Prepayment Charge Schedule to the Servicer, the Master Servicer and the
Trustee on the Closing Date. The Prepayment Charge Schedule shall set forth the
following information with respect to each Prepayment Charge:

                           (i) the Mortgage Loan identifying number;

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

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

                                       40
<PAGE>

                           (iv) the term of the related Prepayment Charge;

                           (v) the original Stated Principal Balance of the
         related Mortgage Loan; and

                           (vi) the Stated Principal Balance of the related
         Mortgage Loan as of the Cut-off Date.

                  "Prepayment Interest Excess": With respect to each Mortgage
Loan that was the subject of a Principal Prepayment in full during the portion
of the related Prepayment Period occurring between the first day of the calendar
month in which such Distribution Date occurs and the Determination Date of the
calendar month in which such Distribution Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the
amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor. The Servicer may withdraw such Prepayment Interest Excess from the
Collection Account in accordance with Section 3.09(a)(x).

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each such Mortgage Loan that was the subject of a
Principal Prepayment in full or in part during the portion of the related
Prepayment Period occurring between the first day of the related Prepayment
Period and the last day of the calendar month preceding the month in which such
Distribution Date occurs that was applied by the Servicer to reduce the
outstanding principal balance of such Mortgage Loan on a date preceding the Due
Date in the succeeding Prepayment Period, an amount equal to interest at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for the
number of days commencing on the date on which the prepayment is applied and
ending on the last day of the calendar month preceding such Distribution Date.
The obligations of the Servicer and the Master Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section 3.22 and Section 4.18,
respectively of this Agreement. The Certificate Insurance Policy with respect to
the Insured Certificates will not cover any such Prepayment Interest Shortfalls.

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the 16th day of the month prior to the month in which
the related Distribution Date occurs (or, on the Cut-off Date, in connection
with the first Prepayment Period) and ending on the 15th day of the month in
which such Distribution Date occurs.

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

                  "Principal Distribution Amount": With respect to any
Distribution Date is the sum of the Group I Principal Distribution Amount and
the Group II Principal Distribution Amount.

                  "Principal Remittance Amount": With respect to any
Distribution Date is the sum of the Group I Principal Remittance Amount and the
Group II Principal Remittance Amount.

                                       41
<PAGE>

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.13(c) or Section 10.01, and as confirmed by a certification of a Servicing
Officer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or a P&I Advance by the Servicer, which payment or
P&I Advance had as of the date of purchase been distributed pursuant to Section
5.01, through the end of the calendar month in which the purchase is to be
effected and (y) an REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Net Mortgage Rate in effect from time to
time from the Due Date as to which interest was last covered by a payment by the
Mortgagor or a P&I Advance by the Servicer through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and P&I Advances that as of the date of purchase had been distributed as or to
cover REO Imputed Interest pursuant to Section 5.01, (iii) any unreimbursed
Servicing Advances and P&I Advances (including Nonrecoverable P&I Advances and
Nonrecoverable Servicing Advances) and any unpaid Servicing Fees allocable to
such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from
the Collection Account pursuant to Section 3.09(a)(ix) and Section 3.13(b) and
(v) in the case of a Mortgage Loan required to be purchased pursuant to Section
2.03, expenses reasonably incurred or to be incurred by the Servicer or the
Trustee in respect of the breach or defect giving rise to the purchase
obligation and any costs and damages incurred by the Trust Fund and the Trustee
in connection with any violation by any such Mortgage Loan of any predatory or
abusive lending law.

                  "QIB": As defined in Section 6.01(c).

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) if the mortgage loan is an Adjustable
Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum
Mortgage Rate on the Deleted Mortgage Loan, (iv) if the mortgage loan is an
Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the mortgage loan is
an Adjustable Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin
of the Deleted Mortgage Loan, (vi) if the mortgage loan is an Adjustable Rate
Mortgage Loan, have a next Adjustment Date not more than two months later than
the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage

                                       42
<PAGE>

Loan as of such date, (x) be secured by the same lien priority on the related
Mortgaged Property as the Deleted Loan, (xi) have a credit grade at least equal
to the credit grading assigned on the Deleted Mortgage Loan, (xii) be a
"qualified mortgage" as defined in the REMIC Provisions and (xiii) conform to
each representation and warranty set forth in Section 6 of the Mortgage Loan
Purchase Agreement applicable to the Deleted Mortgage Loan. In the event that
one or more mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate principal balances, the Mortgage Rates described in clause
(ii) hereof shall be determined on the basis of weighted average Mortgage Rates,
the terms described in clause (vii) hereof shall be determined on the basis of
weighted average remaining term to maturity, the Loan-to-Value Ratios described
in clause (ix) hereof shall be satisfied as to each such mortgage loan, the
credit grades described in clause (x) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.

                  "Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a nominal amount in excess of the existing
first mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and
to pay related closing costs.

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

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero), as reported by the Servicer to the Master Servicer (in substantially the
form of Schedule 4 hereto) equal to (i) the unpaid principal balance of such
Mortgage Loan as of the commencement of the calendar month in which the Final
Recovery Determination was made, plus (ii) accrued interest from the Due Date as
to which interest was last paid by the Mortgagor through the end of the calendar
month in which such Final Recovery Determination was made, calculated in the
case of each calendar month during such period (A) at an annual rate equal to
the annual rate at which interest was then accruing on such Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance of such Mortgage
Loan as of the close of business on the Distribution Date during such calendar
month, plus (iii) any amounts previously withdrawn from the Collection Account
in respect of such Mortgage Loan pursuant to Section 3.09(a)(ix) and Section
3.13(b), minus (iv) the proceeds, if any, received in respect of such Mortgage
Loan during the calendar month in which such Final Recovery Determination was
made, net of amounts that are payable therefrom to the Servicer with respect to
such Mortgage Loan pursuant to Section 3.09(a)(iii) of this Agreement.

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

                                       43
<PAGE>

plus (ii) accrued interest from the Due Date as to which interest was last paid
by the Mortgagor in respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, calculated in the case of each calendar month during such
period (A) at an annual rate equal to the annual rate at which interest was then
accruing on the related Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of the related Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) REO
Imputed Interest for such REO Property for each calendar month commencing with
the calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.09(a)(ix) and Section 3.13(b) of
this Agreement, minus (v) the aggregate of all P&I Advances and Servicing
Advances (in the case of Servicing Advances, without duplication of amounts
netted out of the rental income, Insurance Proceeds and Liquidation Proceeds
described in clause (vi) below) made by the Servicer in respect of such REO
Property or the related Mortgage Loan for which the Servicer has been or, in
connection with such Final Recovery Determination, will be reimbursed pursuant
to Section 3.21 of this Agreement out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.21 of this Agreement.

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

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

                  To the extent the Servicer receives Subsequent Recoveries,
with respect to any Mortgage Loan, the amount of Realized Loss with respect to
that Mortgage Loan will be reduced to the extent such recoveries are applied to
reduce the Certificate Principal Balance of any Class on any Distribution Date.

                  "Record Date": With respect to each Distribution Date and the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates,
the Business Day immediately preceding such Distribution Date for so long as
such Certificates are Book-Entry Certificates. With respect to each Distribution
Date and any other Class of Certificates, including any Definitive Certificates,
the last day of the calendar month immediately preceding the month in which such
Distribution Date occurs.

                  "Reference Banks": Barclay's Bank PLC, The Tokyo Mitsubishi
Bank and National Westminster Bank PLC and their successors in interest;
provided, however, that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks

                                       44
<PAGE>

selected by the Securities Administrator which are engaged in transactions in
Eurodollar deposits in the International Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Depositor or any Affiliate thereof and (iii)
which have been designated as such by the Securities Administrator.

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

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

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

                  "Regulation S Temporary Global Certificate": As defined in
Section 6.01(c).

                  "Regulation S Permanent Global Certificate": As defined in
Section 6.01(c).

                  "Reimbursement Amount": The amount of all payments made by the
Certificate Insurer pursuant to the Certificate Insurance Policy which have not
been previously repaid, with interest thereon at the applicable Pass-Through
Rate, plus all costs and expenses incurred by the Certificate Insurer in
connection with any actions, suits or proceedings with respect to the
Certificate Insurance Policy that have been certified by the Certificate Insurer
to the Securities Administrator, with interest thereon at the applicable
Pass-Through Rate.

                  "Release Date": The 40th day after the later of (i)
commencement of the offering of the Class B Certificates and (ii) the Closing
Date.

                  "Relief Act": The Servicemembers Civil Relief Act, as amended,
or similar state or local laws.

                  "Relief Act Interest Shortfall" : With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period as a
result of the application of the Relief Act. The Certificate Insurance Policy
with respect to the Insured Certificates will not cover any such Relief Act
Interest Shortfalls.

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) and (v) the Collection

                                       45
<PAGE>

Account, the Distribution Account and any REO Account, and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto and (vi) with
respect to the Class A-1 Certificates only, the Certificate Insurance Policy.
Notwithstanding the foregoing, however, REMIC I specifically excludes (i) all
payments and other collections of principal and interest due on the Mortgage
Loans on or before the Cut-off Date and all Prepayment Charges payable in
connection with Principal Prepayments made before the Cut-off Date; (ii) the
Reserve Fund and any amounts on deposit therein from time to time and any
proceeds thereof and (iii) the Cap Contracts.

                  "REMIC I Interest Loss Allocation Amount" : With respect to
any Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, divided by (b) 12.

                  "REMIC I Marker Allocation Percentage": 0.50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest
I-LTZZ and REMIC I Regular Interest I-LTP.

                  "REMIC I Overcollateralization Amount": With respect to any
date of determination, (i) 0.50% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A,
REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTB1, REMIC
I Regular Interest I-LTB2 and REMIC I Regular Interest I-LTP, in each case as of
such date of determination.

                  "REMIC I Principal Loss Allocation Amount" : With respect to
any Distribution Date, an amount equal to (a) the product of (i) 0.50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I
Regular Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTB1 and REMIC I Regular Interest I-LTB2 and the
denominator of which is the aggregate of the Uncertificated Balances of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A, REMIC I Regular
Interest I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-

                                       46
<PAGE>

LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest I-LTB1, REMIC I
Regular Interest I-LTB2 and REMIC I Regular Interest I-LTZZ.

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

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

                  "REMIC I Regular Interest I-LTA1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA2A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA2B": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2B
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA2C": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2C
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTB1
shall accrue interest at the related REMIC I

                                       47
<PAGE>

Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTB2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM6": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM6
shall accrue interest at the related REMIC I

                                       48
<PAGE>

Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

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

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

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

                  "REMIC I Regular Interest I-LT1A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT1B": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1B
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT2A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT2B": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2B
shall accrue interest at the related REMIC I

                                       49
<PAGE>

Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

                  "REMIC I Remittance Rate": With respect to REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular Interest I-LTZZ, REMIC
I Regular Interest I-LTP, REMIC I Regular Interest I-LT1A, REMIC I Regular
Interest I-LT2A and REMIC I Regular Interest I-LTXX, the weighted average of the
Expense Adjusted Mortgage Rates of the Mortgage Loans. With respect to REMIC I
Regular Interest I-LT1B, the weighted average of the Expense Adjusted Mortgage
Rates of the Group I Mortgage Loans. With respect to REMIC I Regular Interest
I-LT2B, the weighted average of the Expense Adjusted Mortgage Rates of the Group
II Mortgage Loans.

                  "REMIC I Sub WAC Allocation Percentage": 0.50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I-LT1A, REMIC I Regular Interest I-LT1B, REMIC I
Regular Interest I-LT2A, REMIC I Regular Interest I-LT2B and REMIC I Regular
Interest I-LTXX.

                  "REMIC I Subordinated Balance Ratio": The ratio among the
Uncertificated Balances of each REMIC I Regular Interest ending with the
designation "A,", equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Stated Principal Balance of
the Group I Mortgage Loans or Group II Mortgage Loans, as applicable over (y)
the current Certificate Principal Balance of related Class A Certificates.

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

                  "REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit
of the REMIC II Certificateholders pursuant to Section 2.07, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

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

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

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

                  "REMIC Regular Interest": Any REMIC I Regular Interest.

                  "REMIC Remittance Rate": The REMIC I Remittance Rate.

                                       50
<PAGE>

                  "Remittance Report": A report by the Servicer pursuant to
Section 5.03(a).

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

                  "REO Account": The account or accounts maintained, or caused
to be maintained, by the Servicer in respect of an REO Property pursuant to
Section 3.21 of this Agreement.

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

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

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the Servicer
pursuant to Section 3.21(d) of this Agreement for unpaid Servicing Fees in
respect of the related Mortgage Loan and unreimbursed Servicing Advances and P&I
Advances in respect of such REO Property or the related Mortgage Loan, over (b)
the REO Imputed Interest in respect of such REO Property for such calendar
month.

                  "REO Property": A Mortgaged Property acquired by the Servicer
or its nominee on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.21 of this Agreement.

                  "Required Overcollateralization Amount" : With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 1.35% and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 2.70% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (y) an
amount equal to the product of (A) 0.50% and (B) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date.

                  "Reserve Fund": A fund created pursuant to Section 3.24 which
shall be an asset of the Trust Fund but which shall not be an asset of any Trust
REMIC.

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

                                       51
<PAGE>

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

                  "Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a Fannie Mae eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.

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

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

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

                  "Rule 144A": As defined in Section 6.01(c).

                  "S&P": Standard and Poor's, a division of the McGraw-Hill
Companies, Inc.

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

                                       52
<PAGE>

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

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

                  "Securities Administrator": As of the Closing Date, Wells
Fargo Bank, N.A. and thereafter, its respective successors in interest that meet
the qualifications of this Agreement. The Securities Administrator and the
Master Servicer shall at all times be the same Person.

                  "Seller": DB Structured Products, Inc. or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.

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

                  "Servicer": Ocwen Federal Bank FSB, or any successor thereto
appointed hereunder in connection with the servicing and administration of the
Mortgage Loans.

                  "Servicer Event of Default": One or more of the events
described in Section 8.01(a).

                  "Servicer Remittance Date": With respect to any Distribution
Date, by 12:00 p.m. New York time three Business Days immediately preceding the
related Distribution Date.

                  "Servicer Report": A report (substantially in the form of
Schedule 5 hereto) or otherwise in form and substance acceptable to the Master
Servicer and Securities Administrator on an electronic data file or tape
prepared by the Servicer pursuant to Section 5.03(a) of this Agreement with such
additions, deletions and modifications as agreed to by the Master Servicer, the
Securities Administrator and the Servicer.

                  "Servicing Advances": The customary and reasonable
"out-of-pocket" costs and expenses incurred by the Servicer in connection with a
default, delinquency or other unanticipated event by the Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including but not
limited to foreclosures, in respect of a particular Mortgage Loan, including any
expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS(R) System, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Section 3.01, Section
3.07, Section 3.11, Section 3.13 and Section 3.21 of this Agreement. Servicing
Advances also include any reasonable "out-of-pocket" cost and expenses
(including legal fees) incurred by the Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement. The Servicer shall not be required to make any Nonrecoverable
Servicing Advances.

                                       53
<PAGE>

                  "Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one-twelfth of the product of the
Servicing Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month. The Servicing Fee is
payable solely from collections of interest on the Mortgage Loans.

                  "Servicing Fee Rate":  0.50% per annum.

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

                  "Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.

                  "Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 11.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Servicer or a successor to the Servicer (including the Master
Servicer) and distributed pursuant to Section 5.01 of this Agreement on or
before such date of determination, (ii) all Principal Prepayments received after
the Cut-off Date, to the extent distributed pursuant to Section 5.01 of this
Agreement on or before such date of determination, (iii) all Liquidation
Proceeds and Insurance Proceeds applied by the Servicer as recoveries of
principal in accordance with the provisions of Section 3.13, to the extent
distributed pursuant to Section 5.01 of this Agreement on or before such date of
determination, and (iv) any Realized Loss incurred with respect thereto as a
result of a Deficient Valuation made during or prior to the Prepayment Period
for the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of REMIC I, minus the sum of (i) if such REO Property was acquired before the
Distribution Date in any calendar month, the principal portion of the Monthly
Payment due on the Due Date in the calendar month of acquisition, to the extent
advanced by the Servicer or a successor to the Servicer (including the Master
Servicer) and distributed pursuant to Section 5.01 of this Agreement, on or
before such date of determination

                                       54
<PAGE>

and (ii) the aggregate amount of REO Principal Amortization in respect of such
REO Property for all previously ended calendar months, to the extent distributed
pursuant to Section 4.01 of this Agreement on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

                  "Stepdown Date": The earlier to occur of (i) the later to
occur of (a) the Distribution Date occurring in October 2007 and (b) the first
Distribution Date on which the Credit Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans but prior to any distribution of the Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 44.50% and (ii) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero.

                  "Subordinate Certificates" : Collectively, the Mezzanine
Certificates, the Class B Certificates and the Class CE Certificates.

                  "Subsequent Recoveries": As of any Distribution Date, amounts
received during the related Prepayment Period by the Servicer specifically
related to a defaulted Mortgage Loan or disposition of an REO Property prior to
the related Prepayment Period that resulted in a Realized Loss, after the
liquidation or disposition of such defaulted Mortgage Loan.

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

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

                  "Substitution Shortfall Amount": As defined in Section 2.03.

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

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

                  "Termination Price": As defined in Section 10.01.

                  "Terminator":  As defined in Section 10.01.

                                       55
<PAGE>

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

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

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

                  "Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if either (x) the Delinquency Percentage exceeds 36.00% of
the Credit Enhancement Percentage with respect to such Distribution Date or (y)
the aggregate amount of Realized Losses incurred since the Cut-off Date through
the last day of the related Due Period divided by the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable
percentages set forth below with respect to such Distribution Date:

<TABLE>
<CAPTION>

              Distribution Date                     Percentage
              -----------------                     ----------
<S>                                                 <C>
              October 2007 to September 2008        4.00%, plus 1/12 of 1.50% for each month thereafter
              October 2008 to September 2009        5.50%, plus 1/12 of 0.75% for each month thereafter
              October 2009 to September 2010        6.25%, plus 1/12 of 0.50% for each month thereafter
              October 2010 and thereafter           6.75%
</TABLE>

                  "Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2004-HE2, the trust created hereunder.

                  "Trust Fund": Collectively, all of the assets of REMIC I,
REMIC II and the Reserve Fund and any amounts on deposit therein and any
proceeds thereof, the Prepayment Charges and the Cap Contracts.

                  "Trust REMIC": REMIC I or REMIC II.

                  "Trustee": HSBC Bank USA, National Association a national
banking association, or its successor in interest, or any successor trustee
appointed as herein provided.

                  "Uncertificated Balance": The amount of the REMIC I Regular
Interests outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
the REMIC I Regular Interest shall be reduced by all distributions of principal
made on such REMIC I Regular Interest on such Distribution Date pursuant to
Section 5.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 5.04 and the Uncertificated Balance of REMIC I Regular Interest I-LTZZ
shall be increased by interest deferrals as provided in Section 5.01(a)(1)(i).
The Uncertificated Balance of each REMIC I Regular Interest shall never be less
than zero.

                                       56
<PAGE>

                  "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of the REMIC
I Regular Interests shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest, shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.22
or Section 4.18 of this Agreement and (b) the aggregate amount of any Relief Act
Interest Shortfall, if any allocated, in each case, to such REMIC I Regular
Interest or REMIC I Regular Interest pursuant to Section 1.02. In addition,
Uncertificated Interest with respect to each Distribution Date, as to any
Uncertificated REMIC Regular Interest, shall be reduced by Realized Losses, if
any, allocated to such Uncertificated REMIC Regular Interest pursuant to Section
1.02 and Section 5.04.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.11.

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof
(except, in the case of a partnership, to the extent provided in regulations)
provided that, for purposes solely of the restrictions on the transfer of any
Class R Certificate, no partnership or other entity treated as a partnership for
United States federal income tax purposes shall be treated as a United States
Person unless all persons that own an interest in such partnership either
directly or through any entity that is not a corporation for United States
federal income tax purposes are required to be United States Persons, or an
estate whose income is subject to United States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust. To the extent prescribed in regulations by the Secretary of the Treasury,
a trust which was in existence on August 20, 1996 (other than a trust treated as
owned by the grantor under subpart E of part I of subchapter J of chapter I of
the Code), and which was treated as a United States person on August 20, 1996
may elect to continue to be treated as a United States person notwithstanding
the previous sentence. The term "United States" shall have the meaning set forth
in Section 7701 of the Code.

                  "Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the related Originator of the Mortgage Loan at the time of origination of the
Mortgage Loan by an appraiser who met the minimum requirements of Fannie Mae and
Freddie Mac and (b) the value thereof as determined by a review appraisal
conducted by the related Originator of the Mortgage Loan in accordance with the
related Originator's underwriting guidelines, and (ii) the purchase price paid
for the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan; provided, however, (A) in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the lesser of (1) the
value determined by an appraisal made for the related Originator of the Mortgage
Loan of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
Fannie

                                       57
<PAGE>

Mae and Freddie Mac and (2) the value thereof as determined by a review
appraisal conducted by the related Originator of the Mortgage Loan in accordance
with the related Originator's underwriting guidelines, and (B) in the case of a
Mortgage Loan originated in connection with a "lease-option purchase," such
value of the Mortgaged Property is based on the lower of the value determined by
an appraisal made for the Originator of such Mortgage Loan at the time of
origination or the sale price of such Mortgaged Property if the "lease option
purchase price" was set less than 12 months prior to origination, and is based
on the value determined by an appraisal made for the related Originator of such
Mortgage Loan at the time of origination if the "lease option purchase price"
was set 12 months or more prior to origination.

                  "Verification Report":  As defined in Section 4.19.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any such Certificate. With respect to any
date of determination, 98% of all Voting Rights will be allocated among the
holders of the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated among the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Class R Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date. Notwithstanding any of the
foregoing, unless a Certificate Insurer Default is continuing, on any date on
which any Insured Certificates are outstanding, or any amounts are owed to the
Certificate Insurer under this Agreement, the Certificate Insurer will have all
Voting Rights of the Insured Certificates. So long as the Certificate Insurer
has the Voting Rights pursuant to the preceding sentence, the reference to
holders of the Class A-1 Certificates shall be deemed to refer to the
Certificate Insurer.

                  "Wells Fargo": Wells Fargo Bank, N.A. or any successor
thereto.

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

                  For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
CE Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Servicer pursuant to Section 3.22 of this Agreement or by the Master Servicer
pursuant to Section 4.18 of this Agreement) and any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to the Class CE Certificates, second, to the Class B-2
Certificates, third, to the Class B-1 Certificates, fourth, to the Class M-6
Certificates, fifth, to the Class M-5 Certificates, sixth, to the Class M-4
Certificates, seventh, to the Class M-3 Certificates, eighth, to the Class M-2
Certificates, ninth, to the Class M-1 Certificates and tenth, to the Class A
Certificates, on a PRO RATA basis, in each case based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance or Notional Amount, as applicable, of
each such Certificate and (2) the aggregate amount of any Realized Losses
allocated to the Class B Certificates, the Mezzanine Certificates and Net WAC
Rate Carryover Amounts paid to the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates incurred for any

                                       58
<PAGE>

Distribution Date shall be allocated to the Class CE Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount thereof, as applicable.

                                    For purposes of calculating the amount of
                  Uncertificated Interest for the REMIC I Regular Interests for
                  any Distribution Date:

                                    (A) The REMIC I Marker Allocation Percentage
                  of the aggregate amount of any Prepayment Interest Shortfalls
                  (to the extent not covered by payments by the Servicer
                  pursuant to Section 3.22 of this Agreement or the Master
                  Servicer pursuant to Section 4.18) and the REMIC I Marker
                  Allocation Percentage of any Relief Act Interest Shortfalls
                  incurred in respect of the Mortgage Loans for any Distribution
                  Date shall be allocated among REMIC I Regular Interest I-LTA1,
                  REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest
                  I-LTA2B, REMIC I Regular Interest I-LTA2C, REMIC I Regular
                  Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
                  Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
                  REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
                  I-LTM6, REMIC I Regular Interest I-LTBI1 REMIC I Regular
                  Interest I-LTB2 and REMIC I Regular Interest I-LTZZ PRO RATA
                  based on, and to the extent of, one month's interest at the
                  then applicable respective REMIC I Remittance Rate on the
                  respective Uncertificated Balance of each such REMIC I Regular
                  Interest; and

                                    (B) The REMIC I Sub WAC Allocation
                  Percentage of the aggregate amount of any Prepayment Interest
                  Shortfalls (to the extent not covered by payments by the
                  Servicer pursuant to Section 3.22 of this Agreement or by the
                  Master Servicer pursuant to Section 4.18 of this Agreement)
                  and the REMIC I Sub WAC Allocation Percentage of any Relief
                  Act Interest Shortfalls incurred in respect of the Mortgage
                  Loans for any Distribution Date shall be allocated first, to
                  Uncertificated Interest payable to REMIC I Regular Interest
                  I-LT1A, REMIC I Regular Interest I-LT1B, REMIC I Regular
                  Interest I-LT2A, REMIC I Regular Interest I-LT2B and REMIC I
                  Regular Interest I-LTXX, PRO RATA based on, and to the extent
                  of, one month's interest at the then applicable respective
                  REMIC I Remittance Rate on the respective Uncertificated
                  Balance of each such REMIC I Regular Interest.

                                       59
<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of the Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, on behalf of the Trust, without recourse, for the benefit of the
Certificateholders and the Certificate Insurer, all the right, title and
interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (including, without limitation the right to enforce the
obligations of the other parties thereto thereunder), and all other assets
included or to be included in REMIC I. Such assignment includes all interest and
principal received by the Depositor or the Servicer on or with respect to the
Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee and the Servicer an executed copy of the Mortgage Loan Purchase
Agreement.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with the Custodian pursuant to the Custodial
Agreement the documents with respect to each Mortgage Loan as described under
Section 2 of the Custodial Agreement (the "Mortgage Loan Documents"). In
connection with such delivery and as further described in the Custodial
Agreement, the Custodian will be required to review such Mortgage Loan Documents
and deliver to the Trustee, the Depositor, the Servicer and the Seller
certifications (in the forms attached to the Custodial Agreement) with respect
to such review with exceptions noted thereon. In addition, under the Custodial
Agreement the Depositor will be required to cure certain defects with respect to
the Mortgage Loan Documents for the related Mortgage Loans after the delivery
thereof by the Depositor to the Custodian as more particularly set forth
therein.

                  Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files, including,
but not limited to certain insurance policies and documents contemplated by
Section 4.11, and preparation and delivery of the certifications shall be
performed by the Custodian pursuant to the terms and conditions of the Custodial
Agreement.

                  The Depositor shall deliver or cause the related Originator to
deliver to the Servicer copies of all trailing documents required to be included
in the Mortgage File at the same time the originals or certified copies thereof
are delivered to the Trustee or Custodian, such documents including the
mortgagee policy of title insurance and any Mortgage Loan Documents upon return
from the recording office. The Servicer shall not be responsible for any
custodian fees or other costs incurred in obtaining such documents and the
Depositor shall cause the Servicer to be reimbursed for any such costs the
Servicer may incur in connection with performing its obligations under this
Agreement.

                  The Mortgage Loans permitted by the terms of this Agreement to
be included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the

                                       60
<PAGE>

Mortgage Loan Purchase Agreement, which contains, among other representations
and warranties, a representation and warranty of the Seller that no Mortgage
Loan is a "High-Cost Home Loan" as defined in the New Jersey Home Ownership Act
effective November 27, 2003 or as defined in the New Mexico Home Loan Protection
Act effective January 1, 2004) and (ii) Qualified Substitute Mortgage Loans
(which, by definition as set forth herein and referred to in the Mortgage Loan
Purchase Agreement, are required to conform to, among other representations and
warranties, the representation and warranty of the Seller that no Qualified
Substitute Mortgage Loan is a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership Act effective November 27, 2003 or as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004. The Depositor and the
Trustee on behalf of the Trust understand and agree that it is not intended that
any mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003 or as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004.

                  SECTION 2.02. Acceptance of REMIC I by Trustee.

                  The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage
Loan Documents and all other assets included in the definition of "REMIC I"
under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into
the Distribution Account) and declares that it holds (or the Custodian on its
behalf holds) and will hold such documents and the other documents delivered to
it constituting a Mortgage Loan Document, and that it holds (or the Custodian on
its behalf holds) or will hold all such assets and such other assets included in
the definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  SECTION 2.03. Repurchase or Substitution of Mortgage Loans.

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
a breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan that materially
and adversely affects the value of such Mortgage Loan or the interest therein of
the Certificateholders or the Certificate Insurer, the Trustee shall promptly
notify the Seller and the Servicer of such defect, missing document or breach
and request that the Seller deliver such missing document, cure such defect or
breach within 60 days from the date the Seller was notified of such missing
document, defect or breach, and if the Seller does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from REMIC I
at the Purchase Price within 90 days after the date on which the Seller was
notified of such missing document, defect or breach, if and to the extent that
the Seller is obligated to do so under the Mortgage Loan Purchase Agreement. The
Purchase Price for the repurchased Mortgage Loan shall be remitted to the
Servicer for deposit in the Collection Account and the Trustee, upon receipt of
written certification from the Servicer of such deposit, shall release or cause
the Custodian (upon receipt of a request for release in the form attached to the
Custodial Agreement) to release to the Seller the related Mortgage File and the
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, representation or warranty, as the Seller shall
furnish to it and as shall be necessary to vest in the Seller any Mortgage Loan
released pursuant

                                       61
<PAGE>

hereto, and the Trustee shall not have any further responsibility with regard to
such Mortgage File. In lieu of repurchasing any such Mortgage Loan as provided
above, if so provided in the Mortgage Loan Purchase Agreement, the Seller may
cause such Mortgage Loan to be removed from REMIC I (in which case it shall
become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans in the manner and subject to the limitations set forth in Section
2.03(b). It is understood and agreed that the obligation of the Seller to cure
or to repurchase (or to substitute for) any Mortgage Loan as to which a document
is missing, a material defect in a constituent document exists or as to which
such a breach has occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the Trustee and the
Certificateholders.

                  In addition, promptly upon the earlier of discovery by the
Servicer or receipt of notice by the Servicer of the breach of the
representation or covenant of the Seller set forth in Section 5(xiv) of the
Mortgage Loan Purchase Agreement which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
the Servicer shall promptly notify the Seller and the Trustee of such breach.
The Trustee shall enforce the obligations of the Seller under the Mortgage Loan
Purchase Agreement to remedy such breach to the extent and in the manner set
forth in the Mortgage Loan Purchase Agreement.

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

                  As to any Deleted Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Trustee or the Custodian on
behalf of the Trustee, for such Qualified Substitute Mortgage Loan or Loans, the
Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other
documents and agreements, with all necessary endorsements thereon, as are
required by Section 2 of the Custodial Agreement, as applicable, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Custodian on behalf of the Trustee shall acknowledge receipt of such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents and deliver to the Depositor, the Trustee and the
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, an
initial certification pursuant to the Custodial Agreement, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Custodian on behalf of the Trustee shall deliver to the Depositor, the Trustee
and the Servicer a final certification pursuant to the Custodial Agreement with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of REMIC I
and will be retained by the Seller. For the month of substitution, distributions
to Certificateholders will reflect the Monthly Payment due on such Deleted
Mortgage Loan on or before the Due Date in the month of substitution, and the
Seller shall thereafter be entitled to retain all amounts subsequently received
in respect of such Deleted Mortgage Loan. The Depositor shall give or cause to
be given written notice to the Certificateholders and the Certificate Insurer
that such substitution has taken place, shall amend the Mortgage Loan Schedule
to reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall

                                       62
<PAGE>

deliver a copy of such amended Mortgage Loan Schedule to the Trustee and the
Servicer. Upon such substitution, such Qualified Substitute Mortgage Loan or
Loans shall constitute part of the Trust Fund and shall be subject in all
respects to the terms of this Agreement and the Mortgage Loan Purchase
Agreement, including all applicable representations and warranties thereof
included herein or in the Mortgage Loan Purchase Agreement.

                  For any month in which the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (the "Substitution Shortfall Amount"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Scheduled Principal Balance thereof as of the date of substitution, together
with one month's interest on such Scheduled Principal Balance at the applicable
Net Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Shortfall Amount, if any, and the Trustee or
the Custodian on behalf of the Trustee, upon receipt of the related Qualified
Substitute Mortgage Loan or Loans, upon receipt of a request for release in the
form attached to the Custodial Agreement and certification by the Servicer of
such deposit, shall release to the Seller the related Mortgage File or Files and
the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranty, as the
Seller shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.

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

                  (c) Upon discovery by the Depositor, the Seller, the Servicer
or the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or substitute one
or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan
within 90 days of the earlier of discovery or receipt of such notice with
respect to such affected Mortgage Loan. Such repurchase or substitution shall be
made by (i) the Seller if the affected Mortgage Loan's status as a non-qualified
mortgage is or results from a breach of any representation, warranty or covenant
made by the Seller under the Mortgage Loan Purchase Agreement or (ii) the
Depositor, if the affected Mortgage Loan's status as a non-qualified mortgage is
a breach of no representation or warranty. Any such repurchase or substitution
shall be made in the same manner as set forth in Section 2.03(a). The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty.

                                       63
<PAGE>

                  (d) With respect to a breach of the representations made
pursuant to Section 5(xiv) of the Mortgage Loan Purchase Agreement that
materially and adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders or the Certificate Insurer, the Seller shall
be required to take the actions set forth in this Section 2.03.

                  (e) Within 90 days of the earlier of discovery by the Servicer
or receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan or Prepayment Charge, the Servicer shall cure such breach in all material
respects.

                  SECTION 2.04. Representations and Warranties of the Master
Servicer.

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

                           (i) The Master Servicer is a national banking
         association duly formed, validly existing and in good standing under
         the laws of the United States of America and is duly authorized and
         qualified to transact any and all business contemplated by this
         Agreement to be conducted by the Master Servicer;

                           (ii) The Master Servicer has the full power and
         authority to conduct its business as presently conducted by it and to
         execute, deliver and perform, and to enter into and consummate, all
         transactions contemplated by this Agreement. The Master Servicer has
         duly authorized the execution, delivery and performance of this
         Agreement, has duly executed and delivered this Agreement, and this
         Agreement, assuming due authorization, execution and delivery by the
         other parties hereto, constitutes a legal, valid and binding obligation
         of the Master Servicer, enforceable against it in accordance with its
         terms except as the enforceability thereof may be limited by
         bankruptcy, insolvency, reorganization or similar laws affecting the
         enforcement of creditors' rights generally and by general principles of
         equity;

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

                                       64
<PAGE>

         obligations under this Agreement or (y) the business, operations,
         financial condition, properties or assets of the Master Servicer taken
         as a whole;

                           (iv) The Master Servicer does not believe, nor does
         it have any reason or cause to believe, that it cannot perform each and
         every covenant made by it and contained in this Agreement;

                           (v) No litigation is pending against the Master
         Servicer that would materially and adversely affect the execution,
         delivery or enforceability of this Agreement or the ability of the
         Master Servicer to perform any of its other obligations hereunder in
         accordance with the terms hereof,

                           (vi) There are no actions or proceedings against, or
         investigations known to it of, the Master Servicer before any court,
         administrative or other tribunal (A) that might prohibit its entering
         into this Agreement, (B) seeking to prevent the consummation of the
         transactions contemplated by this Agreement or (C) that might prohibit
         or materially and adversely affect the performance by the Master
         Servicer of its obligations under, or validity or enforceability of,
         this Agreement; and

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

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.04 shall survive the
resignation or termination of the parties hereto and the termination of this
Agreement and shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.

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

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

                           (i) The Servicer is a federally chartered savings
         bank duly organized and validly existing under the laws of the United
         States and is duly authorized and qualified to transact any and all
         business contemplated by this Agreement to be conducted by the Servicer
         in any state in which a Mortgaged Property is located or is otherwise
         not required under applicable law to effect such qualification and, in
         any event, is in compliance with the doing business laws of any such
         State, to the extent necessary to ensure its ability to enforce each
         Mortgage Loan and to service the Mortgage Loans in accordance with the
         terms of this Agreement;

                           (ii) The Servicer has the full power and authority to
         conduct its business as presently conducted by it and to execute,
         deliver and perform, and to enter

                                       65
<PAGE>

         into and consummate, all transactions contemplated by this Agreement.
         The Servicer has duly authorized the execution, delivery and
         performance of this Agreement, has duly executed and delivered this
         Agreement, and this Agreement, assuming due authorization, execution
         and delivery by the other parties hereto, constitutes a legal, valid
         and binding obligation of the Servicer, enforceable against it in
         accordance with its terms, except as the enforceability thereof may be
         limited by bankruptcy, insolvency, reorganization or similar laws
         affecting the enforcement of creditors' rights generally and by general
         principles of equity;

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

                           (iv) The Servicer does not believe, nor does it have
         any reason or cause to believe, that it cannot perform each and every
         covenant made by it and contained in this Agreement;

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

                           (vi) There are no actions or proceedings against, or
         investigations known to it of, the Servicer before any court,
         administrative or other tribunal (A) that might prohibit its entering
         into this Agreement, (B) seeking to prevent the consummation of the
         transactions contemplated by this Agreement or (C) that might prohibit
         or materially and adversely affect the performance by the Servicer of
         its obligations under, or the validity or enforceability of, this
         Agreement;

                           (vii) No consent, approval, authorization or order of
         any court or governmental agency or body is required for the execution,
         delivery and performance by the Servicer of, or compliance by the
         Servicer with, this Agreement or the consummation by it of the
         transactions contemplated by this Agreement, except for such consents,

                                       66
<PAGE>

         approvals, authorizations or orders, if any, that have been obtained
         prior to the Closing Date;

                           (viii) The Servicer has fully furnished and will
         continue to fully furnish, in accordance with the Fair Credit Reporting
         Act and its implementing regulations, accurate and complete information
         (e.g., favorable and unfavorable) on its borrower credit files to
         Equifax, Experian and Trans Union Credit Information Company or their
         successors on a monthly basis; and

                           (ix) The Servicer will not waive any Prepayment
         Charge other than in accordance with the standard set forth in Section
         3.01.

                  Notwithstanding anything to the contrary contained in this
Agreement, if the covenant of the Servicer set forth in Section 2.05(ix) above
is breached, the Servicer will pay the amount of such waived Prepayment Charge,
from its own funds without any right of reimbursement, for the benefit of the
Holders of the Class P Certificates, by depositing such amount into the
Collection Account within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of such breach. Furthermore, notwithstanding
any other provisions of this Agreement, any payments made by the Servicer in
respect of any waived Prepayment Charges pursuant to this paragraph shall be
deemed to be paid outside of the Trust Fund.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive the
resignation or termination of the parties hereto, the termination of this
Agreement and the delivery of the Mortgage Files to the Custodian and shall
inure to the benefit of the Trustee, the Master Servicer, the Securities
Administrator, the Depositor, the Certificateholders and the Certificate
Insurer. Upon discovery by any such Person or the Servicer of a breach of any of
the foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan, Prepayment Charge or the
interests therein of the Certificateholders or the Certificate Insurer, the
party discovering such breach shall give prompt written notice (but in no event
later than two Business Days following such discovery) to the Trustee. Subject
to Section 8.01, unless such breach shall not be susceptible of cure within 90
days, the obligation of the Servicer set forth in Section 2.03(e) to cure
breaches shall constitute the sole remedy against the Servicer available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders and the Certificate Insurer respecting a breach of the
representations, warranties and covenants contained in this Section 2.05.

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

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to the Custodian on its behalf of the Mortgage Loan
Documents, subject to the provisions of Section 2.01 and Section 2.02 hereof and
Section 2 of the Custodial Agreement, together with the assignment to it of all
other assets included in REMIC I, the receipt of which is hereby acknowledged.
The interests evidenced by the Class R-I Interest, together with the REMIC I
Regular Interests, constitute the entire beneficial ownership interest in REMIC
I. The rights of the Holders of the Class R-I Interest and REMIC I (as holder of
the REMIC I Regular Interests) to receive distributions from the proceeds of
REMIC I in respect of the Class R-I

                                       67
<PAGE>

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

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

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R-II Interest
and REMIC II (as holder of the REMIC I Regular Interests). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Holders of the Class R-II Interest and REMIC II (as holder of the
REMIC I Regular Interests). The rights of the Holder of the Class R-II Interest
and REMIC II (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC II in respect of the Class R-II
Interest and Regular Certificate, respectively, and all ownership interests
evidenced or constituted by the Class R-II Interest and the Regular
Certificates, shall be as set forth in this Agreement. The Class R-II Interest
and the Regular Certificates shall constitute the entire beneficial ownership
interest in REMIC II.

                  SECTION 2.08. Issuance of Residual Certificates.

                  The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Securities Administrator has executed and authenticated and the Trustee has
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations. The Class R Certificates evidence ownership in the
Class R-I Interest and the Class R-II Interest.

                  SECTION 2.09. Establishment of the Trust.

                  The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust to be known, for convenience, as "ACE Securities Corp., Home Equity Loan
Trust, Series 2004-HE2" and does hereby appoint HSBC Bank USA, National
Association as Trustee in accordance with the provisions of this Agreement.

                                       68
<PAGE>

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                         OF THE MORTGAGE LOANS; ACCOUNTS

                  SECTION 3.01. The Servicer to Act as a Servicer.

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

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

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

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

                           (iv) the Servicer's right to receive compensation for
         its services hereunder.

                  To the extent consistent with the foregoing, the Servicer
shall also seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes related to the Mortgage Loans and shall waive (or
permit a Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and such waiver is related to a default or reasonably foreseeable
default and would, in the reasonable judgment of the Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related the Mortgage Loan and, if such waiver is made in connection with a
refinancing of the related the Mortgage Loan, such refinancing is related to a
default or a reasonably foreseeable default, (ii) such Prepayment Charge is
unenforceable in accordance with applicable law or the collection of such
related Prepayment Charge would otherwise violate applicable law or (iii) the
collection of such Prepayment Charge would be considered "predatory" pursuant to
written guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters.. Notwithstanding any provision in this Agreement to the
contrary, in the event the Prepayment Charge payable under the terms of the
Mortgage Note related to a Mortgage Loan is less than the amount of the
Prepayment Charge set forth in the Prepayment Charge Schedule or other
information provided to the Servicer, the Servicer shall not have any liability
or obligation with respect to such difference, and in addition shall not have
any liability or obligation to pay the amount of any uncollected Prepayment
Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Prepayment Charge Schedule.

                                       69
<PAGE>

                  Subject only to the above-described servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
respective Mortgage Loans, the Servicer shall have full power and authority, to
do or cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable with the goal of
maximizing proceeds of the Mortgage Loan. Without limiting the generality of the
foregoing, the Servicer in its own name is hereby authorized and empowered by
the Trustee when the Servicer believes it appropriate in its best judgment, to
execute and deliver, on behalf of the Trust Fund, the Certificateholders and the
Trustee or any of them, and upon written notice to the Trustee, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge or subordination, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee, for the benefit of the Trust Fund and the
Certificateholders. The Servicer shall service and administer the Mortgage Loans
in accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.14, the Trustee shall execute, at the written request of
the Servicer, and furnish to the Servicer a power of attorney in the form of
Exhibit D hereto and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder and
furnished to the Trustee by the Servicer, and the Trustee shall not be liable
for the actions of the Servicer under such powers of attorney and shall be
indemnified by the Servicer for any cost, liability or expense incurred by the
Trustee in connection with the Servicer's use or misuse of any such power of
attorney.

                  In accordance with Accepted Servicing Practices, the Servicer
shall make or cause to be made Servicing Advances as necessary for the purpose
of effecting the payment of taxes and assessments on the Mortgaged Properties,
which Servicing Advances shall be reimbursable in the first instance from
related collections from the related Mortgagors pursuant to Section 3.07, and
further as provided in Section 3.09; provided, however, the Servicer shall only
make such Servicing Advance if the related Mortgagor has not made such payment
and if the failure to make such Servicing Advance would result in the loss of
the related Mortgaged Property due to a tax sale or foreclosure as result of a
tax lien. Any cost incurred by the Servicer in effecting the payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating the Stated Principal Balance of such Mortgage Loan or distributions
to Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
The parties to this Agreement acknowledge that Servicing Advances shall be
reimbursable pursuant to Section 3.06 of this Agreement, and agree that no
Servicing Advance shall be rejected or disallowed by any party unless it has
been shown that such Servicing Advance was not made in accordance with the terms
of this Agreement.

                  Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
and the Servicer shall not permit any modification with respect to any related
Mortgage Loan that would change the Mortgage Rate, reduce or increase the
principal balance (except for reductions resulting from actual payments of
principal) or change the final maturity date on such related Mortgage Loan
(unless, as provided in Section 3.06, the related Mortgagor is in default with
respect to the related Mortgage Loan or

                                       70
<PAGE>

such default is, in the judgment of the Servicer, reasonably foreseeable) or any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC created hereunder to fail
to qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions.

                  In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to arbitrate
disputes (at the option of the Trustee, on behalf of the Trust), the Trustee
hereby authorizes the Servicer to waive the Trustee's right or option to
arbitrate disputes and to send written notice of such waiver to the Mortgagor,
although the Mortgagor may still require arbitration at its option.

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

                  The Servicer may arrange for the subservicing of any Mortgage
Loan by a Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that
such sub-servicing arrangement and the terms of the related Sub-Servicing
Agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Each
Sub-Servicer shall be (i) authorized to transact business in the state or states
where the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the Sub-Servicer to perform its
obligations hereunder and under the Sub-Servicing Agreement and (ii) a Freddie
Mac or Fannie Mae approved mortgage servicer. Notwithstanding the provisions of
any Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer or a Sub-Servicer or reference
to actions taken through the Servicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee and the Certificateholders
for the servicing and administration of the Mortgage Loans in accordance with
the provisions of this Agreement without diminution of such obligation or
liability by virtue of such Sub-Servicing Agreements or arrangements or by
virtue of indemnification from the Sub-Servicer and to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. Every Sub-Servicing Agreement entered into by
the Servicer shall contain a provision giving the successor Servicer the option
to terminate such agreement in the event a successor Servicer is appointed. All
actions of each Sub-Servicer performed pursuant to the related Sub-Servicing
Agreement shall be performed as an agent of the Servicer with the same force and
effect as if performed directly by the Servicer.

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

                  SECTION 3.03. Successor Sub-Servicers.

                  Any Sub-Servicing Agreement shall provide that the Servicer
shall be entitled to terminate any Sub-Servicing Agreement and to either itself
directly service the related Mortgage Loans or enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02. Any
Sub-Servicing Agreement shall include the provision that such

                                       71
<PAGE>

agreement may be immediately terminated by any successor to the Servicer (which
may be the Trustee or the Master Servicer) without fee, in accordance with the
terms of this Agreement, in the event that the Servicer (or any successor to the
Servicer) shall, for any reason, no longer be the Servicer of the Mortgage Loans
(including termination due to a Servicer Event of Default).

                  SECTION 3.04. No Contractual Relationship Between
Sub-Servicer, Trustee or the Certificateholders.

                  Any Sub-Servicing Agreement and any other transactions or
services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed
to be between the Sub-Servicer and the Servicer alone and the Master Servicer,
Trustee and the Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to any
Sub-Servicer except as set forth in Section 3.05.

                  SECTION 3.05. Assumption or Termination of Sub-Servicing
Agreement by Successor Servicer.

                  In connection with the assumption of the responsibilities,
duties and liabilities and of the authority, power and rights of the Servicer
hereunder by a successor Servicer (which may be the Trustee or the Master
Servicer) pursuant to Section 8.02, it is understood and agreed that the
Servicer's rights and obligations under any Sub-Servicing Agreement then in
force between the Servicer and a Sub-Servicer shall be assumed simultaneously by
such successor Servicer without act or deed on the part of such successor
Servicer; provided, however, that any successor Servicer may terminate the
Sub-Servicer.

                  The Servicer shall, upon the reasonable request of the Master
Servicer, but at the expense of the Servicer, deliver to the assuming party
documents and records relating to each Sub-Servicing Agreement and an accounting
of amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of the Sub-Servicing Agreements to the
assuming party.

                  The Servicing Fee payable to any such successor Servicer shall
be payable from payments received on the Mortgage Loans in the amount and in the
manner set forth in this Agreement.

                  SECTION 3.06. Collection of Certain Mortgage Loan Payments.

                  The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
Accepted Servicing Practices, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Consistent with the foregoing, the Servicer may in its
discretion (i) waive any late payment charge or, if applicable, penalty interest
or (ii) extend the due dates for the Monthly Payments due on a Mortgage Note for
a period of not greater than 180 days; provided that any extension pursuant to
this clause shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or, in the judgment of the Servicer,
such default is reasonably foreseeable, the Servicer, consistent with Accepted
Servicing Practices may waive, modify or vary any term of such Mortgage Loan
(including modifications that change the

                                       72
<PAGE>

Mortgage Rate, forgive the payment of principal or interest or extend the final
maturity date of such Mortgage Loan), accept payment from the related Mortgagor
of an amount less than the Stated Principal Balance in final satisfaction of
such Mortgage Loan, or consent to the postponement of strict compliance with any
such term or otherwise grant indulgence to any Mortgagor if in the Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders or the Certificate
Insurer (taking into account any estimated Realized Loss that might result
absent such action).

                  SECTION 3.07. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.

                  To the extent the terms of a Mortgage provide for Escrow
Payments, the Servicer shall establish and maintain one or more accounts (the
"Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
fire, flood, and hazard insurance premiums, and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Servicer shall deposit in the Servicing
Accounts on a daily basis and in no event later than the second Business Day
after receipt, and retain therein, all Escrow Payments collected on account of
the Mortgage Loans, for the purpose of effecting the timely payment of any such
items as required under the terms of this Agreement. Withdrawals of amounts from
a Servicing Account may be made only to (i) effect timely payment of taxes,
assessments, fire, flood, and hazard insurance premiums, and comparable items;
(ii) reimburse itself out of related collections for any Servicing Advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.11 (with respect to fire, flood and hazard insurance); (iii) refund to
Mortgagors any sums as may be determined to be overages; (iv) pay interest, if
required and as described below, to Mortgagors on balances in the Servicing
Account; or (v) clear and terminate the Servicing Account at the termination of
the Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Agreement in accordance with Article X. As part of its servicing
duties, the Servicer shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. Notwithstanding the
foregoing, the Servicer shall not be obligated to collect Escrow Payments if the
related Mortgage Loan does not require such payments but the Servicer shall
nevertheless be obligated to make Servicing Advances as provided in Section 3.01
and Section 3.11. In the event the Servicer shall deposit in the Servicing
Accounts any amount not required to be deposited therein, it may at any time
withdraw such amount from the Servicing Accounts, any provision to the contrary
notwithstanding.

                  To the extent that a Mortgage does not provide for Escrow
Payments, the Servicer (i) shall determine whether any such payments are made by
the Mortgagor in a manner and at a time that is necessary to avoid the loss of
the Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien and (ii) shall ensure that all insurance required to be maintained on the
Mortgaged Property pursuant to this Agreement is maintained. If any such payment
has not been made and the Servicer receives notice of a tax lien with respect to
the Mortgage Loan being imposed, the Servicer shall, promptly and to the extent
required to avoid loss of the Mortgaged Property, advance or cause to be
advanced funds necessary to discharge such lien on the Mortgaged Property unless
the Servicer determines the advance to be nonrecoverable. The Servicer assumes
full responsibility for the payment of all such bills and

                                       73
<PAGE>

shall effect payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make Servicing Advances to effect such payments subject to its
determination of recoverability.

                  SECTION 3.08. Collection Account and Distribution Account.

                  (a) On behalf of the Trust Fund, the Servicer shall establish
and maintain one or more "Collection Accounts", held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, the
Servicer shall deposit or cause to be deposited in the Collection Account on a
daily basis and in no event later than two Business Days after receipt, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it on or subsequent to the Cut-off Date other
than amounts attributable to a Due Date on or prior to the Cut-off Date:

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

                           (ii) all payments on account of interest (net of the
         related Servicing Fee and any Prepayment Interest Excess) on each
         Mortgage Loan;

                           (iii) all Insurance Proceeds and Liquidation Proceeds
         (other than proceeds collected in respect of any particular REO
         Property) and all Subsequent Recoveries; (iv) any amounts required to
         be deposited by the Servicer pursuant to Section 3.10 in connection
         with any losses realized on Permitted Investments with respect to funds
         held in the Collection Account;

                           (v) any amounts required to be deposited by the
         Servicer pursuant to the second paragraph of Section 3.11(a) in respect
         of any blanket policy deductibles;

                           (vi) any Purchase Price or Substitution Shortfall
         Amount delivered to the Servicer and all proceeds (net of amounts
         payable or reimbursable to the Servicer, the Master Servicer, the
         Trustee, the Custodian or the Securities Administrator) of Mortgage
         Loans purchased in accordance with Section 2.03, Section 3.13 or
         Section 10.01; and

                           (vii) any Prepayment Charges collected by the
         Servicer in connection with the Principal Prepayment of any of the
         Mortgage Loans or amounts required to be deposited by the Servicer in
         connection with a breach of its obligations under Section 2.05.

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

                                       74
<PAGE>

                  (b) On behalf of the Trust Fund, the Securities Administrator
shall establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the Trustee, the Trust
Fund and the Certificateholders. On behalf of the Trust Fund, the Servicer shall
deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account on or before 12:00 noon New York time on the
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the Collection Account and the
amount of all Prepayment Charges collected by the Servicer in connection with
the Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advance
Financing Person pursuant to Section 3.25. If the balance on deposit in the
Collection Account exceeds $100,000 as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Servicer
shall, on or before 5:00 p.m. New York time on such Business Day, withdraw from
the Collection Account any and all amounts payable or reimbursable to the
Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator or the Seller pursuant to Section 3.09 and shall pay such amounts
to the Persons entitled thereto.

                  With respect to any remittance received by the Securities
Administrator on or after the first Business Day following the Business Day on
which such payment was due, the Securities Administrator shall send written
notice thereof to the Servicer. The Servicer shall pay to the Securities
Administrator interest on any such late payment by the Servicer at an annual
rate equal to Prime Rate (as defined in The Wall Street Journal) plus one
percentage point, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be paid by the Servicer to the Securities
Administrator on the date such late payment is made and shall cover the period
commencing with the day following such first Business Day and ending with the
Business Day on which such payment is made, both inclusive. The payment by the
Servicer of any such interest, or the failure of the Securities Administrator to
notify the Servicer of such interest, shall not be deemed an extension of time
for payment or a waiver of any Event of Default by the Servicer.

                  (c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.10. The Servicer shall give notice to the
Trustee, the Securities Administrator and the Master Servicer of the location of
the Collection Account maintained by it when established and prior to any change
thereof. The Securities Administrator shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and prior
to any change thereof.

                  (d) Funds held in the Collection Account at any time may be
delivered by the Servicer in immediately available funds to the Securities
Administrator for deposit in the Distribution Account. In the event the Servicer
shall deliver to the Securities Administrator for deposit in the Distribution
Account any amount not required to be deposited therein, it may at any time
request that the Securities Administrator withdraw such amount from the
Distribution Account and remit to it any such amount, any provision herein to
the contrary notwithstanding. In no event shall the Securities Administrator
incur liability as a result of withdrawals from the Distribution Account at the
direction of the Servicer in accordance with the immediately

                                       75
<PAGE>

preceding sentence. In addition, the Servicer shall deliver to the Securities
Administrator no later than the Servicer Remittance Date the amounts set forth
in clauses (i) through (iv) below:

                           (i) any P&I Advances, as required pursuant to Section
         5.03;

                           (ii) any amounts required to be deposited pursuant to
         Section 3.21(d) or 3.21(f) in connection with any REO Property;

                           (iii) any amounts to be paid in connection with a
         purchase of Mortgage Loans and REO Properties pursuant to Section
         10.01; and

                           (iv) any amounts required to be deposited pursuant to
         Section 3.22 in connection with any Prepayment Interest Shortfalls.

                  SECTION 3.09. Withdrawals from the Collection Account and
Distribution Account.

                  (a) The Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the following purposes or as described in
Section 5.03:

                           (i) to remit to the Securities Administrator for
         deposit in the Distribution Account the amounts required to be so
         remitted pursuant to Section 3.08(b) or permitted to be so remitted
         pursuant to the first sentence of Section 3.08(d);

                           (ii) subject to Section 3.13(d), to reimburse the
         Servicer (including any successor Servicer) for P&I Advances made by
         it, but only to the extent of amounts received which represent Late
         Collections (net of the related Servicing Fees) of Monthly Payments on
         Mortgage Loans with respect to which such P&I Advances were made in
         accordance with the provisions of Section 5.03;

                           (iii) subject to Section 3.13(d), to pay the Servicer
         any unpaid Servicing Fees and reimburse the Servicer any unreimbursed
         Servicing Advances with respect to each Mortgage Loan, but only to the
         extent of any Liquidation Proceeds and Insurance Proceeds received with
         respect to such Mortgage Loan;

                           (iv) to pay to the Servicer as servicing compensation
         (in addition to the Servicing Fee) on the Servicer Remittance Date any
         interest or investment income earned on funds deposited in the
         Collection Account;

                           (v) to pay to the Servicer or the Seller, as the case
         may be, with respect to each Mortgage Loan that has previously been
         purchased or replaced pursuant to Section 2.03 or Section 3.13(c) all
         amounts received thereon not included in the Purchase Price or the
         Substitution Shortfall Amount;

                           (vi) to reimburse the Servicer (including any
         successor Servicer) for

                                       (A) any P&I Advance or Servicing Advance
                                       previously made by it which the Servicer
                                       has determined to be a Nonrecoverable

                                       76
<PAGE>

                                       P&I Advance or a Nonrecoverable Servicing
                                       Advance in accordance with the provisions
                                       of Section 5.03; or

                                       (B) any unpaid Servicing Fees to the
                                       extent not recoverable from Liquidation
                                       Proceeds, Insurance Proceeds or other
                                       amounts received with respect to the
                                       related Mortgage Loan under Section
                                       3.06(a)(iii);

                           (vii) to reimburse the Servicer or the Depositor for
         expenses incurred by or reimbursable to the Servicer or the Depositor,
         as the case may be, pursuant to Section 3.01 or Section 7.03;

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

                           (ix) to pay, or to reimburse the Servicer for
         advances in respect of, expenses incurred in connection with any
         Mortgage Loan pursuant to Section 3.13(b);

                           (x) to pay to itself any Prepayment Interest Excess
         on the Mortgage Loans to the extent not retained pursuant to Section
         3.08(a)(ii)); and

                           (xi) to clear and terminate the Collection Account
         pursuant to Section 10.01.

                  The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (v), (vi), (vii), (viii), (ix) and (x)
above.

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

                           (i) to make distributions to Certificateholders in
         accordance with Section 5.01;

                           (ii) to pay to itself, the Custodian and the Master
         Servicer amounts to which it is entitled pursuant to Section 9.05 or
         any other provision of this Agreement and any Extraordinary Trust Fund
         Expenses;

                           (iii) to reimburse itself or the Master Servicer
         pursuant to Section 8.02;

                           (iv) to pay to an Advance Financing Person
         reimbursements for P&I Advances and/or Servicing Advances pursuant to
         Section 3.25;

                                       77
<PAGE>

                           (v) to pay any amounts in respect of taxes pursuant
         to Section 11.01(g)(v);

                           (vi) to pay the Master Servicing Fee to the Master
         Servicer;

                           (vii) to pay the Credit Risk Management Fee to the
         Credit Risk Manager; and

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

                  SECTION 3.10. Investment of Funds in the Investment Accounts.

                  (a) The Servicer may direct, by means of written directions
(which may be standing directions), any depository institution maintaining the
Collection Account to invest the funds in such Collection Account (for purposes
of this Section 3.10, an "Investment Account") in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, (i) no later than the Business Day immediately preceding the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if a Person other than the Securities Administrator is the obligor
thereon, and (ii) no later than the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if the Securities
Administrator is the obligor on such Permitted Investment. Amounts in the
Distribution Account may be invested in Permitted Investments as directed in
writing by the Master Servicer and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Securities Administrator is the obligor thereon, and (ii)
no later than the date on which such funds are required to be withdrawn from
such account pursuant to this Agreement, if the Securities Administrator is the
obligor thereon. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds shall be made in the name of
the Trustee (in its capacity as such) or in the name of a nominee of the
Trustee. The Securities Administrator shall be entitled to sole possession over
each such investment in the Distribution Account and, subject to subsection (b)
below, the income thereon, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Securities Administrator
or its agent, together with any document of transfer necessary to transfer title
to such investment to the Trustee or its nominee. In the event amounts on
deposit in the Collection Account are at any time invested in a Permitted
Investment payable on demand, the party with investment discretion over such
Investment Account shall:

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

                  (y) demand payment of all amounts due thereunder promptly upon
                  receipt by such party of written notice from the Servicer that
                  such Permitted Investment would not constitute a Permitted
                  Investment in respect of funds thereafter on deposit in the
                  Investment Account.

                                       78
<PAGE>

                  (b) All income and gain realized from the investment of funds
deposited in the Collection Account, shall be for the benefit of the Servicer
and shall be subject to its withdrawal in accordance with Section 3.09. The
Servicer shall deposit in the Collection Account the amount of any loss incurred
in respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss. All earnings and gain realized from
the investment of funds deposited in the Distribution Account shall be for the
benefit of the Master Servicer. The Master Servicer shall remit from its own
funds for deposit into the Distribution Account the amount of any loss incurred
on Permitted Investments in the Distribution Account.

                  (c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 9.01 and Section
9.02(a)(v), shall, at the written direction of the Servicer, take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.

                  (d) The Trustee, the Master Servicer or their respective
Affiliates are permitted to receive additional compensation that could be deemed
to be in the Trustee's or the Master Servicer's economic self-interest for (i)
serving as investment adviser, administrator, shareholder servicing agent,
custodian or sub-custodian with respect to certain of the Permitted Investments,
(ii) using Affiliates to effect transactions in certain Permitted Investments
and (iii) effecting transactions in certain Permitted Investments. Such
compensation shall not be considered an amount that is reimbursable or payable
to the Trustee or the Master Servicer pursuant to Section 3.09 or 3.10 or
otherwise payable in respect of Extraordinary Trust Fund Expenses. Such
additional compensation shall not be an expense of the Trust Fund.

                  SECTION 3.11. Maintenance of Hazard Insurance, Errors and
Omissions and Fidelity Coverage and Primary Mortgage Insurance.

                  (a) The terms of each Mortgage Note require the related
Mortgagor to maintain fire, flood and hazard insurance policies. To the extent
such policies are not maintained, the Servicer shall cause to be maintained for
each Mortgaged Property fire and hazard insurance with extended coverage as is
customary in the area where the Mortgaged Property is located in an amount which
is at least equal to the lesser of the current principal balance of such
Mortgage Loan and the amount necessary to compensate fully for any damage or
loss to the improvements which are a part of such property on a replacement cost
basis, in each case in an amount not less than such amount as is necessary to
avoid the application of any coinsurance clause contained in the related hazard
insurance policy. The Servicer shall also cause to be maintained fire and hazard
insurance on each REO Property with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of (i) the maximum insurable value of the improvements which
are a part of such property and (ii) the outstanding principal balance of the
related Mortgage Loan at the time it became an REO Property. The Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to be
collected by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with Accepted
Servicing Practices, subject to the terms and conditions of the related Mortgage
and Mortgage Note) shall be deposited in the Collection

                                       79
<PAGE>

Account, subject to withdrawal pursuant to Section 3.09, if received in respect
of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to
Section 3.21, if received in respect of an REO Property. Any cost incurred by
the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards, the
Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid principal balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).

                  In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of B:VI or better
in Best's Key Rating Guide or otherwise acceptable to Fannie Mae or Freddie Mac
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations to cause fire and
hazard insurance to be maintained on the Mortgaged Properties, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property or REO Property a policy complying with the
first two sentences of this Section 3.11, and there shall have been one or more
losses which would have been covered by such policy, deposit to the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare
and present, on behalf of itself, the Trustee, the Trust Fund, the
Certificateholders and the Certificate Insurer, claims under any such blanket
policy in a timely fashion in accordance with the terms of such policy.

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

                  (c) The Servicer shall not take any action that would result
in noncoverage under any applicable primary mortgage insurance policy of any
loss which, but for the actions of the Servicer would have been covered
thereunder. The Servicer shall use its best efforts to keep

                                       80
<PAGE>

in force and effect any applicable primary mortgage insurance policy and, to the
extent that the related Mortgage Loan requires the Mortgagor to maintain such
insurance, any other primary mortgage insurance applicable to any Mortgage Loan.
Except as required by applicable law or the related Mortgage Loan Documents, the
Servicer shall not cancel or refuse to renew any such primary mortgage insurance
policy that is in effect at the date of the initial issuance of the related
Mortgage Note and is required to be kept in force hereunder.

                  The Servicer agrees to present on behalf of the Trustee and
the Certificateholders claims to the applicable insurer under any primary
mortgage insurance policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any primary mortgage insurance
policies respecting defaulted Mortgage Loans. Pursuant to Section 3.08, any
amounts collected by the Servicer under any primary mortgage insurance policies
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.09. Notwithstanding any provision to the contrary, the Servicer shall
not have any responsibility with respect to a primary mortgage insurance policy
unless the Servicer has been made aware of such policy, as reflected on the
Mortgage Loan Schedule or otherwise and have been provided with adequate
information to administer such policy.

                  SECTION 3.12. Enforcement of Due-on-Sale Clauses; Assumption
Agreements

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

                                       81
<PAGE>

such substitution or assumption agreement has been completed by forwarding to
the Trustee the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.12, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.

                  SECTION 3.13. Realization Upon Defaulted Mortgage Loans.

                  (a) The Servicer shall use its best efforts, consistent with
Accepted Servicing Practices, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.06. The Servicer shall
be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Servicer as contemplated in Sections 3.09 and 3.21.
The foregoing is subject to the provision that, in any case in which a Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Servicer shall
not be required to expend its own funds toward the restoration of such property
unless it shall determine in its discretion that such restoration will increase
the proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.

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

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

                  (2) there are no circumstances present at such Mortgaged
                  Property relating to the use, management or disposal of any
                  hazardous substances, hazardous

                                       82
<PAGE>

                  materials, hazardous wastes or petroleum-based materials for
                  which investigation, testing, monitoring, containment,
                  clean-up or remediation could be required under any federal,
                  state or local law or regulation, or that if any such
                  materials are present for which such action could be required,
                  that it would be in the best economic interest of the Trust
                  Fund to take such actions with respect to the affected
                  Mortgaged Property.

                  The cost of the environmental audit report contemplated by
this Section 3.13 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.09(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund. The cost of any such compliance, containment,
cleanup or remediation shall be advanced by the Servicer, subject to the
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Sections 3.09(a)(iii) or 3.09(a)(ix), such right of reimbursement
being prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.

                  (c) The Servicer shall have the right to purchase from REMIC I
any defaulted Mortgage Loan that is 90 days or more delinquent, which the
Servicer determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee, in form and substance satisfactory to the Servicer and the Trustee
prior to purchase), at a price equal to the Purchase Price. The Purchase Price
for any Mortgage Loan purchased hereunder shall be deposited in the Collection
Account, and the Trustee, upon receipt of written certification from the
Servicer of such deposit, shall release or cause to be released to the Servicer
the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Servicer shall furnish and as shall be
necessary to vest in the Servicer title to any Mortgage Loan released pursuant
hereto.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed Servicing Advances and P&I Advances,
pursuant to Section 3.09(a)(ii) or (a)(iii); second, to accrued and unpaid
interest on the Mortgage Loan, to the date of the Final Recovery Determination,
or to the Due Date prior to the Distribution Date on which such amounts are to
be distributed if not in connection with a Final Recovery Determination; and
third, as a recovery of principal of the Mortgage Loan. If the amount of the
recovery so allocated to interest is less than the full amount of accrued and
unpaid interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Servicer as follows: first, to unpaid Servicing Fees; and
second, to the balance of the interest then

                                       83
<PAGE>

due and owing. The portion of the recovery so allocated to unpaid Servicing Fees
shall be reimbursed to the Servicer pursuant to Section 3.09(a)(iii). The
portion of the recovery allocated to interest (net of unpaid Servicing Fees) and
the portion of the recovery allocated to principal of the Mortgage Loan shall be
applied as follows: first, to reimburse the Servicer for any related
unreimbursed Servicing or P&I Advances in accordance with Section 3.09(a)(ii)
and any other amounts reimbursable to the Servicer pursuant to Section 3.09, and
second, as part of the amounts to be transferred to the Distribution Account in
accordance with Section 3.08(b).

                  SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files.

                  (a) Upon becoming aware of the payment in full of any Mortgage
Loan, or the receipt by the Servicer of a notification that payment in full has
been escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will promptly
furnish to the Custodian, on behalf of the Trustee, two copies of a request for
release substantially in the form attached to the Custodial Agreement signed by
a Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Collection Account have been or will be so deposited) and shall request that the
Custodian, on behalf of the Trustee, deliver to the Servicer the related
Mortgage File. Upon receipt of such certification and request, the Custodian, on
behalf of the Trustee, shall within five (5) Business Days release the related
Mortgage File to the Servicer and the Trustee and Custodian shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, the Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction or
assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Collection Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of the Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a request for release signed by a Servicing Officer
substantially in the form attached to the Custodial Agreement (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release within five (5) Business Days the
related Mortgage File held in its possession or control to the Servicer. Such
trust receipt shall obligate the Servicer to return the Mortgage File to the
Custodian on behalf of 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 Mortgage File shall be released by the Custodian, on behalf of
the Trustee, to the Servicer.

                  Notwithstanding the foregoing, in connection with a Principal
Prepayment in full of any Mortgage Loan, the Master Servicer may request release
of the related Mortgage File

                                       84
<PAGE>

from the Custodian, in accordance with the provisions of the Custodial
Agreement, in the event the Servicer fails to do so.

                  Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer, any court pleadings, requests for
trustee's sale or other documents prepared and delivered to the Trustee and
reasonably acceptable to it and necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale. So long as no Servicer Event of Default shall have occurred and
be continuing, the Servicer shall have the right to execute any and all such
court pleadings, requests and other documents as attorney-in-fact for, and on
behalf of the Trustee.

                  SECTION 3.15. Servicing Compensation.

                  As compensation for the activities of the Servicer, hereunder,
the Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.22. In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of Insurance Proceeds or
Liquidation Proceeds to the extent permitted by Section 3.09(a)(iii) and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.21. The right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement to the
extent permitted herein.

                  Additional servicing compensation in the form of assumption
fees, late payment charges and other miscellaneous fees (other than Prepayment
Charges) shall be retained by the Servicer only to the extent such fees or
charges are received by the Servicer. The Servicer shall also be entitled
pursuant to Section 3.09(a)(iv) to withdraw from the Collection Account and
pursuant to Section 3.21(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.10. In addition, the Servicer shall be entitled to retain
or withdraw from the Collection Account, pursuant to Section 3.09(a)(x), any
Prepayment Interest Excess as additional servicing compensation. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided herein.

                  SECTION 3.16. Collection Account Statements.

                  Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Master Servicer, the Securities Administrator, the
Trustee and the Depositor a statement prepared by the institution at which the
Collection Account is maintained setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals

                                       85
<PAGE>

from the Collection Account of each category of deposit specified in Section
3.08(a) and each category of withdrawal specified in Section 3.09. Copies of
such statement shall be provided by the Securities Administrator to any
Certificateholder and to any Person identified to the Securities Administrator
as a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Servicer to the
Securities Administrator.

                  SECTION 3.17. Statement as to Compliance.

                  Not later than March 15th of each calendar year commencing in
2005, the Servicer shall deliver to the Trustee, the Master Servicer and the
Depositor an Officers' Certificate in a form acceptable for filing with the
Securities and Exchange Commission as an exhibit to Form 8-K or other required
form (upon which the Master Servicer can conclusively rely in connection with
its obligations under Section 5.06) stating, as to each signatory thereof, that
(i) a review of the activities of the Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. Copies of any such statement shall be provided by the
Trustee to the Certificate Insurer and any Certificateholder, upon request at
the expense of the requesting party, provided such statement is delivered by the
Servicer to the Trustee.

                  SECTION 3.18. Independent Public Accountants' Servicing
Report.

                  Not later than March 15th of each calendar year commencing in
2005, the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer a report in
a form acceptable for filing with the Securities and Exchange Commission as an
exhibit to Form 8-K or other required form stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Servicer which includes an assertion that the Servicer has complied with certain
minimum residential mortgage loan servicing standards, identified in the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year and (ii) on the
basis of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, such
representation is fairly stated and such firm has determined that the Servicer
has complied in all material respects, subject to such exceptions and other
qualifications that may be appropriate. Immediately upon receipt of such report,
the Servicer shall furnish a copy of such report to the Master Servicer, the
Trustee and each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder and the Certificate Insurer upon request at
the Servicer's expense, provided that such statement is delivered by the
Servicer to the Trustee.

                  SECTION 3.19. Annual Certification.

                  (a) The Servicer shall deliver to the Master Servicer, on or
before March 15th of each calendar year beginning in 2005 (or, if any such day
is not a Business Day, the immediately preceding Business Day) or such
alternative date reasonably specified by the Master Servicer which shall occur
not later than 15 days prior to the date any Form 10-K is required to

                                       86
<PAGE>

be filed with the Commission in connection with the transactions contemplated by
this Agreement, a certification in the form attached hereto as Exhibit C. Such
certification shall be signed by the senior officer in charge of servicing of
the Servicer. In addition, the Servicer shall provide such other information
with respect to the Mortgage Loans and the servicing and administration thereof
within the control of the Servicer which shall be required to enable the Master
Servicer to comply with the reporting requirements of the Securities and
Exchange Act of 1934, as amended, pursuant to Section 5.06 hereof.

                  (b) The Servicer shall indemnify and hold harmless the Master
Servicer, the Securities Administrator, the Trustee, the Depositor and their
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.19 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith. Such
indemnity shall survive the termination or resignation of the parties hereto or
the termination of this Agreement. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator, the Trustee and the Depositor, then the Servicer agrees that it
shall contribute to the amount paid or payable by the Master Servicer, the
Securities Administrator, the Trustee and the Depositor as a result of the
losses, claims, damages or liabilities of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor in such proportion as is
appropriate to reflect the relative fault of the Master Servicer, the Securities
Administrator, the Trustee and the Depositor on the one hand and the Servicer on
the other in connection with a breach of the Servicer's obligations under this
Section 3.19.

                  SECTION 3.20. Access to Certain Documentation.

                  The Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificate Owner,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Servicer designated by it. Nothing in this Section 3.20 shall limit the
obligation of the Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section. Nothing in this
Section 3.20 shall require the Servicer to collect, create, collate or otherwise
generate any information that it does not generate in its usual course of
business. The Servicer shall not be required to make copies of or ship documents
to any Person unless provisions have been made for the reimbursement of the
costs thereof.

                  SECTION 3.21. Title, Management and Disposition of REO
Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, on behalf of the Trust Fund
and for the benefit of the Certificateholders. The Servicer, on behalf of REMIC
I, shall either sell any REO Property by the close of the third calendar year
following the calendar year in which REMIC I acquires ownership of such REO
Property for purposes of Section 860(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace

                                       87
<PAGE>

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

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

                  (c) The Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Servicer manages and operates similar property owned by the
Servicer or any of its Affiliates, all on such terms and for such period as the
Servicer deems to be in the best interests of Certificateholders. In connection
therewith, the Servicer shall deposit, or cause to be deposited, on a daily
basis in the REO Account all revenues received by it with respect to an REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:

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

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

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

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

                                       88
<PAGE>

                  Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding the foregoing, the Servicer,
on behalf of the Trust Fund, shall not:

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

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

                           (iii) authorize or permit any construction on any REO
         Property, other than the completion of a building or other improvement
         thereon, and then only if more than ten percent of the construction of
         such building or other improvement was completed before default on the
         related Mortgage Loan became imminent, all within the meaning of
         Section 856(e)(4)(B) of the Code; or

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

unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Servicer and the Trustee, to the effect that such action will
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code at any time that it is held by
REMIC I, in which case the Servicer may take such actions as are specified in
such Opinion of Counsel.

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

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

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

                           (iii) none of the provisions of this Section 3.21(c)
         relating to any such contract or to actions taken through any such
         Independent Contractor shall be deemed to relieve the Servicer of any
         of its duties and obligations to the Trustee on behalf of the Trust
         Fund and for the benefit of the Certificateholders with respect to the
         operation and management of any such REO Property; and

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

                                       89
<PAGE>

                  The Servicer shall be entitled to enter into any agreement
with any Independent Contractor performing services for it related to its duties
and obligations hereunder for indemnification of the Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Servicer shall be solely liable for all fees
owed by it to any such Independent Contractor, irrespective of whether the
Servicer's compensation pursuant to Section 3.15 is sufficient to pay such fees.
Any such agreement shall include a provision that such agreement may be
immediately terminated by the Trustee (as successor Servicer) or any other
successor Servicer (including the Master Servicer) without fee, in the event the
Servicer shall for any reason, no longer be the Servicer of the Mortgage Loans
(including termination due to a Servicer Event of Default).

                  (d) In addition to the withdrawals permitted under Section
3.21(c), the Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer
for unreimbursed Servicing Advances and Advances made in respect of such REO
Property or the related Mortgage Loan. On the Servicer Remittance Date, the
Servicer shall withdraw from each REO Account maintained by it and deposit into
the Distribution Account in accordance with Section 3.08(d)(ii), for
distribution on the related Distribution Date in accordance with Section 5.01,
the income from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.21(c) or this Section
3.21(d).

                  (e) Subject to the time constraints set forth in Section
3.21(a), each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer shall deem necessary or
advisable, as shall be normal and usual in accordance with Accepted Servicing
Practices.

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Servicer as provided above, shall
be deposited in the Distribution Account in accordance with Section 3.08(d)(ii)
on the Servicer Remittance Date in the month following the receipt thereof for
distribution on the related Distribution Date in accordance with Section 5.01.
Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).

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

                  SECTION 3.22. Obligations of the Servicer in Respect of
Prepayment Interest Shortfalls; Relief Act Interest Shortfalls.

                  The Servicer shall deliver to the Securities Administrator for
deposit into the Distribution Account on or before 12:00 noon New York time on
the Servicer Remittance Date from its own funds an amount equal to the lesser of
(i) the aggregate amount of the Prepayment

                                       90
<PAGE>

Interest Shortfalls attributable to prepayments in full on the Mortgage Loans
for the related Distribution Date resulting solely from voluntary Principal
Prepayments received by the Servicer during the related Prepayment Period and
(ii) the aggregate amount of the related Servicing Fees payable to the Servicer
on such Distribution Date with respect to the Mortgage Loans. The Servicer shall
not have the right to reimbursement for any amounts remitted to the Securities
Administrator in respect of this Section 3.22. The Servicer shall not be
obligated to pay the amounts set forth in this Section 3.22 with respect to
shortfalls resulting from the application of the Relief Act.

                  SECTION 3.23. Obligations of the Servicer in Respect of
Mortgage Rates and Monthly Payments.

                  In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of notice thereof, immediately shall deliver to the Securities
Administrator for deposit in the Distribution Account from its own funds the
amount of any such shortfall and shall indemnify and hold harmless the Trust
Fund, the Trustee, the Securities Administrator and the Master Servicer, the
Depositor and any successor Servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.23 shall not limit the ability of
the Servicer to seek recovery of any such amounts from the related Mortgagor
under the terms of the related Mortgage Note and Mortgage, to the extent
permitted by applicable law.

                  SECTION 3.24. Reserve Fund.

                  (a) No later than the Closing Date, the Securities
Administrator shall establish and maintain a separate, segregated trust account
entitled, "Reserve Fund, Wells Fargo Bank, N.A., in trust for the registered
holders of ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE2, Asset
Backed Pass-Through Certificates." On the Closing Date, the Depositor will
deposit, or cause to be deposited, into the Reserve Fund $1,000. In addition,
the amount deposited in the Reserve Fund shall be increased by any payments
received by the Securities Administrator under the Group I Cap Contract and
deposited into Reserve Fund for the benefit of the Class A-1 Certificates,
Mezzanine Certificates and the Class B Certificates and under the Group II Cap
Contract and deposited in the Reserve Fund for the benefit of the Class A-2
Certificates, the Mezzanine Certificates and the Class B Certificates.

                  (b) On each Distribution Date, the Securities Administrator
shall deposit into the Reserve Fund the amounts described in Section
5.01(a)(7)(vi), rather than distributing such amounts to the Class CE
Certificateholders, and Section 5.01(a)(7)(vii). On each such Distribution Date,
the Securities Administrator shall hold all such amounts for the benefit of the
Holders of the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates and will distribute such amounts to the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates, in the
amounts and priorities set forth in Section 5.01(a). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Securities
Administrator shall deposit, into the Reserve Fund on behalf of the Class CE
Certificateholders, from amounts otherwise distributable to the Class CE
Certificateholders, an

                                       91
<PAGE>

amount such that when added to other amounts already on deposit in the Reserve
Fund, the aggregate amount on deposit therein is equal to $1,000.

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

                  (d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the Reserve Fund the amounts described above on each Distribution Date
rather than distributing such amounts to the Class CE Certificateholders. By
accepting a Class CE Certificate, each Class CE Certificateholder further agrees
that its agreement to such action by the Securities Administrator is given for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by such acceptance.

                  (e) At the direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Securities Administrator
shall direct any depository institution maintaining the Reserve Fund to invest
the funds in such account in one or more Permitted Investments bearing interest
or sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Securities Administrator or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Securities
Administrator or an Affiliate manages or advises such investment. All income and
gain earned upon such investment shall be deposited into the Reserve Fund. In no
event shall the Securities Administrator be liable for any investments made
pursuant to this clause (e). If the Holders of a majority in Percentage Interest
in the Class CE Certificates fail to provide investment instructions, funds on
deposit in the Reserve Fund shall be held uninvested by the Securities
Administrator without liability for interest or compensation.

                  (f) For federal tax return and information reporting, the
right of the Class A Certificateholders, the Mezzanine Certificateholders and
Class B Certificateholders to receive payments from the Reserve Fund in respect
of any Net WAC Rate Carryover Amount shall be assigned a value of $58,000 with
respect to Certificates covered by the Group I Cap Contract and $39,000 with
respect to Certificates covered by the Group II Cap Contract.

                  SECTION 3.25. Advance Facility.

                  (a) Notwithstanding anything to the contrary contained herein,
(i) the Servicer is hereby authorized to enter into an advance facility
("Advance Facility") but no more than two

                                       92
<PAGE>

Advance Facilities without the prior written consent of the Trustee, which
consent shall not be unreasonably withheld, under which (A) the Servicer sells,
assigns or pledges to an advancing person (an "Advance Financing Person") the
Servicer's rights under this Agreement to be reimbursed for any P&I Advances or
Servicing Advances and/or (B) an Advance Financing Person agrees to finance some
or all P&I Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement and (ii) the Servicer is hereby authorized to assign
its rights to the Servicing Fee (which rights shall terminate upon the
resignation, termination or removal of the Servicer pursuant to the terms of
this Agreement); it being understood that neither the Trust Fund nor any party
hereto shall have a right or claim (including without limitation any right of
offset) to any amounts for reimbursement of P&I Advances or Servicing Advances
so assigned or to the portion of the Servicing Fee so assigned. Subject to the
provisions of the first sentence of this Section 3.25(a), no consent of the
Depositor, Trustee, Master Servicer, Certificateholders or any other party is
required before the Servicer may enter into an Advance Facility, but the
Servicer shall provide notice to the Depositor, Master Servicer and the Trustee
of the existence of any such Advance Facility promptly upon the consummation
thereof stating (a) the identity of the Advance Financing Person and (b) the
identity of any Person ("Servicer's Assignee") who has the right to receive
amounts in reimbursement of previously unreimbursed P&I Advances or Servicing
Advances. Notwithstanding the existence of any Advance Facility under which an
advancing person agrees to finance P&I Advances and/or Servicing Advances on the
Servicer's behalf, the Servicer shall remain obligated pursuant to this
Agreement to make P&I Advances and Servicing Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility.

                  (b) Reimbursement amounts ("Advance Reimbursement Amounts")
shall consist solely of amounts in respect of P&I Advances and/or Servicing
Advances made with respect to the Mortgage Loans for which the Servicer would be
permitted to reimburse itself in accordance with this Agreement, assuming the
Servicer had made the related P&I Advance(s) and/or Servicing Advance(s).

                  (c) The Servicer shall maintain and provide to any successor
Servicer (with, upon request, a copy to the Trustee) a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any advancing person. The successor Servicer shall be entitled to
rely on any such information provided by the predecessor Servicer, and the
successor Servicer shall not be liable for any errors in such information.

                  (d) Reimbursement amounts distributed with respect to each
Mortgage Loan shall be allocated to outstanding unreimbursed P&I Advances or
Servicing Advances (as the case may be) made with respect to that Mortgage Loan
on a "first-in, first out" (FIFO) basis. The documentation establishing any
Advance Facility shall require the Servicer to provide to the related advancing
person or its designee loan-by-loan information with respect to each such
reimbursement amount distributed to such advancing person or Advance Facility
trustee on each Distribution Date, to enable the advancing person or Advance
Facility trustee to make the FIFO allocation of each such reimbursement amount
with respect to each Mortgage Loan. The Servicer shall remain entitled to be
reimbursed by the advancing person or Advance Facility trustee for all P&I
Advances and Servicing Advances funded by the Servicer to the extent the related
rights to be reimbursed therefor have not been sold, assigned or pledged to an
advancing person.

                                       93
<PAGE>

                  (e) Any amendment to this Section 3.25 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.25,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Depositor, and the Servicer without the consent
of any Certificateholder, notwithstanding anything to the contrary in this
Agreement, provided, that the Trustee has been provided an Opinion of Counsel
that such amendment is authorized hereunder and has no material adverse effect
on the Certificateholders or the Certificate Insurer, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund; provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the interests of
the Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency (instead of obtaining an Opinion of Counsel to such
effect) stating that the amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates; it being
understood and agreed that any such rating letter in and of itself will not
represent a determination as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating. Prior to entering into an Advance Facility, the Servicer shall notify
the lender under such facility in writing that: (a) the P&I Advances and/or
Servicing Advances financed by and/or pledged to the lender are obligations owed
to the Servicer on a non-recourse basis payable only from the cash flows and
proceeds received under this Agreement for reimbursement of P&I Advances and/or
Servicing Advances only to the extent provided herein, and neither the Master
Servicer, the Securities Administrator, the Trustee nor the Trust are otherwise
obligated or liable to repay any P&I Advances and/or Servicing Advances financed
by the lender; (b) the Servicer will be responsible for remitting to the lender
the applicable amounts collected by it as Servicing Fees and as reimbursement
for P&I Advances and/or Servicing Advances funded by the lender, as applicable,
subject to the restrictions and priorities created in this Agreement; and (c)
neither the Master Servicer, the Securities Administrator nor the Trustee shall
have any responsibility to calculate any amount payable under an Advance
Facility or to track or monitor the administration of the financing arrangement
between the Servicer and the lender or the payment of any amount under an
Advance Facility.

                  (f) The Servicer shall indemnify the Master Servicer, the
Securities Administrator, the Trustee and the Trust Fund for any cost, liability
or expense relating to the Advance Facility including, without limitation, a
claim, pending or threatened, by an Advance Financing Person.

                  SECTION 3.26. The Servicer Indemnification.

                  The Servicer agrees to indemnify the Certificate Insurer,
Trustee, Master Servicer and the Securities Administrator, from, and hold the
Trustee, Master Servicer and the Securities Administrator harmless against, any
loss, liability or expense (including reasonable attorney's fees and expenses)
incurred by any such Person by reason of the Servicer's willful misfeasance, bad
faith or gross negligence in the performance of its duties under this Agreement
or by reason of the Servicer's reckless disregard of its obligations and duties
under this Agreement. Such indemnity shall survive the termination or discharge
of this Agreement and the resignation or removal of the Certificate Insurer,
Servicer, the Trustee, the Master Servicer and the Securities Administrator. Any
payment hereunder made by the Servicer to any such Person shall be from the
Servicer's own funds, without reimbursement from REMIC I therefor.

                                       94
<PAGE>

                  SECTION 3.27. Certificate Insurer Access

                  Upon the occurrence of a Trigger Event, the Servicer shall
afford the Certificate Insurer access to its books and records concerning the
servicing of the Mortgage Loans, and shall make servicing officers available to
the Certificate Insurer to discuss the servicing of the Mortgage Loans, upon
reasonable prior notice to the Servicer, and during the Servicer's normal
business hours.

                                       95
<PAGE>

                                   ARTICLE IV

                       ADMINISTRATION AND MASTER SERVICING
                  OF THE MORTGAGE LOANS BY THE MASTER SERVICER

                  SECTION 4.01. Master Servicer.

                  The Master Servicer shall supervise, monitor and oversee the
obligation of the Servicer to service and administer the Mortgage Loans in
accordance with the terms of this Agreement and shall have full power and
authority to do any and all things which it may deem necessary or desirable in
connection with such master servicing and administration. In performing its
obligations hereunder, the Master Servicer shall act in a manner consistent with
Accepted Master Servicing Practices. Furthermore, the Master Servicer shall
oversee and consult with the Servicer as necessary from time-to-time to carry
out the Master Servicer's obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master Servicer
by the Servicer and shall cause the Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by the
Servicer under this Agreement. The Master Servicer shall independently and
separately monitor the Servicer's servicing activities with respect to each
related Mortgage Loan, reconcile the results of such monitoring with such
information provided in the previous sentence on a monthly basis and coordinate
corrective adjustments to the Servicer's and Master Servicer's records, and
based on such reconciled and corrected information, prepare the statements
specified in Section 5.03 and any other information and statements required to
be provided by the Master Servicer hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicer to the Distribution Account pursuant to the terms
hereof based on information provided to the Master Servicer by the Servicer.

                  The Trustee shall furnish the Servicer and the Master Servicer
with any limited powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Servicer and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Trustee
shall have no responsibility for any action of the Master Servicer or the
Servicer pursuant to any such limited power of attorney and shall be indemnified
by the Master Servicer or the Servicer, as applicable, for any cost, liability
or expense incurred by the Trustee in connection with such Person's misuse of
any such power of attorney.

                  The Trustee, the Custodian and the Securities Administrator
shall provide access to the records and documentation in possession of the
Trustee, the Custodian or the Securities Administrator regarding the related
Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee, the Custodian or the
Securities Administrator; provided, however, that, unless otherwise required by
law, none of the Trustee, the Custodian or the Securities Administrator shall be
required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor. The Trustee,
the Custodian and the Securities Administrator shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's, the
Custodian's or the Securities Administrator's actual costs.

                                       96
<PAGE>

                  The Trustee shall execute and deliver to the Servicer or the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Mortgage Loan
Document; (iii) obtain a deficiency judgment against the Mortgagor; or (iv)
enforce any other rights or remedies provided by the Mortgage Note or any other
Mortgage Loan Document or otherwise available at law or equity.

                  SECTION 4.02. REMIC-Related Covenants.

                  For as long as each REMIC shall exist, the Trustee and the
Securities Administrator shall act in accordance herewith to treat such REMIC as
a REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the Servicer or the Master Servicer to assure such
continuing treatment. In particular, the Trustee shall not (a) sell or permit
the sale of all or any portion of the Mortgage Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.03 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a Opinion of Counsel stating that
such contribution will not result in an Adverse REMIC Event as defined in
Section 11.01(f).

                  SECTION 4.03. Monitoring of Servicer.

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

                  (b) The Master Servicer, for the benefit of the Trustee and
the Certificateholders, shall enforce the obligations of the Servicer under this
Agreement and shall, in the event that the Servicer fails to perform its
obligations in accordance with this Agreement, subject to this Section and
Article VIII, cause the Trustee to terminate the rights and obligations of the
Servicer hereunder in accordance with the provisions of Article VIII. Such
enforcement, including, without limitation, the legal prosecution of claims and
the pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.

                                       97
<PAGE>

                  (c) The Master Servicer shall be entitled to be reimbursed by
the Servicer (or from amounts on deposit in the Distribution Account if the
Servicer is unable to fulfill its obligations hereunder) for all reasonable
out-of-pocket or third party costs associated with the transfer of servicing
from the predecessor Servicer (or if the predecessor Servicer is the Master
Servicer, from the Servicer immediately preceding the Master Servicer),
including without limitation, any reasonable out-of-pocket or third party costs
or expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Master Servicer to service the Mortgage Loans
properly and effectively, upon presentation of reasonable documentation of such
costs and expenses.

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

                  (e) If the Master Servicer acts as successor to the Servicer,
it will not assume liability for the representations and warranties of the
terminated Servicer.

                  SECTION 4.04. Fidelity Bond.

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

                  SECTION 4.05. Power to Act; Procedures.

                  The Master Servicer shall master service the Mortgage Loans
and shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit the Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause REMIC I or REMIC II to fail to qualify as a REMIC or
result in the imposition of a tax upon the Trust Fund (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) unless the Master Servicer has received an Opinion of Counsel (but not at
the expense of the Master Servicer) to the effect that the contemplated action
will not would cause REMIC I or REMIC II to fail to qualify as a REMIC or result
in the imposition of a tax upon REMIC I or

                                       98
<PAGE>

REMIC II, as the case may be. The Trustee shall furnish the Master Servicer,
upon written request from a Servicing Officer, with any powers of attorney
prepared and delivered to it and reasonably acceptable to it by empowering the
Master Servicer or the Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with this Agreement, and the Trustee shall
execute and deliver such other documents prepared and delivered to it and
reasonably acceptable to it, as the Master Servicer or the Servicer may request,
to enable the Master Servicer to master service and administer the Mortgage
Loans and carry out its duties hereunder, in each case in accordance with
Accepted Master Servicing Practices (and the Trustee shall have no liability for
misuse of any such powers of attorney by the Master Servicer or the Servicer and
shall be indemnified by the Master Servicer or the Servicer, as applicable, for
any cost, liability or expense incurred by the Trustee in connection with such
Person's use or misuse of any such power of attorney). If the Master Servicer or
the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.10. In the performance of its duties hereunder, the Master
Servicer shall be an independent contractor and shall not, except in those
instances where it is taking action in the name of the Trustee, be deemed to be
the agent of the Trustee.

                  SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements.

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

                  SECTION 4.07. Documents, Records and Funds in Possession of
Master Servicer To Be Held for Trustee.

                  (a) The Master Servicer shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee or Custodian. Any funds received by the Master Servicer
in respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be remitted to the Securities Administrator for deposit in
the Distribution Account. The Master Servicer shall, and, subject to Section
3.20, shall cause the Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable

                                       99
<PAGE>

request in writing and during normal business hours at the offices of the Master
Servicer designated by it. In fulfilling such a request the Master Servicer
shall not be responsible for determining the sufficiency of such information.

                  (b) All Mortgage Files and funds collected or held by, or
under the control of, the Master Servicer, in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be remitted to the Trustee for
deposit in the Distribution Account.

                  SECTION 4.08. Standard Hazard Insurance and Flood Insurance
Policies.

                  For each Mortgage Loan, the Master Servicer shall enforce the
obligation of the Servicer under this Agreement to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of this Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in Section 3.11 and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.

                  SECTION 4.09. Presentment of Claims and Collection of
Proceeds.

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

                  SECTION 4.10. Maintenance of Primary Mortgage Insurance
Policies.

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

                  (b) The Master Servicer agrees to cause the Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any primary mortgage insurance policies and, in this regard, to
take such reasonable action as shall be necessary to

                                      100
<PAGE>

permit recovery under any primary mortgage insurance policies respecting
defaulted Mortgage Loans.

                  SECTION 4.11. Trustee to Retain Possession of Certain
Insurance Policies and Documents.

                  The Trustee or the applicable Custodian, shall retain
possession and custody of the originals (to the extent available) of any primary
mortgage insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer and the
Servicer have otherwise fulfilled their respective obligations under this
Agreement the Trustee or the Custodian shall also retain possession and custody
of each Mortgage File in accordance with and subject to the terms and conditions
of this Agreement and the Custodial Agreement. The Master Servicer shall
promptly deliver or cause to be delivered to the Trustee or the Custodian, upon
the execution or receipt thereof the originals of any primary mortgage insurance
policies, any certificates of renewal, and such other documents or instruments
that constitute Mortgage Loan Documents that come into the possession of the
Master Servicer from time to time.

                  SECTION 4.12. Realization Upon Defaulted Mortgage Loans.

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

                  SECTION 4.13. Compensation for the Master Servicer.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Master Servicing Fee and
the income from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The Master Servicing Fee
payable to the Master Servicer in respect of any Distribution Date shall be
reduced in accordance with Section 4.18. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.

                  SECTION 4.14. REO Property.

                  (a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall cause the Servicer to sell, any
REO Property as expeditiously as possible and in accordance with the provisions
of this Agreement. Further, the Master Servicer shall cause the Servicer to sell
any REO Property prior to three years after the end of the calendar year of its
acquisition by REMIC I unless (i) the Trustee shall have been supplied by the
Servicer with an Opinion of Counsel to the effect that the holding by the Trust
Fund of such REO Property subsequent to such three-year period will not result
in the imposition of taxes on "prohibited transactions" of any REMIC hereunder
as defined in section 860F of the Code or cause any REMIC hereunder to

                                      101
<PAGE>

fail to qualify as a REMIC at any time that any Certificates are outstanding, in
which case the Trust Fund may continue to hold such Mortgaged Property (subject
to any conditions contained in such Opinion of Counsel) or (ii) the Servicer
shall have applied for, prior to the expiration of such three-year period, an
extension of such three-year period in the manner contemplated by Section
856(e)(3) of the Code, in which case the three-year period shall be extended by
the applicable extension period. The Master Servicer shall cause the Servicer to
protect and conserve, such REO Property in the manner and to the extent required
by this Agreement in accordance with the REMIC Provisions and in a manner that
does not result in a tax on "net income from foreclosure property" or cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code.

                  (b) The Master Servicer shall cause the Servicer to deposit
all funds collected and received in connection with the operation of any REO
Property in the REO Account.

                  SECTION 4.15. Annual Officer's Certificate as to Compliance.

                  (a) The Master Servicer shall deliver to the Trustee and the
Rating Agencies on or before March 15 of each year, commencing on March 15,
2005, an Officer's Certificate, certifying that with respect to the period
ending December 31 of the prior year: (i) such Servicing Officer has reviewed
the activities of such Master Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement, (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that the Master
Servicer has failed to perform any of its duties, responsibilities and
obligations under this Agreement in all material respects throughout such year,
or, if there has been a material default in the performance or fulfillment of
any such duties, responsibilities or obligations, specifying each such default
known to such Servicing Officer and the nature and status thereof.

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

                  SECTION 4.16. Annual Independent Accountant's Servicing
Report.

                  If the Master Servicer has, during the course of any calendar
year, directly serviced any of the Mortgage Loans, then the Master Servicer at
its expense shall cause a nationally recognized firm of independent certified
public accountants to furnish a statement to the Trustee, the Rating Agencies
and the Seller on or before March 15 of each year, commencing on March 15, 2005
to the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to this
Agreement and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages

                                      102
<PAGE>

serviced for Freddie Mac or the Uniform Single Attestation Program for Mortgage
Bankers, such firm is of the opinion that the Master Servicer's activities have
been conducted in compliance with this Agreement, or that such examination has
disclosed no material items of noncompliance except for (i) such exceptions as
such firm believes to be immaterial, (ii) such other exceptions as are set forth
in such statement and (iii) such exceptions that the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages Serviced by
Freddie Mac requires it to report. Copies of such statements shall be provided
to any Certificateholder upon request by the Master Servicer, or by the Trustee
at the expense of the Master Servicer if the Master Servicer shall fail to
provide such copies (unless (i) the Master Servicer shall have failed to provide
the Trustee with such statement or (ii) the Trustee shall be unaware of the
Master Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.

                  SECTION 4.17. UCC.

                  The Depositor agrees to file continuation statements for any
Uniform Commercial Code financing statements which the Seller has informed the
Depositor were filed on the Closing Date in connection with the Trust. The
Depositor shall file any financing statements or amendments thereto required by
any change in the Uniform Commercial Code.

                  SECTION 4.18. Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls.

                  In the event of any Prepayment Interest Shortfalls, the Master
Servicer shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the Servicer with respect to Prepayment Interest
Shortfalls attributable to Principal Prepayments in full on the Mortgage Loans
for the related Distribution Date, and not so paid by the Servicer and (ii) the
aggregate amount of the related Master Servicing Fees for such Distribution
Date, without reimbursement therefor.

                  SECTION 4.19. Prepayment Penalty Verification.

                  On or prior to each Servicer Remittance Date, the Servicer
shall provide in an electronic format acceptable to the Master Servicer and it
the data necessary for the Master Servicer to perform its verification duties
set forth in this Section 4.19. The Master Servicer or a third party reasonably
acceptable to the Master Servicer and the Depositor (the "Verification Agent")
will perform such verification duties and will use its best efforts to issue its
findings in a report (the "Verification Report") delivered to the Master
Servicer and the Depositor within ten (10) Business Days following the related
Distribution Date; provided, however, that if the Verification Agent is unable
to issue the Verification Report within ten (10) Business Days following the
Distribution Date, the Verification Agent may issue and deliver to the Master
Servicer and the Depositor the Verification Report upon the completion of its
verification duties. The Master Servicer shall forward the Verification Report
to the Servicer and shall notify the Servicer if the Master Servicer has
determined that the Servicer did not deliver the appropriate Prepayment Charge
to the Securities Administrator in accordance with this Agreement. Such written
notification from the Master Servicer shall include the loan number, prepayment
penalty code and prepayment penalty amount as calculated by the Master Servicer
or the Verification

                                      103
<PAGE>

Agent, as applicable, of each Mortgage Loan for which there is a discrepancy. If
the Servicer agrees with the verified amounts, the Servicer shall adjust the
immediately succeeding Servicer Report and the amount remitted to the Trustee
with respect to prepayments accordingly. If the Servicer disagrees with the
determination of the Master Servicer, the Servicer shall, within five (5)
Business Days of its receipt of the Verification Report, notify the Master
Servicer of such disagreement and provide the Master Servicer with detailed
information to support its position. The Servicer and the Master Servicer shall
cooperate to resolve any discrepancy on or prior to the immediately succeeding
Servicer Remittance Date, and the Servicer will indicate the effect of such
resolution on the related Servicer Report and shall adjust the amount remitted
with respect to prepayments on such Servicer Remittance Date accordingly.

                  During such time as the Servicer and the Master Servicer are
resolving discrepancies with respect to the Prepayment Charges, no payments in
respect of any disputed Prepayment Charges will be remitted to the Securities
Administrator for deposit in the Distribution Account and the Master Servicer
shall not be obligated to deposit such payments, unless otherwise required
pursuant to Section 8.01 hereof. In connection with such duties, the Master
Servicer shall be able to rely solely on the information provided to it by the
Servicer in accordance with this Section. The Master Servicer shall not be
responsible for verifying the accuracy of any of the information provided to it
by the Servicer.

                                      104
<PAGE>

                                   ARTICLE V

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 5.01. Distributions.

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

                           (i) to Holders of REMIC I Regular Interest I-LTAA,
         REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2A,
         REMIC I Regular Interest I-LTA2B, REMIC I Regular Interest I-LTA2C,
         REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
         I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
         Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I
         Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I
         Regular Interest I-LTZZ and REMIC I Regular Interest I-LTP, PRO RATA,
         in an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates. Amounts payable as
         Uncertificated Interest in respect of REMIC I Regular Interest I-LTZZ
         shall be reduced when the REMIC I Overcollateralization Amount is less
         than the REMIC I Required Overcollateralization Amount, by the lesser
         of (x) the amount of such difference and (y) the Maximum I-LTZZ
         Uncertificated Interest Deferral Amount and such amount will be payable
         to the Holders of REMIC I Regular Interest I-LTA1, REMIC I Regular
         Interest I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
         Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I Regular
         Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
         Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
         Interest I-LTM6, REMIC I Regular Interest I-LTB1 and REMIC I Regular
         Interest I-LTB2, in the same proportion as the Overcollateralization
         Increase Amount is allocated to the Corresponding Certificates and the
         Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be
         increased by such amount;

                           (ii) to Holders of REMIC I Regular Interest I-LT1A,
         REMIC I Regular Interest I-LT1B, REMIC I Regular Interest I-LT2A, REMIC
         I Regular Interest I-LT2B, and REMIC I Regular Interest I-LTXX, PRO
         RATA, in an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates;

                           (iii) to the Holders of REMIC I Regular Interests, in
         an amount equal to the remainder of the REMIC I Marker Allocation
         Percentage of the available funds for such Distribution Date after the
         distributions made pursuant to clause (i) above, allocated as follows:

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

                                      105
<PAGE>

                           (B) 2.00% of such remainder, first, to the Holders of
                  REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
                  I-LTA2A, REMIC I Regular Interest I-LTA2B, REMIC I Regular
                  Interest I-LTA2C, REMIC I Regular Interest I-LTM1, REMIC I
                  Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3,
                  REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
                  I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
                  Interest I-LTB1 and REMIC I Regular Interest I-LTB2, 1 % of
                  and in the same proportion as principal payments are allocated
                  to the Corresponding Certificates, until the Uncertificated
                  Balances of such REMIC I Regular Interests are reduced to zero
                  and second to the Holders of REMIC I Regular Interest I-LTZZ,
                  until the Uncertificated Balance of such REMIC I Regular
                  Interest is reduced to zero;

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

                           (D) any remaining amount to the Holders of the Class
                  R-I Interest, in respect of the Class R-I Interest;

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

                           (iv) to the Holders of REMIC I Regular Interests, in
         an amount equal to the remainder of the REMIC I Sub WAC Allocation
         Percentage of available funds for such Distribution Date after the
         distributions made pursuant to clause (ii) above, such that
         distributions of principal shall be deemed to be made to the REMIC I
         Regular Interests first, so as to keep the Uncertificated Balance of
         each REMIC I Regular Interest ending with the designation "B" equal to
         0.01% of the aggregate Stated Principal Balance of the Mortgage Loans
         in the related Loan Group; second, to each REMIC I Regular Interest
         ending with the designation "A," so that the Uncertificated Balance of
         each such REMIC I Regular Interest is equal to 0.01% of the excess of
         (x) the aggregate Stated Principal Balance of the Mortgage Loans in the
         related Loan Group over (y) the current Certificate Principal Balance
         of the Class A Certificate in the related Loan Group (except that if
         any such excess is a larger number than in the preceding distribution
         period, the least amount of principal shall be distributed to such
         REMIC I Regular Interests such that the REMIC I Subordinated Balance
         Ratio is maintained); and third, any remaining principal to REMIC I
         Regular Interest I-LTXX.

                           (v) Notwithstanding the distributions described in
         Section 5.01(a)(1), distributions of funds shall be made to
         Certificateholders only in accordance with Section 5.01(2) through (7)
         and Section 5.01(b).

                  (2) On each Distribution Date, the Securities Administrator
         shall withdraw from the Distribution Account to the extent on deposit
         therein an amount equal to the Group I Interest Remittance Amount and
         make the following disbursements and transfers in the order of priority
         described below, in each case to the extent of the Group I Interest
         Remittance Amount remaining for such Distribution Date:

                                      106
<PAGE>

                  FIRST, to the Certificate Insurer, the Premium Amount;

                  SECOND, to the Holders of the Class A-1 Certificates, the
                  Senior Interest Distribution Amount allocable to the Class A-1
                  Certificates;

                  THIRD, concurrently, to the Holders of the Class A-2A, Class
                  A-2B and Class A-2C Certificates, the Interest Distribution
                  Amount allocable to each such Class, on a PRO RATA basis,
                  based on the entitlement of each such Class, to the extent
                  remaining unpaid after the distribution of the Group II
                  Interest Remittance Amount as set forth in Section 5.01(a)(3)
                  below;

                  FOURTH, to the Certificate Insurer, any Reimbursement Amounts;
                  and

                  FIFTH, concurrently, to the holders of the Class A-2A, Class
                  A-2B and Class A-2C Certificates, the Interest Carry Forward
                  Amount allocable to each such Class, to the extent remaining
                  unpaid after the distribution of the Group II Interest
                  Remittance Amount as set forth in Section 5.01(a)(3) below, on
                  a PRO RATA basis, based on the entitlement of each such Class.

                  (3) On each Distribution Date, the Securities Administrator
         shall withdraw from the Distribution Account to the extent on deposit
         therein an amount equal to the Group II Interest Remittance Amount and
         make the following disbursements and transfers in the order of priority
         described below, in each case to the extent of the Group II Interest
         Remittance Amount remaining for such Distribution Date:

                  FIRST, concurrently, to the Holders of the Class A-2A, Class
                  A-2B and Class A-2C Certificates, the Senior Interest
                  Distribution Amount allocable to each such Class, on a PRO
                  RATA basis, based on the entitlement of each such Class;

                  SECOND, to the Holders of the Class A-1 Certificates the
                  Senior Interest Distribution Amount allocable to the Class A-1
                  Certificates, to the extent remaining unpaid after the
                  distribution of the Group I Interest Remittance Amount as set
                  forth in Section 5.01(a)(2) above; and

                  THIRD, to the Certificate Insurer, the Premium Amount and
                  thereafter any Reimbursement Amounts, in each case, to the
                  extent remaining unpaid after distribution of the Group I
                  Interest Remittance Amount as set forth in Section 5.01(a)(2)
                  above.

                  (4) On each Distribution Date, the Securities Administrator
         shall withdraw from the Distribution Account to the extent on deposit
         therein an amount equal to the Group I Interest Remittance Amount, and
         the Group II Interest Remittance Amount remaining after the
         distributions required by clauses (2) and (3) above and make the
         following disbursements and transfers in the order of priority
         described below, in each case to the extent of the Group I Interest
         Remittance Amount and Group II Interest Remittance Amount remaining for
         such Distribution Date:

                                      107
<PAGE>

                  sequentially, to the Holders of the Class M-1, Class M-2,
                  Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and
                  Class B-2 Certificates, in that order, the Interest
                  Distribution Amount allocable to each such Class.

                  (5) On each Distribution Date (a) prior to the Stepdown Date
         or (b) on which a Trigger Event is in effect, the Securities
         Administrator shall withdraw from the Distribution Account to the
         extent on deposit therein an amount equal to the Group I Principal
         Distribution Amount and the Group II Principal Distribution Amount and
         distribute to the Certificateholders the following amounts, in the
         following order of priority:

                           (i) The Group I Principal Distribution Amount shall
         be distributed in the following order of priority:

                  FIRST, to the Holders of the Class A-1 Certificates, until the
                  Certificate Principal Balance of the Class A-1 Certificates
                  has been reduced to zero;

                  SECOND, to the Certificate Insurer, the amount of all
                  Reimbursement Amounts not repaid from interest collections as
                  set forth in Sections 5.01(a)(2) and (a)(3) above; and

                  THIRD, concurrently, (i) to the Holders of the Class A-2A
                  Certificates and (ii) to the Holders of the Class A-2B
                  Certificates and Class A-2C Certificates, after taking into
                  account the distribution of the Group II Principal
                  Distribution Amount as described in Section 5.01(a)(5)(ii)
                  below, until the Certificate Principal Balance of each such
                  Class has been reduced to zero; provided however, that the PRO
                  RATA allocation to the Class A-2B Certificates and Class A-2C
                  Certificates pursuant to this Section 5.01(a)(5)(i) shall be
                  based on the total Certificate Principal Balance of the Class
                  A-2B Certificates and Class A-2C Certificates but shall be
                  distributed sequentially to the Class A-2B Certificates and
                  Class A-2C Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero.

                           (ii) The Group II Principal Distribution Amount shall
         be distributed in the following order of priority:

                  FIRST, concurrently, (i) to the Holders of the Class A-2A
                  Certificate and (ii) to the Holders of the Class A-2B
                  Certificates and Class A-2C Certificates, on a PRO RATA basis,
                  based on the Certificate Principal Balance of each such Class,
                  until the Certificate Principal Balance of each such Class has
                  been reduced to zero; provided however, that the PRO RATA
                  allocation to the Class A-2B Certificates and the Class A-2C
                  Certificates pursuant to this Section 5.01(a)(5)(ii) shall be
                  based on the total Certificate Principal Balance of the Class
                  A-2B Certificates and the Class A-2C Certificates, but shall
                  be distributed sequentially to the Class A-2B Certificates and
                  Class A-2C Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;

                  SECOND, to the Holders of the Class A-1 Certificates after
                  taking into account the distribution of the Group I Principal
                  Distribution Amount as described above in

                                      108
<PAGE>

                  Section 5.01(a)(5)(i), based on the Certificate Principal
                  Balance of the Class A-1 Certificates, until the Certificate
                  Principal Balance of the Class A-1 Certificates has been
                  reduced to zero; and

                  THIRD, to the Certificate Insurer, the remaining amount of all
                  Reimbursement Amounts not repaid from interest collections
                  pursuant to Section 5.01(a)(2) and (a)(3) and principal
                  collections pursuant to Section 5.01(a)(5)(i).

                           (iii) The Group I Principal Distribution Amount and
         Group II Principal Distribution Amount remaining after distributions
         pursuant to Sections 5.01(a)(5)(i) and (ii) above shall be distributed
         in the following order of priority:

                  sequentially, to the Holders of the Class M-1, Class M-2,
                  Class M-3, Class M-4, Class M-5, Class M-6 , Class B-1 and
                  Class B-2 Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero.

                  (6) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, the Securities
         Administrator shall withdraw from the Distribution Account to the
         extent on deposit therein an amount equal to the Group I Principal
         Distribution Amount and the Group II Principal Distribution Amount and
         distribute to the Certificateholders the following amounts, in the
         following order of priority:

                           (i) The Group I Principal Distribution Amount shall
         be distributed in the following order of priority:

                  FIRST, to the Holders of the Class A-1 Certificates, the Class
                  A-1 Principal Distribution Amount, until the Certificate
                  Principal Balance of Class A-1 Certificates has been reduced
                  to zero;

                  SECOND, to the Certificate Insurer, the amount of all
                  Reimbursement Amounts not repaid from interest collections
                  pursuant to Sections 5.01(a)(2) and (a)(3) above; and

                  THIRD, concurrently, (i) to the Holders of the Class A-2A
                  Certificates and (ii) to the Holders of the Class A-2B
                  Certificates and Class A-2C Certificates, after taking into
                  account the distribution of the Group II Principal
                  Distribution Amount, pursuant to Section 5.01(a)(6)(ii) below
                  up to an amount equal to the amount, if any, of the Class A-2
                  Principal Distribution Amount remaining unpaid on such
                  Distribution Date, on a PRO RATA basis, based on the
                  Certificate Principal Balance of each such Class, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero; provided however, that the PRO RATA
                  allocation to the Class A-2B Certificates and Class A-2C
                  Certificates pursuant to this Section 5.01(a)(6)(i) shall be
                  based on the total Certificate Principal Balance of the Class
                  A-2B Certificates and Class A-2C Certificates, but shall be
                  distributed sequentially to the Class A-2B Certificates and
                  Class A-2C Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero.

                                      109
<PAGE>

                           (ii) The Group II Principal Distribution Amount shall
         be distributed in the following order of priority:

                  FIRST, concurrently, (i) to the Holders of the Class A-2A
                  Certificates and (ii) to the Holders of the Class A-2B
                  Certificates and Class A-2C Certificates, the Class A-2
                  Principal Distirbution Amount, on a PRO RATA basis, based on
                  the Certificate Principal Balance of each such Class, until
                  the Certificate Principal Balance of each such Class has been
                  reduced to zero; provided however, that the PRO RATA
                  allocation to the Class A-2B Certificates and Class A-2C
                  Certificates pursuant to this Section 5.01(a)(6)(ii) shall be
                  based on the total Certificate Principal Balance of the Class
                  A-2B Certificates and Class A-2C Certificates, but shall be
                  distributed sequentially to the Class A-2B Certificates and
                  Class A-2C Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;

                  SECOND, to the Holders of the Class A-1 Certificates, after
                  taking into account the distribution of the Group I Principal
                  Distribution Amount pursuant to Section 5.01(a)(6)(i), up to
                  an amount equal to the amount, if any, of the Class A-1
                  Principal Distribution Amount remaining unpaid on such
                  Distribution Date, until the Certificate Principal Balance of
                  the Class A-1 Certificates has been reduced to zero; and

                  THIRD, to the Certificate Insurer, the remaining amount of all
                  Reimbursement Amounts, not repaid from interest collections
                  pursuant to Sections 5.01(a)(2) and (a)(3) and principal
                  collections pursuant to Section 5.01(a)(6)(i).

                           (iii) The Principal Distribution Amount remaining
         after distributions pursuant to Sections 5.01(a)(6)(i) and (ii) above
         shall be distributed in the following order of priority:

                  FIRST, to the Holders of the Class M-1 Certificates, the
                  lesser of (x) the remaining Principal Distribution Amount and
                  (y) the Class M-1 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class M-1 Certificates
                  has been reduced to zero;

                  SECOND, to the Holders of the Class M-2 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the amounts distributed to the
                  Holders of the Class M-1 Certificates under clause first
                  above, and (y) the Class M-2 Principal Distribution Amount,
                  until the Certificate Principal Balance of the Class M-2
                  Certificates has been reduced to zero;

                  THIRD, to the Holders of the Class M-3 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above and to the Holders of the Class M-2
                  Certificates under clause second above, and (y) the Class M-3
                  Principal Distribution Amount, until the Certificate Principal
                  Balance of the Class M-3 Certificates has been reduced to
                  zero;

                                      110
<PAGE>

                  FOURTH, to the Holders of the Class M-4 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above and to the Holders of
                  the Class M-3 Certificates under clause third above, and (y)
                  the Class M-4 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class M-4 Certificates
                  has been reduced to zero;

                  FIFTH, to the Holders of the Class M-5 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above and to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, and (y) the Class M-5 Principal Distribution Amount,
                  shall be distributed to the Holders of the Class M-5
                  Certificates, until the Certificate Principal Balance of the
                  Class M-5 Certificates has been reduced to zero;

                  SIXTH, to the Holders of the Class M-6 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M 2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above and to the Holders of the Class M-5 Certificates under
                  clause fifth above, and (y) the Class M-6 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class M-6 Certificates, until the Certificate Principal
                  Balance of the Class M-6 Certificates has been reduced to
                  zero;

                  SEVENTH, to the Holders of the Class B-1 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M 2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, to the Holders of the Class M-5 Certificates under
                  clause fifth above and to the Holders of the Class M-6
                  Certificates under clause sixth above, and (y) the Class B-1
                  Principal Distribution Amount, until the Certificate Principal
                  Balance of the Class B-1 Certificates has been reduced to
                  zero; and

                  EIGHTH, to the Holders of the Class B-2 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M 2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, to the Holders of the Class M-5 Certificates under
                  clause fifth above and to the Holders of the Class M-6
                  Certificates under clause sixth above, and to the Holders of
                  the Class B-1

                                      111
<PAGE>

                  Certificates under clause seventh above, and (y) the Class B-2
                  Principal Distribution Amount, until the Certificate Principal
                  Balance of the Class B-2 Certificates has been reduced to
                  zero.

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

                           (i) to the Holders of the Class or Classes of
         Certificates then entitled to receive distributions in respect of
         principal, in an amount equal to any Extra Principal Distribution
         Amount, payable to such Holders in accordance with the priorities set
         forth in Section 5.01(b) below;

                           (ii) sequentially, to the Holders of the Class M-1,
         Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and
         Class B-2 Certificates, in that order, in an amount equal to the
         Interest Carry Forward Amount allocable to each such Class;

                           (iii) sequentially, to the Holders of the Class M-1,
         Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and
         Class B-2 Certificates, in that order, in an amount equal to the
         Allocated Realized Loss Amount allocable to each such Class;

                           (iv) concurrently, to the Holders of the Class A
         Certificates, in an amount equal to such Certificates' allocated share
         of any Prepayment Interest Shortfalls on the related Mortgage Loans to
         the extent not covered by payments pursuant to Section 3.22 or 4.18 and
         any shortfalls resulting from the application of the Relief Act or
         similar state or local law or the bankruptcy code with respect to the
         related Mortgage Loans to the extent not previously reimbursed pursuant
         to Section 1.02;

                           (v) sequentially, to the Holders of the Class M-1,
         Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and
         Class B-2 Certificates, in that order, in an amount equal to such
         certificates' share of any Prepayment Interest Shortfalls on the
         Mortgage Loans to the extent not covered by payments pursuant to
         Sections 3.22 or Section 4.18 and any Relief Act Interest Shortfall, in
         each case that were allocated to such Class for such Distribution Date
         and for any prior Distribution Date, to the extent not previously
         reimbursed pursuant to Section 1.02;

                           (vi) to the Reserve Fund from amounts otherwise
         payable to the Class CE Certificates, and then from the Reserve Fund to
         the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
         Class M-6, Class B-1 and Class B-2 Certificates in that order, in an
         amount equal to the unpaid amount of any Net WAC Rate Carryover Amount
         for each such Class for such Distribution Date;

                           (vii) to the Reserve Fund, the amount required to be
         deposited therein pursuant to Section 3.24(b), after taking into
         account amounts received under the Cap Contracts;

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

                                      112
<PAGE>

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

                  The Class CE Certificates are intended to receive all
principal and interest received by the Trust on the Mortgage Loans that is not
otherwise distributable to any other Class of Regular Certificates or REMIC
Regular Interests. If the Securities Administrator determines that the Residual
Certificates are entitled to any distributions on any Distirbution Date other
than the final Distribution Date, the Securities Administrator, prior to any
such distribution to any Residual Certificate, shall notify the Depositor of
such impending distribution. Upon such notification, the Depositor will prepare
and request that the other parties hereto enter into an amendment to the Pooling
and Servicing Agreement pursuant to Section 12.01, to revise such mistake in the
distribution provisions.

                  On each Distribution Date, after making the distributions of
the Available Distribution Amount as set forth above, the Securities
Administrator will first, withdraw from the Reserve Fund all income from the
investment of funds in the Reserve Fund and distribute such amount to the
Holders of the Class CE Certificates, and second, withdraw from the Reserve
Fund, to the extent of amounts remaining on deposit therein, the amount of any
Net WAC Rate Carryover Amount for such Distribution Date and distribute such
amount first, concurrently to the Class A Certificates, on a PRO RATA basis;
second, to the Class M-1 Certificates, third, to the Class M-2 Certificates,
fourth, to the Class M-3 Certificates, fifth, to the Class M-4 Certificates,
sixth, to the Class M-5 Certificates, seventh, to the Class M-6 Certificates,
eighth, to the Class B-1 Certificates, and ninth, to the Class B-2 Certificates,
in each case to the extent to the extent any Net WAC Rate Carryover Amount is
allocable to each such Class.

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

                  FIRST, concurrently to (i) the Holders of the Class A-1
                  Certificates, (ii) the Holders of the Class A-2A Certificates
                  and (iii) the Holders of the Class A-2B Certificates and Class
                  A-2C Certificates, on a PRO RATA basis, based on the
                  Certificate Principal Balance of each such Class, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero; provided, however that the PRO RATA
                  allocation to the Class A-2B Certificates and Class A-2C
                  Certificates pursuant to this clause first shall be based on
                  the total Certificate Principal Balance of the Class A-2B
                  Certificates and Class A-2C Certificates, but shall be
                  distributed sequentially to the Class A-2B Certificates and
                  Class A-2C Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;

                  SECOND, sequentially, to the Holders of the Class M-1, Class
                  M-2, Class M 3, Class M-4, Class M-5, Class M-6, Class B-1 and
                  Class B-2 Certificates, in that

                                      113
<PAGE>

                  order, until the Certificate Principal Balance of each such
                  Class has been reduced to zero.

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

                  FIRST, (a) the lesser of (x) the Group I Principal
                  Distribution Amount and (y) the Class A-1 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class A-1 Certificates until the Certificate Principal
                  Balance of the Class A-1 Certificates has been reduced to zero
                  and (b) the lesser of (x) the Group II Principal Distribution
                  Amount and (y) the Class A-2 Principal Distribution Amount,
                  shall be distributed concurrently (i) to the Holders of the
                  Class A-2A Certificates and (ii) to the Holders of the Class
                  A-2B Certificates and Class A-2C Certificates, on a PRO RATA
                  basis, based on the Certificate Principal Balance of each such
                  Class, until the Certificate Principal Balance of each such
                  Class has been reduced to zero, provided, however that the PRO
                  RATA allocation to the Class A-2B Certificates and Class A-2C
                  Certificates pursuant to this clause shall be based on the
                  total Certificate Principal Balance of the Class A-2B
                  Certificates and Class A-2C Certificates, but shall be
                  distributed sequentially to the Class A-2B Certificates and
                  Class A-2C Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;

                  SECOND, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the amount distributed to the
                  Holders of the Class A Certificates pursuant to clause FIRST
                  of this Section 5.01(b)(ii) and (y) the Class M-1 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class M-1 Certificates, until the Certificate Principal
                  Balance of such Class has been reduced to zero;

                  THIRD, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii) and to
                  the Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii) and (y) the Class M-2
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class M-2 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  FOURTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii) and to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii) and (y) the Class M-3 Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class M-3 Certificates, until the Certificate Principal
                  Balance of such Class has been reduced to zero;

                  FIFTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1

                                      114
<PAGE>

                  Certificates pursuant to clause second of this Section
                  5.01(b)(ii), to the Holders of the Class M-2 Certificates
                  pursuant to clause third of this Section 5.01(b)(ii) and to
                  the Holders of the Class M-3 Certificates pursuant to clause
                  fourth of this Section 5.01(b)(ii) and (y) the Class M-4
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class M-4 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  SIXTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii) and to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii) and (y)
                  the Class M-5 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class M-5 Certificates,
                  until the Certificate Principal Balance of such Class has been
                  reduced to zero;

                  SEVENTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii) and to
                  the Holders of the Class M-5 Certificates pursuant to clause
                  sixth of this Section 5.01(b)(ii) and (y) the Class M-6
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class M-6 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  EIGHTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(b)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(b)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(b)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(b)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(b)(ii) and to the Holders of the Class
                  M-6 Certificates pursuant to clause seventh of this Section
                  5.01(b)(ii) and (y) the Class B-1 Principal Distribution
                  Amount, shall be distributed to the Holders of the Class B-1
                  Certificates until the Certificate Principal Balance of such
                  Class has been reduced to zero; and

                  NINTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(b)(ii), to the
                  Holders of the Class M-1

                                      115
<PAGE>

                  Certificates pursuant to clause second of this Section
                  5.01(b)(ii), to the Holders of the Class M-2 Certificates
                  pursuant to clause third of this Section 5.01(b)(ii), to the
                  Holders of the Class M-3 Certificates pursuant to clause
                  fourth of this Section 5.01(b)(ii), to the Holders of the
                  Class M-4 Certificates pursuant to clause fifth of this
                  Section 5.01(b)(ii), to the Holders of the Class M-5
                  Certificates pursuant to clause sixth of this Section
                  5.01(b)(ii) to the Holders of the Class M-6 Certificates
                  pursuant to clause seventh of this Section 5.01(b)(ii), and to
                  the Holders of the Class B-1 Certificates pursuant to clause
                  eighth of this Section 5.01(b)(ii) and (y) the Class B-2
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class B-2 Certificates until the Certificate
                  Principal Balance of such Class has been reduced to zero.

                  (c) On each Distribution Date, the Securities Administrator
shall withdraw any amounts then on deposit in the Distribution Account that
represent Prepayment Charges and shall distribute such amounts to the Class P
Certificateholders as described above.

                  (d) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 5.01(f) or
Section 10.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Certificates having an
initial aggregate Certificate Principal Balance that is in excess of the lesser
of (i) $5,000,000 or (ii) two-thirds of the initial Certificate Principal
Balance of such Class of Certificates, or otherwise by check mailed by first
class mail to the address of such Holder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the Corporate Trust Office
of the Securities Administrator or such other location specified in the notice
to Certifcateholders of such final distribution.

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

                  (e) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee, the

                                      116
<PAGE>

Servicer, the Securities Administrator or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.

                  (f) Except as otherwise provided in Section 10.01, whenever
the Securities Administrator expects that the final distribution with respect to
any Class of Certificates will be made on the next Distribution Date, the
Securities Administrator shall, no later than three (3) days before the related
Distribution Date, mail to each Holder on such date of such Class of
Certificates a notice to the effect that:

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

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

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Securities Administrator and credited to the
account of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 5.01(f) shall not
have been surrendered for cancellation within six months after the time
specified in such notice, the Securities Administrator shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates but shall continue to hold any remaining funds for the benefit of
non-tendering Certificateholders. If within one year after the final notice any
such Certificates shall not have been surrendered for cancellation, any amounts
which were paid by the Certificate Insurer under the Certificate Insurance
Policy and are being held for non-tendering Certificateholders shall be
reimbursed to the Certificate Insurer. The costs and expenses of maintaining the
funds in trust and of contacting such Certificateholders shall be paid out of
the assets remaining in such trust fund. If within one year after the final
notice any such Certificates shall not have been surrendered for cancellation,
the Securities Administrator shall pay to the Depositor all such amounts, and
all rights of non-tendering Certificateholders in or to such amounts shall
thereupon cease. No interest shall accrue or be payable to any Certificateholder
on any amount held in trust by the Securities Administrator as a result of such
Certificateholder's failure to surrender its Certificate(s) on the final
Distribution Date for final payment thereof in accordance with this Section
5.01(f). Any such amounts held in trust by the Securities Administrator shall be
held uninvested in an Eligible Account.

                  (g) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate, a
Mezzanine Certificate or a Class B Certificate be reduced more than once in
respect of any particular amount both (a) allocated to

                                      117
<PAGE>

such Certificate in respect of Realized Losses pursuant to Section 5.04 and (b)
distributed to the Holder of such Certificate in reduction of the Certificate
Principal Balance thereof pursuant to this Section 5.01 from Net Monthly Excess
Cashflow and (ii) in no event shall the Uncertificated Balance of a REMIC
Regular Interest be reduced more than once in respect of any particular amount
both (a) allocated to such REMIC Regular Interest in respect of Realized Losses
pursuant to Section 5.04 and (b) distributed on such REMIC Regular Interest in
reduction of the Uncertificated Balance thereof pursuant to this Section 5.01.

                  SECTION 5.02. Statements to Certificateholders.

                  On each Distribution Date, the Securities Administrator (based
on the information set forth in the Servicer Report for such Distribution Date
and information provided by the Trustee or the counterparty to the Cap Contracts
with respect to payments made pursuant to the Cap Contracts) shall make
available to each Holder of the Certificates and the Certificate Insurer, a
statement as to the distributions made on such Distribution Date setting forth:

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

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

                           (iii) the aggregate Servicing Fee received by the
         Servicer and Master Servicing Fee received by the Master Servicer
         during the related Due Period;

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

                           (v) Reserved;

                           (vi) the number, aggregate principal balance,
         weighted average remaining term to maturity and weighted average
         Mortgage Rate of the Mortgage Loans as of the related Due Date;

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

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

                                      118
<PAGE>

                           (ix) if available, the book value of any REO Property
         as of the close of business on the last Business Day of the calendar
         month preceding the Distribution Date;

                           (x) the aggregate amount of Principal Prepayments
         made during the related Prepayment Period and the aggregate amount of
         any Prepayment Charges received in respect thereof;

                           (xi) the aggregate amount of Realized Losses incurred
         during the related Prepayment Period and the aggregate amount of
         Realized Losses incurred since the Closing Date;

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

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

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

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

                           (xvi) the aggregate amount of any Prepayment Interest
         Shortfall for such Distribution Date, to the extent not covered by
         payments by the Servicer pursuant to Section 3.22 of this Agreement or
         the Master Servicer pursuant to Section 4.18 of this Agreement;

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

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

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

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

                                      119
<PAGE>

                           (xxi) the Net WAC Rate Carryover Amount, if any, for
         such Distribution Date;

                           (xxii) the Net WAC Rate Carryover Amount, if any,
         outstanding after reimbursements therefor on such Distribution Date and
         any amounts received under the Cap Contracts;

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

                           (xxiv) the amount of any deposit to the Reserve Fund
         contemplated by Section 3.24(b);

                           (xxv) the balance of the Reserve Fund prior to the
         deposit or withdrawal of any amounts on such Distribution Date;

                           (xxvi) the amount of any deposit to the Reserve Fund
         pursuant to Section 5.01(a)(7)(vi);

                           (xxvii) the balance of the Reserve Fund after all
         deposits and withdrawals on such Distribution Date;

                           (xxviii) the Loss Severity Percentage with respect to
         each Mortgage Loan;

                           (xxix) the Aggregate Loss Severity Percentage;

                           (xxx) the Class A Certificate Deficiency Amount and
         the Policy Payment for such Distribution Date; and

                           (xxxi) the amount of the Reimbursement Amount for
         such Distribution Date and the amount received by the Certificate
         Insurer in respect thereof on such Distribution Date.

                  The Securities Administrator will make such statement (and, at
its option, any additional files containing the same information in an
alternative format) available each month to the Certificateholders, the
Certificate Insurer and the Rating Agencies via the Securities Administrator's
internet website. The Securities Administrator's internet website shall
initially be located at http:\\www.ctslink.com and assistance in using the
website can be obtained by calling the Securities Administrator's customer
service desk at 1-301-815-6600. Parties that are unable to use the above
distribution options are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such statements
are distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Securities Administrator shall provide
timely and adequate notification to all above parties regarding any such
changes.

                                      120
<PAGE>

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

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

                  Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish upon request to each
Person who at any time during the calendar year was a Holder of a Residual
Certificate a statement setting forth the amount, if any, actually distributed
with respect to the Residual Certificates, as appropriate, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder.

                  The Securities Administrator shall, upon request, furnish to
each Certificateholder during the term of this Agreement, such periodic,
special, or other reports or information, whether or not provided for herein, as
shall be reasonable with respect to the Certificateholder, as applicable, or
otherwise with respect to the purposes of this Agreement, all such reports or
information to be provided at the expense of the Certificateholder, in
accordance with such reasonable and explicit instructions and directions as the
Certificateholder may provide.

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

                  SECTION 5.03. Servicer Reports; P&I Advances.

                  (a) On or before 12:00 noon New York time on the 18th calendar
day of each month, and if the 18th calendar day is not a Business Day, the
immediately following Business Day, the Servicer shall deliver to the Master
Servicer and the Securities Administrator by telecopy or electronic mail (or by
such other means as the Servicer, the Master Servicer and the Securities
Administrator may agree from time to time) a remittance report containing such
information with respect to the Mortgage Loans and the related Distribution Date
as is reasonably available to the Servicer as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to master service the Mortgage Loans and oversee the servicing by the
Servicer and the Securities Administrator to fulfill its obligations hereunder
with respect to securities and tax reporting.

                  (b) The amount of P&I Advances to be made by the Servicer on
any Distribution Date shall equal, subject to Section 5.03(d), (i) the aggregate
amount of Monthly Payments (net of the related Servicing Fees), due during the
related Due Period in respect of the Mortgage Loans, which Monthly Payments were
delinquent as of the close of business on the related Determination Date and
(ii) with respect to each REO Property, which was acquired during or prior to
the related Prepayment Period and as to which an REO Disposition did not

                                      121
<PAGE>

occur during the related Prepayment Period, an amount equal to the excess, if
any, of the REO Imputed Interest on such REO Property for the most recently
ended calendar month, over the net income from such REO Property deposited in
the Collection Account pursuant to Section 3.21 for distribution on such
Distribution Date; provided, however, the Servicer shall not be required to make
P&I Advances with respect to Relief Act Interest Shortfalls, or with respect to
Prepayment Interest Shortfalls in excess of its obligations under Section 3.22.
For purposes of the preceding sentence, the Monthly Payment on each Balloon
Mortgage Loan with a delinquent Balloon Payment is equal to the assumed monthly
payment that would have been due on the related Due Date based on the original
principal amortization schedule for such Balloon Mortgage Loan.

                  By 12:00 noon New York time on the Servicer Remittance Date,
the Servicer shall remit in immediately available funds to the Securities
Administrator for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans for the related Distribution Date either (i) from its own funds or (ii)
from the Collection Account, to the extent of any Amounts Held For Future
Distribution on deposit therein (in which case it will cause to be made an
appropriate entry in the records of the Collection Account that Amounts Held For
Future Distribution have been, as permitted by this Section 5.03, used by the
Servicer in discharge of any such P&I Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of P&I Advances to be
made by the Servicer with respect to the Mortgage Loans. In addition, the
Servicer shall have the right to reimburse itself for any outstanding P&I
Advance made from its own funds from Amounts Held for Future Distribution. Any
Amounts Held For Future Distribution used by the Servicer to make P&I Advances
or to reimburse itself for outstanding P&I Advances shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Collection Account no later than the close of business on the Servicer
Remittance Date immediately following the Due Period or Prepayment Period for
which such amounts relate. The Securities Administrator will notify the Servicer
and the Master Servicer by the close of business on the Business Day prior to
the Distribution Date in the event that the amount remitted by the Servicer to
the Securities Administrator on such date is less than the P&I Advances required
to be made by the Servicer for the related Distribution Date.

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

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

                                      122
<PAGE>

                  (e) Subject to and in accordance with the provisions of
Article VIII, in the event the Servicer fails to make any required P&I Advance,
then the Master Servicer (in its capacity as successor servicer) or any other
successor Servicer shall be required to make such P&I Advance on the
Distribution Date on which the Servicer was required to make such Advance,
subject to its determination of recoverability.

                  SECTION 5.04. Allocation of Realized Losses.

                  (a) Prior to the Determination Date, the Servicer shall
determine as to each Mortgage Loan and REO Property and include in the monthly
remittance report provided to the Master Servicer and the Securities
Administrator (substantially in the form of Schedule 4 hereto) such information
as is reasonably available to the Servicer as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to master service the Mortgage Loans and oversee the servicing by the
Servicer and the Securities Administrator to fulfill its obligations hereunder
with respect to securities and tax reporting, which shall include, but not be
limited to: (i) the total amount of Realized Losses, if any, incurred in
connection with any Final Recovery Determinations made during the related
Prepayment Period; and (ii) the respective portions of such Realized Losses
allocable to interest and allocable to principal. Prior to each Determination
Date, the Servicer shall also determine as to each Mortgage Loan: (i) the total
amount of Realized Losses, if any, incurred in connection with any Deficient
Valuations made during the related Prepayment Period; and (ii) the total amount
of Realized Losses, if any, incurred in connection with Debt Service Reductions
in respect of Monthly Payments due during the related Due Period.

                  (b) All Realized Losses on the Mortgage Loans allocated to any
REMIC I Regular Interest pursuant to Section 5.04(c) on the Mortgage Loans shall
be allocated by the Securities Administrator on each Distribution Date as
follows: first, to Net Monthly Excess Cashflow; second, to the Class CE
Certificates; third, to the Class B-1 Certificates until the Certificate
Principal Balance of the Class B-1 Certificates has been reduced to zero,
fourth, to the Class B-2 Certificates until the Certificate Principal Balance of
the Class B-2 Certificates has been reduced to zero, fifth, to the Class M-6
Certificates, until the Certificate Principal Balance of the Class M-6
Certificates has been reduced to zero; sixth, to the Class M-5 Certificates,
until the Certificate Principal Balance of the Class M-5 Certificates has been
reduced to zero; seventh, to the Class M-4 Certificates, until the Certificate
Principal Balance of the Class M-4 Certificates has been reduced to zero;
eighth, to the Class M-3 Certificates, until the Certificate Principal Balance
of the Class M-3 Certificates has been reduced to zero; ninth, to the Class M-2
Certificates, until the Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero; and tenth, to the Class M-1 Certificates,
until the Certificate Principal Balance of the Class M-1 Certificates has been
reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
or Class B Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance

                                      123
<PAGE>

thereof by the amount so allocated; any allocation of Realized Losses to a Class
CE Certificates shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 5.01(a)(7)(viii). No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates or Class P Certificates.

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

                  In addition, in the event that the Servicer receives any
Subsequent Recoveries, the Servicer shall deposit such funds into the Collection
Account pursuant to Section 3.08. If, after taking into account such Subsequent
Recoveries, the amount of a Realized Loss is reduced, the amount of such
Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Class of Subordinate Certificates with the highest payment
priority to which Realized Losses have been allocated, but not by more than the
amount of Realized Losses previously allocated to that Class of Subordinate
Certificates pursuant to this Section 5.04 and not previously reimbursed to such
Class of Subordinate Certificates with Net Monthly Excess Cashflow pursuant to
Section 5.01(a)(7). The amount of any remaining Subsequent Recoveries will be
applied to sequentially increase the Certificate Principal Balance of the
Subordinate Certificates, beginning with the Class of Subordinate Certificates
with the next highest payment priority, up to the amount of such Realized Losses
previously allocated to such Class of Subordinate Certificates pursuant to this
Section 5.04 and not previously reimbursed to such Class of Subordinate
Certificates with Net Monthly Excess Cashflow pursuant to Section
5.01(a)(7)(iii). Holders of such Certificates will not be entitled to any
payment in respect of current interest on the amount of such increases for any
Interest Accrual Period preceding the Distribution Date on which such increase
occurs. Any such increases shall be applied to the Certificate Principal Balance
of each Subordinate Certificate of such Class in accordance with its respective
Percentage Interest.

                  (c) (i) The REMIC I Marker Percentage of all Realized Losses
on the Mortgage Loans shall be allocated by the Trustee, based solely on the
instructions of the Securities Administrator, on each Distribution Date to the
following REMIC I Regular Interests in the specified percentages, as follows:
first, to Uncertificated Interest payable to the REMIC I Regular Interest I-LTAA
and REMIC I Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC
I Interest Loss Allocation Amount, 98.00% and 2.00%, respectively; second, to
the Uncertificated Balances of the REMIC I Regular Interest I-LTAA and REMIC I
Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC I Principal
Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTB2 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTB2 has been reduced to zero; fourth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTB1 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTB1 has been reduced to zero; fifth, to
the Uncertificated Balances

                                      124
<PAGE>

of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM6 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM6 has been reduced to
zero; sixth, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM5 and REMIC I Regular Interest I-LTZZ, 98.00%,
1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LTM5 has been reduced to zero; seventh, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM4 and
REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Balance of REMIC I Regular Interest I-LTM4 has been reduced
to zero; eighth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM3 has been reduced to zero; ninth, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM2 and
REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Balance of REMIC I Regular Interest I-LTM2 has been reduced
to zero; and tenth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM1 has been reduced to zero.

                           (ii) The REMIC I Sub WAC Allocation Percentage of all
         Realized Losses shall be applied after all distributions have been made
         on each Distribution Date first, so as to keep the Uncertificated
         Balance of each REMIC I Regular Interest ending with the designation
         "B" equal to 0.01% of the aggregate Stated Principal Balance of the
         Mortgage Loans in the related Loan Group; second, to each REMIC I
         Regular Interest ending with the designation "A," so that the
         Uncertificated Balance of each such REMIC I Regular Interest is equal
         to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
         the Mortgage Loans in the related Loan Group over (y) the current
         Certificate Principal Balance of the Class A Certificate in the related
         Loan Group (except that if any such excess is a larger number than in
         the preceding distribution period, the least amount of Realized Losses
         shall be applied to such REMIC I Regular Interests such that the REMIC
         I Subordinated Balance Ratio is maintained); and third, any remaining
         Realized Losses shall be allocated to REMIC I Regular Interest I-LTXX.

                  SECTION 5.05. Compliance with Withholding Requirements.

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

                                      125
<PAGE>

                  SECTION 5.06. Reports Filed with Securities and Exchange
Commission.

                  The Depositor shall prepare or cause to be prepared the
initial current report on Form 8-K. Within 15 days after each Distribution Date,
the Securities Administrator shall, in accordance with industry standards, file
with the Commission via the Electronic Data Gathering and Retrieval System
("EDGAR"), a Form 8-K (or other comparable Form containing the same or
comparable information or other information mutually agreed upon) with a copy of
the statement to be furnished to the Certificateholders for such Distribution
Date as an exhibit thereto. Prior to January 30, 2005, the Securities
Administrator shall, in accordance with industry standards, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to (i)
March 20, 2005 and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, prior to March 20th of each year thereafter, the Master Servicer
shall provide the Securities Administrator with a Master Servicer Certification,
together with a copy of the annual independent accountant's servicing report and
annual statement of compliance of the Servicer to be delivered pursuant to this
Agreement and, if applicable, the annual independent accountant's servicing
report and annual statement of compliance to be delivered by the Master Servicer
pursuant to Sections 4.15 and 4.16. Prior to (i) March 31, 2005 and (ii) unless
and until a Form 15 Suspension Notice shall have been filed, March 31 of each
year thereafter, the Securities Administrator shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust. Such Form
10-K shall include the Master Servicer Certification and other documentation
provided by the Master Servicer pursuant to the second preceding sentence. The
Depositor hereby grants to the Securities Administrator a limited power of
attorney to execute and file each such document on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities Administrator shall have no
responsibility to file any items other than those specified in this Section
5.06; provided, however, the Securities Administrator will cooperate with the
Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Fees and expenses incurred by the Securities
Administrator in connection with this Section 5.06 shall not be reimbursable
from the Trust Fund.

                  SECTION 5.07. The Certificate Insurance Policy.

                  (a) The Trustee hereby appoints the Securities Administrator
as its agent in connection with the receipt and distribution of all amounts
required to be paid by the Certificate Insurer under the Certificate Insurance
Policy and the providing of any notices required to be provided thereunder. The
Securities Administrator shall establish a separate non-interest bearing trust
account which shall be an Eligible Account for the benefit of Holders of the
Class A-1 Certificates and the Certificate Insurer referred to herein as the
"Policy Payment Account" over which the Securities Administrator shall have
exclusive control and sole right of withdrawal. The Securities Administrator
shall deposit upon receipt any amount paid under the Certificate Insurance
Policy in the Policy Payment Account and distribute such amount only for
purposes of payment to the Class A-1 Certificates of the Policy Payment for
which a claim was made and

                                      126
<PAGE>

such amount may not be applied to satisfy any costs, expenses or liabilities of
the Master Servicer, the Trustee or the Trust Fund or to pay any other Class of
Certificates. Amounts paid under the Certificate Insurance Policy, to the extent
needed to pay any Class A-1 Certificate Deficiency Amount, shall be transferred
to the Distribution Account on the related Distribution Date, and the portion
thereof representing the Class A-1 Certificate Deficiency Amount shall be
disbursed by the Securities Administrator to the Class A-1 Certificateholders,
in each case as if it were a distribution to the Holders of such Certificates
pursuant to Section 5.01. It shall not be necessary for such payments to be made
by checks or wire transfers separate from the checks or wire transfers used to
pay other distributions to the Class A-1 Certificateholders, as applicable, with
other funds available to make such payment. However, the amount of any payment
of principal or of interest on the Class A-1 Certificates to be paid from funds
transferred from the Policy Payment Account shall be noted as provided in
paragraph (d) below and in the statement to be furnished to Holders of such
Class of Certificates pursuant to Section 5.02. Funds held in the Policy Payment
Account shall not be invested. Any funds remaining in the Policy Payment Account
on the first Business Day following a Distribution Date shall be returned to the
Certificate Insurer pursuant to the written instructions of the Certificate
Insurer by the end of such Business Day.

                  (b) If the Securities Administrator has determined that a
Class A-1 Certificate Deficiency Amount is required to be paid under the
Certificate Insurance Policy with respect to such Distribution Date, it shall
deliver a Notice of Claim (in the form attached as Exhibit A to the Certificate
Insurance Policy) to the Certificate Insurer no later than noon, New York, New
York time on the second Business Day preceding such Distribution Date and shall
provide a copy thereof to the Master Servicer at or prior to the time such
Notice of Claim is received by the Certificate Insurer. The Notice of Claim
shall constitute a claim therefor pursuant to the Certificate Insurance Policy.

                  (c) If the Securities Administrator receives a certified copy
of a final order of the appropriate court exercising jurisdiction in an
Insolvency Proceeding with respect to which the appeal period as expired without
an appeal having been filed (an "Order") that any prior distribution made on the
Insured Certificates constitutes an Avoided Payment and must be returned by the
Certificate Owner, the Securities Administrator shall so notify the Certificate
Insurer, shall comply with the provisions of the Certificate Insurance Policy to
obtain payment by the Certificate Insurer of such Avoided Payment and shall, at
the time it provides notice to the Certificate Insurer, notify each holder of
the affected Insured Certificates by mail that (i) subject to the terms of the
Certificate Insurance Policy, the Certificate Insurer will disburse the Avoided
Payment directly to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the Order on the Business Day following such
Certificateholder's making timely delivery to the Securities Administrator of
(a) a certified copy of the Order of such Certificateholder that such Order has
been entered and is not subject to any stay, (b) an assignment duly executed and
delivered by such Certificate Owner, in such form as is reasonably required by
the Certificate Insurer and provided to such Certificateholder by the
Certificate Insurer, irrevocably assigning to the Certificate Insurer all rights
and claims of such Certificate Owner relating to or arising under the affected
Insured Certificates against the debtor that made a payment of such Avoided
Payment, or otherwise with respect to such payment and (c) a payment notice in
the form required by the Certificate Insurance Policy, appropriately completed
and executed by the Securities Administrator, provided that if such documents
are received after 10:00 a.m., New York time, on such Business Day, they will be
deemed to be received on the

                                      127
<PAGE>

following Business Day. A copy of the Certificate Insurance Policy shall be made
available to each affected Certificateholder through the Trustee, and the
Securities Administrator shall furnish to the Certificate Insurer or its fiscal
agent, if any, a copy of its records evidencing the payments that have been made
by the Securities Administrator and subsequently recovered from
Certificateholders and the dates on which such payments were made.

                  (d) The Securities Administrator shall keep a complete and
accurate record of the amount of interest and principal paid in respect of any
Class A-1 Certificates from moneys received under the Certificate Insurance
Policy. The Certificate Insurer shall have the right to inspect such records at
reasonable times during normal business hours upon two Business Day's prior
notice to the Securities Administrator.

                  (e) The Holders of the Insured Certificates are not entitled
to institute proceedings directly against the Certificate Insurer. Each Holder
of the Insured Certificates, by its purchase of Insured Certificates hereby
agrees that the Certificate Insurer may at any time during the continuation of
any proceeding relating to an Avoided Payment, direct all matters relating to
such Avoided Payment on their behalf, including, without limitation, the
direction of any appeal of any order relating to such preference claim and the
posting of any surety, supersedeas or performance bond pending any such appeal.

                  (f) Any payments to the Certificate Insurer shall be made by
wire transfer of immediately available funds to the following Federal Reserve
Account (unless and until the Certificate Insurer notifies the Securities
Administrator of a change in such account information in writing):

                           Fleet Bank, N.A.
                           777 Main Street
                           Hartford, CT  06115-2001
                           ABA Number: 04900571
                           For the Account of: XL Capital Assurance Inc.
                           1221 Avenue of the Americas, 31st Floor
                           New York, NY 10020-1001
                           Account #: 942-783-5841
                           Reference: Policy Number CA01177A

                  (g) The Securities Administrator shall, upon retirement of the
Class A-1 Certificates, furnish to the Certificate Insurer a notice of such
retirement, and, after retirement of the Class A-1 Certificates and the
expiration of the term of the Certificate Insurance Policy, surrender the
Certificate Insurance Policy to the Certificate Insurer for cancellation.

                  (h) The Trustee shall hold the Certificate Insurance Policy in
trust as agent for the Holders of the Class A-1 Certificates for the purpose of
making claims thereon and distributing the proceeds thereof. Neither the
Certificate Insurance Policy nor the amounts paid on the Certificate Insurance
Policy shall constitute part of the Trust Fund created by this Agreement. Each
Holder of Class A-1 Certificates, by accepting its Class A-1 Certificates,
appoints the Securities Administrator as attorney-in-fact for the purpose of
making claims on the Certificate Insurance Policy.

                                      128
<PAGE>

                  SECTION 5.08. Effect of Payments by the Certificate Insurer;
Subrogation.

                  Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on the Class A-1 Certificates which is
made with moneys received pursuant to the terms of the Certificate Insurance
Policy shall not be considered payment of the Class A-1 Certificates from the
Trust Fund. The Depositor, the Master Servicer and the Trustee acknowledge, and
each Holder by its acceptance of a Class A-1 Certificate agrees, that without
the need for any further action on the part of the Certificate Insurer, the
Depositor, the Master Servicer, the Trustee or the Certificate Registrar (a) to
the extent the Certificate Insurer makes payments, directly or indirectly, on
account of principal of or interest on the Class A-1 Certificates to the Holders
of such Class of Certificates, the Certificate Insurer shall be fully subrogated
to, and each such Certificateholder, the Master Servicer and the Trustee hereby
delegate and assign to the Certificate Insurer, to the fullest extent permitted
by law, the rights of such Holders to receive such principal and interest (in
the manner and order of priority in relation to other Classes of Certificates as
is set forth in this Agreement) from the Trust Fund, and (b) the Certificate
Insurer shall be paid such amounts from the sources and in the manner provided
herein for the payment of such amounts and as provided in this Agreement until
full reimbursement of all Insured Payments (together with interest thereon at
the Pass-Through Rate from the date paid by the Certificate Insurer until the
date of reimbursement thereof). The Trustee and the Master Servicer shall
cooperate in all respects with any reasonable request by the Certificate Insurer
for action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Holders of the Insured Certificates as otherwise set forth herein.

                                      129
<PAGE>

                                   ARTICLE VI

                                THE CERTIFICATES

                  SECTION 6.01. The Certificates.

                  (a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I.

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

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

                  (b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Securities Administrator except to another Depository that
agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall only transfer the Ownership Interests in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures. The Securities Administrator is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and, if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Servicer and, if the Trustee is not the
Book-Entry Custodian, the Trustee, any other transfer agent (including the

                                      130
<PAGE>

Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Securities
Administrator resigns or is removed in accordance with the terms hereof, the
successor Securities Administrator or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.

                  (c) The Class B Certificates initially offered and sold in
offshore transactions in reliance on Regulation S shall be issued in the form of
a temporary global certificate in definitive, fully registered form (each, a
"Regulation S Temporary Global Certificate"), which shall be deposited with the
Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository for the account of designated agents holding on behalf of
Euroclear or Clearstream. Beneficial interests in each Regulation S Temporary
Global Certificate may be held only through Euroclear or Clearstream; provided,
however, that such interests may be exchanged for interests in a Definitive
Certificate in accordance with the requirements described in Section 6.02. After
the expiration of the Release Date, a beneficial interest in a Regulation S
Temporary Global Certificate may be exchanged for a beneficial interest in the
related permanent global certificate of the same Class (each, a "Regulation S
Permanent Global Certificate"), in accordance with the procedures set forth in
Section 6.02. Each Regulation S Permanent Global Certificate shall be deposited
with the Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.

                  The Class B Certificates offered and sold to Qualified
Institutional Buyers ("QIBs") in reliance on Rule 144A under the Securities Act
("Rule 144A") or institutional investors that are accredited investors within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act ("Institutional Accredited Investors") will be issued in the form
of Definitive Certificates.

                  (d) The Class CE and Class P Certificates offered and sold to
Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act ("Rule 144A") will be issued in the form of Definitive
Certificates.

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

                                      131
<PAGE>

Administrator may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.

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

                  SECTION 6.02. Registration of Transfer and Exchange of
Certificates.

                  (a) The Securities Administrator shall cause to be kept at one
of the offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.

                  (b) No transfer of any Class B Certificate, Class CE
Certificate, Class P Certificate or Residual Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and effective registration
or qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Class B Certificate, Class CE Certificate, Class
P Certificate or Residual Certificate is to be made without registration or
qualification (other than in connection with the initial

                                      132
<PAGE>

transfer of any such Certificate by the Depositor), the Securities Administrator
shall require receipt of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-1; (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-2; (iii) if such transfer is purportedly being made in
reliance on Regulation S, a written certification from the prospective
transferee, substantially in the form attached hereto as Exhibit B-1 and (iv) in
all other cases, an Opinion of Counsel satisfactory to the Securities
Administrator that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Master Servicer, the Securities
Administrator or the Servicer), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the 1933 Act or any other securities laws or to take any action not otherwise
required under this Agreement to permit the transfer of such Certificates
without registration or qualification. Any Certificateholder desiring to effect
the transfer of any such Certificate shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Master Servicer, the Securities Administrator
and the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

                  A holder of a beneficial interest in a Regulation S Temporary
Global Certificate must provide Euroclear or Clearstream, as the case may be,
with a certificate in the form of Annex A to Exhibit B-1 hereto certifying that
the beneficial owner of the interest in such Global Certificate is not a U.S.
Person (as defined in Regulation S), and Euroclear or Clearstream, as the case
may be, must provide to the Trustee and Securities Administrator a certificate
in the form of Exhibit B-1 hereto prior to (i) the payment of interest or
principal with respect to such holder's beneficial interest in the Regulation S
Temporary Global Certificate and (ii) any exchange of such beneficial interest
for a beneficial interest in a Regulation S Permanent Global Certificate.

                  (c) No transfer of a Class CE Certificate, Class P Certificate
or a Residual Certificate or any interest therein shall be made to any Plan
subject to ERISA or Section 4975 of the Code, any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "Plan Assets" of a Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the
Securities Administrator is provided with an Opinion of Counsel on which the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Servicer may rely, which establishes to the satisfaction of the Securities
Administrator that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor, the
Servicer, the Trustee, the Master Servicer, the Securities Administrator or the
Trust Fund to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Depositor,
the Servicer, the Trustee, the Master Servicer, the Securities Administrator,
the Trust Fund. An Opinion of Counsel will not be required in connection with
the initial transfer of any such Certificate by the Depositor to an affiliate of
the Depositor (in which case, the Depositor or

                                      133
<PAGE>

any affiliate thereof shall have deemed to have represented that such affiliate
is not a Plan or a Person investing Plan Assets) and the Securities
Administrator shall be entitled to conclusively rely upon a representation
(which, upon the request of the Securities Administrator, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.

                  Each Transferee of a Mezzanine Certificate or Class B
Certificate will be deemed to have represented by virtue of its purchase or
holding of such Certificate (or interest therein) that either (a) such
Transferee is not a Plan or purchasing such Certificate with Plan Assets, (b) it
has acquired and is holding such Certificate in reliance on Prohibited
Transaction Exemption ("PTE") 94-84 or FAN 97-03E, as amended by PTE 97-34, 62
Fed. Reg. 39021 (July 21, 1997), PTE 2000-58, 65 Fed. Reg. 67765 (November 13,
2000) and PTE 2002-41, 67 Fed. Reg. 54487 (August 22, 2002) (the "Exemption"),
and that it understands that there are certain conditions to the availability of
the Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by a Rating Agency and in
the case of a Class B Certificate that it will obtain a representation from any
transferee that such transferee is an accredited investor so long as it is
required to obtain a representation regarding compliance with the Securities Act
or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in PTCE 95-60, and (iii) the conditions set forth in Sections I and III
of PTCE 95-60 have been satisfied.

                  If any Certificate or any interest therein is acquired or held
in violation of the conditions described in this Section 6.02(c), the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding of
any certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, the Servicer, the Master Servicer, the Securities
Administrator and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.

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

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

                           (B) In connection with any proposed Transfer of any
                  Ownership Interest in a Residual Certificate, the Trustee
                  shall require delivery to it, and shall not register the
                  Transfer of any Residual Certificate until its receipt of, an

                                      134
<PAGE>

                  affidavit and agreement (a "Transfer Affidavit and Agreement,"
                  in the form attached hereto as Exhibit B-3) from the proposed
                  Transferee, in form and substance satisfactory to the
                  Securities Administrator, representing and warranting, among
                  other things, that such Transferee is a Permitted Transferee,
                  that it is not acquiring its Ownership Interest in the
                  Residual Certificate that is the subject of the proposed
                  Transfer as a nominee, trustee or agent for any Person that is
                  not a Permitted Transferee, that for so long as it retains its
                  Ownership Interest in a Residual Certificate, it will endeavor
                  to remain a Permitted Transferee, and that it has reviewed the
                  provisions of this Section 6.02(d) and agrees to be bound by
                  them.

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

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

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

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

                           (iii) (A) If any purported Transferee shall become a
         Holder of a Residual Certificate in violation of the provisions of this
         Section 6.02(d), then the last preceding Permitted Transferee shall be
         restored, to the extent permitted by law, to all rights as holder
         thereof retroactive to the date of registration of such Transfer of
         such Residual Certificate. The Securities Administrator shall be under
         no liability to any Person for any registration of Transfer of a
         Residual Certificate that is in fact not

                                      135
<PAGE>

         permitted by this Section 6.02(d) or for making any payments due on
         such Certificate to the holder thereof or for taking any other action
         with respect to such holder under the provisions of this Agreement.

                           (B) If any purported Transferee shall become a holder
                  of a Residual Certificate in violation of the restrictions in
                  this Section 6.02(d) and to the extent that the retroactive
                  restoration of the rights of the holder of such Residual
                  Certificate as described in clause (iii)(A) above shall be
                  invalid, illegal or unenforceable, then the Securities
                  Administrator shall have the right, without notice to the
                  holder or any prior holder of such Residual Certificate, to
                  sell such Residual Certificate to a purchaser selected by the
                  Securities Administrator on such terms as the Securities
                  Administrator may choose. Such purported Transferee shall
                  promptly endorse and deliver each Residual Certificate in
                  accordance with the instructions of the Securities
                  Administrator. Such purchaser may be the Securities
                  Administrator itself or any Affiliate of the Securities
                  Administrator. The proceeds of such sale, net of the
                  commissions (which may include commissions payable to the
                  Securities Administrator or its Affiliates), expenses and
                  taxes due, if any, will be remitted by the Securities
                  Administrator to such purported Transferee. The terms and
                  conditions of any sale under this clause (iii)(B) shall be
                  determined in the sole discretion of the Securities
                  Administrator, and the Securities Administrator shall not be
                  liable to any Person having an Ownership Interest in a
                  Residual Certificate as a result of its exercise of such
                  discretion.

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

                           (v) The provisions of this Section 6.02(d) set forth
         prior to this subsection (v) may be modified, added to or eliminated,
         provided that there shall have been delivered to the Securities
         Administrator at the expense of the party seeking to modify, add to or
         eliminate any such provision the following:

                           (A) written notification from each Rating Agency to
                  the effect that the modification, addition to or elimination
                  of such provisions will not cause such Rating Agency to
                  downgrade its then-current ratings of any Class of
                  Certificates (and with respect to the Insured Certificates,
                  without regard to the Certificate Insurance Policy); and

                                      136
<PAGE>

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

                  (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Securities
Administrator maintained for such purpose pursuant to Section 9.11. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver, the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Securities
Administrator) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Securities Administrator duly executed
by, the Holder thereof or his attorney duly authorized in writing.

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

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

                  SECTION 6.03. Mutilated, Destroyed, Lost or Stolen
Certificates.

                  If (i) any mutilated Certificate is surrendered to the
Securities Administrator, or the Securities Administrator receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof, and (ii) there is delivered to Securities Administrator such
security or indemnity as may be required by it to save it harmless, then, in the
absence of actual knowledge by the Securities Administrator that such
Certificate has been acquired by a protected purchaser, the Securities
Administrator, shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC

                                      137
<PAGE>

created hereunder, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

                  SECTION 6.04. Persons Deemed Owners.

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

                  SECTION 6.05. Certain Available Information.

                  On or prior to the date of the first sale of any Class B,
Class CE Certificate, Class P Certificate or Residual Certificate to an
Independent third party, the Depositor shall provide to the Securities
Administrator ten copies of any private placement memorandum or other disclosure
document used by the Depositor in connection with the offer and sale of such
Certificate. In addition, if any such private placement memorandum or disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Securities Administrator, the Depositor promptly shall inform the
Securities Administrator of such event and shall deliver to the Securities
Administrator ten copies of the private placement memorandum or disclosure
document, as revised, amended or supplemented. The Securities Administrator
shall maintain at its office as set forth in Section 12.05 hereof and shall make
available free of charge during normal business hours for review by any Holder
of a Certificate or any Person identified to the Securities Administrator as a
prospective transferee of a Certificate, originals or copies of the following
items: (i) in the case of a Holder or prospective transferee of a Class B, Class
CE Certificate, Class P Certificate or Residual Certificate, the related private
placement memorandum or other disclosure document relating to such Class of
Certificates, in the form most recently provided to the Securities
Administrator; and (ii) in all cases, (A) this Agreement and any amendments
hereof entered into pursuant to Section 11.01, (B) all monthly statements
required to be delivered to Certificateholders of the relevant Class pursuant to
Section 4.02 since the Closing Date, and all other notices, reports, statements
and written communications delivered to the Certificateholders of the relevant
Class pursuant to this Agreement since the Closing Date and (C) any copies of
all Officers' Certificates of the Servicer since the Closing Date delivered to
the Master Servicer to evidence such Person's determination that any P&I Advance
or Servicing Advance was, or if made, would be a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance. Copies and mailing of any and all of the
foregoing items will be available from the Securities Administrator upon request
at the expense of the Person requesting the same.

                  SECTION 6.06. Rights of the Certificate Insurer to Exercise
Rights of Class A-1 Certificateholders.

                  (a) By accepting its Certificate, each Class A-1
Certificateholder agrees that, unless a Certificate Insurer Default exists, the
Certificate Insurer shall be deemed to be the Class A-1 Certificateholders for
all purposes (other than with respect to the receipt of payment on such Classes
of Certificates except payments with respect to which the Certificate Insurer
has subrogation rights as set forth herein) and shall have the right to exercise
all rights of such

                                      138
<PAGE>

Certificateholders under this Agreement and under the Class A-1 Certificates
without any further consent of such Certificateholders.

                  (b) All notices, statement reports, certificates or opinions
required by this Agreement to be sent to any Class A-1 Certificateholder shall
also be sent to the Certificate Insurer.

                  (c) On the Distribution Date immediately after the expiration
of the Term of the Certificate Insurance Policy (as such term is defined in the
Certificate Insurance Policy) or (y) during the occurrence of a Certificate
Insurer Default (until such time as it has been cured), the rights, consents and
notifications granted to the Certificate Insurer in this Agreement shall be
extinguished.

                  SECTION 6.07. Certificate Insurer Default.

                  Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if (i) a Certificate Insurer Default exists and is
continuing or (ii) if and to the extent the Certificate Insurer has delivered
its written renunciation of all of its rights under this Agreement, all
provisions of this Agreement which (a) permit the Certificate Insurer to
exercise rights of the Class A-1 Certificateholders, (b) restrict the ability of
the Certificateholders, the Master Servicer or the Trustee to act without the
consent or approval of the Certificate Insurer, (c) provide that a particular
act or thing must be acceptable to the Certificate Insurer, (d) permit the
Certificate Insurer to direct (or otherwise to require) the actions of the
Trustee, the Master Servicer or the Certificateholders, (e) provide that any
action or omission taken with the consent, approval or authorization of the
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) have a
similar effect, shall be of no further force and effect and the Trustee shall
administer the Trust Fund and perform its obligations hereunder solely for the
benefit of the Holders of the Certificates. Nothing in the foregoing sentence,
nor any action taken pursuant thereto or in compliance therewith, shall be
deemed (x) to have released the Certificate Insurer from any obligation or
liability it may have to any party or to the Class A-1 Certificateholders
hereunder, under any other agreement, instrument or document (including, without
limitation, the Certificate Insurance Policy) or under applicable law or (y) to
have terminated (1) the Certificate Insurer's right to receive Reimbursement
Amounts under this Agreement or its subrogation to the rights of the Holders of
the Class A-1 Certificates under this Agreement or the Certificate Insurance
Policy, (2) the Certificate Insurer's right to receive reports and distributions
as described in this Agreement or (3) the requirement that the Certificate
Insurer approve any amendments to this Agreement that would adversely affect the
aforementioned rights. At such time as the Class A-1 Certificates are no longer
outstanding hereunder, and no amounts owed to the Certificate Insurer hereunder
with respect to the Class A-1 Certificates remain unpaid, the Certificate
Insurer's rights hereunder shall terminate.

                                      139
<PAGE>

                                  ARTICLE VII

               THE DEPOSITOR, THE SERVICER AND THE MASTER SERVICER

                  SECTION 7.01. Liability of the Depositor, the Servicer and the
Master Servicer.

                  The Depositor, the Servicer and the Master Servicer each shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement upon them in their respective capacities
as Depositor, Servicer and Master Servicer and undertaken hereunder by the
Depositor, the Servicer and the Master Servicer herein.

                  SECTION 7.02. Merger or Consolidation of the Depositor, the
Servicer or the Master Servicer.

                  Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Servicer will keep in full effect its existence, rights and franchises as a
federally chartered savings bank. Subject to the following paragraph, the Master
Servicer will keep in full effect its existence, rights and franchises as a
national banking association. The Depositor, the Servicer and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.

                  The Depositor, the Servicer or the Master Servicer may be
merged or consolidated with or into any Person, or transfer all or substantially
all of its assets to any Person, in which case any Person resulting from any
merger or consolidation to which the Depositor, the Servicer or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Servicer or the Master Servicer, shall be the successor of the
Depositor, the Servicer or the Master Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that any successor of the Servicer or the Master Servicer
shall meet the eligibility requirements set forth in clauses (i) and (iii) of
the last paragraph of Section 8.02(a) or Section 7.06, as applicable.

                  SECTION 7.03. Limitation on Liability of the Depositor, the
Servicer, the Master Servicer and Others.

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

                                      140
<PAGE>

the performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Servicer, the Securities Administrator, the
Master Servicer and any director, officer, employee or agent of the Depositor,
the Servicer, the Securities Administrator and the Master Servicer may rely in
good faith on any document of any kind which, prima facie, is properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor, the Servicer, the Securities Administrator, the Master Servicer and
any director, officer, employee or agent of the Depositor, the Servicer, the
Securities Administrator or the Master Servicer shall be indemnified and held
harmless by the Trust Fund against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement, the Certificates or
any Credit Risk Management Agreement or any loss, liability or expense incurred
other than by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Servicer, the
Securities Administrator or the Master Servicer shall be under any obligation to
appear in, prosecute or defend any legal action unless such action is related to
its respective duties under this Agreement and, in its opinion, does not involve
it in any expense or liability; provided, however, that each of the Depositor,
the Servicer, the Securities Administrator and the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor, the Servicer, the
Securities Administrator and the Master Servicer shall be entitled to be
reimbursed therefor from the Collection Account or the Distribution Account as
and to the extent provided in Article III and Article IV, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account and the Distribution Account.

                  Notwithstanding anything to the contrary contained herein, the
Servicer shall not be liable for any actions or inactions prior to the Cut-off
Date of any prior servicer of the Mortgage Loans and the Master Servicer shall
not be liable for any action or inaction of the Servicer, except to the extent
expressly provided herein, or the Credit Risk Management Agreement.

                  SECTION 7.04. Limitation on Resignation of the Servicer.

                  (a) Except as expressly provided herein, the Servicer shall
neither assign all or substantially all of its rights under this Agreement or
the servicing hereunder nor delegate all or substantially all of its duties
hereunder nor sell or otherwise dispose of all or substantially all of its
property or assets without, in each case, the prior written consent of the
Master Servicer and the Certificate Insurer, which consent shall not be
unreasonably withheld; provided, that in each case, there must be delivered to
the Trustee and the Master Servicer a letter from each Rating Agency to the
effect that such transfer of servicing or sale or disposition of assets will not
result in a qualification, withdrawal or downgrade of the then-current rating of
any of the Certificates (and with respect to the Insured Certificates, without
regard to the Certificate Insurance Policy). Notwithstanding the foregoing, the
Servicer, without the consent of the Trustee or the Master Servicer, may retain
third-party contractors to perform certain servicing and loan administration

                                      141
<PAGE>

functions, including without limitation hazard insurance administration, tax
payment and administration, flood certification and administration, collection
services and similar functions, provided, however, that the retention of such
contractors by the Servicer shall not limit the obligation of the Servicer to
service the Mortgage Loans pursuant to the terms and conditions of this
Agreement. The Servicer shall not resign from the obligations and duties hereby
imposed on it except by consent of the Master Servicer or upon determination
that its duties hereunder are no longer permissible under applicable law or as
provided in Section 7.04(c). Any such determination pursuant to the preceding
sentence permitting the resignation (other than pursuant to Section 7.04(c)) of
the Servicer shall be evidenced by an Opinion of Counsel to such effect obtained
at the expense of the Servicer and delivered to the Trustee and the Rating
Agencies. No resignation of the Servicer shall become effective until the Master
Servicer or a successor Servicer shall have assumed the Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.

                  (b) Except as expressly provided herein, the Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Servicer hereunder. The foregoing prohibition on assignment
shall not prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however,
that as provided in Section 3.02, no Sub-Servicer shall be a third-party
beneficiary hereunder and the parties hereto shall not be required to recognize
any Sub-Servicer as an indemnitee under this Agreement.

                  (c) Notwithstanding anything to the contrary herein, the
Servicer may pledge or assign as collateral all its rights, title and interest
under this Agreement to a lender (the "Lender"), provided, that:

                  (1) upon an Event of Default and receipt of a notice of
                  termination by the Servicer, the Lender may direct the
                  Servicer or its designee to appoint a successor Servicer
                  pursuant to the provisions, and subject to the conditions, set
                  forth in Section 8.02 regarding the Servicer's appointment of
                  a successor Servicer;

                  (2) the Lender's rights are subject to this Agreement; and

                  (3) the Servicer shall remain subject to termination as
                  servicer under this Agreement pursuant to the terms hereof.

                  SECTION 7.05. Limitation on Resignation of the Master
Servicer.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination pursuant
to the preceding sentence permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel to such effect obtained at the
expense of the Master Servicer and delivered to the Trustee and the Rating
Agencies. No resignation of the Master Servicer shall become effective until the
Trustee or a successor Master Servicer meeting the criteria specified in Section
7.06 shall have assumed the

                                      142
<PAGE>

Master Servicer's responsibilities, duties, liabilities (other than those
liabilities arising prior to the appointment of such successor) and obligations
under this Agreement.

                  SECTION 7.06. Assignment of Master Servicing.

                  The Master Servicer may sell and assign its rights and
delegate its duties and obligations in its entirety as Master Servicer under
this Agreement; provided, however, that: (i) the purchaser or transferee accept
in writing such assignment and delegation and assume the obligations of the
Master Servicer hereunder (a) shall have a net worth of not less than
$15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (b) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee) and the Certificate Insurer; and (c) shall
execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by it as master servicer under this
Agreement, any custodial agreement from and after the effective date of such
agreement; (ii) each Rating Agency shall be given prior written notice of the
identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning and selling the master servicing shall deliver to the
Trustee an officer's certificate and an Opinion of Independent counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising out of acts or omissions prior to the effective date
thereof.

                  SECTION 7.07. Rights of the Depositor in Respect of the
Servicer and the Master Servicer.

                  Each of the Master Servicer and the Servicer shall afford (and
any Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford)
the Depositor and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer or the Servicer
(and any such Sub-Servicer) in respect of the Servicer's rights and obligations
hereunder and access to officers of the Master Servicer or the Servicer (and
those of any such Sub-Servicer) responsible for such obligations, and the Master
Servicer shall have access to all such records maintained by the Servicer and
any Sub-Servicers. Upon request, each of the Master Servicer and the Servicer
shall furnish to the Depositor and the Trustee its (and any such Sub-Servicer's)
most recent financial statements and such other information relating to the
Master Servicer's or the Servicer's capacity to perform its obligations under
this Agreement as it possesses (and that any such Sub-Servicer possesses). To
the extent such information is not otherwise available to the public, the
Depositor and the Trustee shall not disseminate any information obtained
pursuant to the preceding two sentences without the Master Servicer's or the
Servicer's written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) to its legal counsel, auditors,
taxing authorities or other governmental agencies and the Certificateholders,
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor and the Trustee or the Trust Fund, and in any case, the Depositor or
the Trustee, (iii)

                                      143
<PAGE>

disclosure of any and all information that is or becomes publicly known, or
information obtained by the Trustee from sources other than the Depositor, the
Servicer or the Master Servicer, (iv) disclosure as required pursuant to this
Agreement or (v) disclosure of any and all information (A) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Agreement approved in advance
by the Depositor, the Servicer or the Master Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Trustee
having a need to know the same, provided that the Trustee advises such recipient
of the confidential nature of the information being disclosed, shall use its
best efforts to assure the confidentiality of any such disseminated non-public
information. Nothing in this Section 7.07 shall limit the obligation of the
Servicer to comply with any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 7.07 as a result of such obligation shall not
constitute a breach of this Section. Nothing in this Section 7.07 shall require
the Servicer to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. The Servicer shall
not be required to make copies of or ship documents to any party unless
provisions have been made for the reimbursement of the costs thereof. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer and the Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer or the Servicer under this Agreement or exercise the rights of the
Master Servicer or the Servicer under this Agreement; provided that neither the
Master Servicer nor the Servicer shall be relieved of any of its obligations
under this Agreement by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer or the Servicer and is not
obligated to supervise the performance of the Master Servicer or the Servicer
under this Agreement or otherwise.

                  SECTION 7.08. Duties of the Credit Risk Manager.

                  For and on behalf of the Depositor, the Credit Risk Manager
will provide reports and recommendations concerning certain delinquent and
defaulted Mortgage Loans, and as to the collection of any Prepayment Charges
with respect to the Mortgage Loans. Such reports and recommendations will be
based upon information provided to the Credit Risk Manager pursuant to the
Credit Risk Management Agreements, and the Credit Risk Manager shall look solely
to the Servicer and/or Master Servicer for all information and data (including
loss and delinquency information and data) relating to the servicing of the
related Mortgage Loans. Upon any termination of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Depositor shall give written
notice thereof to the Servicer, the Master Servicer, the Securities
Administrator, the Trustee, and each Rating Agency. Notwithstanding the
foregoing, the termination of the Credit Risk Manager pursuant to this Section
shall not become effective until the appointment of a successor Credit Risk
Manager.

                  SECTION 7.09. Limitation Upon Liability of the Credit Risk
Manager.

                  Neither the Credit Risk Manager, nor any of its directors,
officers, employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer under the related Credit Risk
Management Agreement, or for errors in judgment; provided, however, that this
provision shall

                                      144
<PAGE>

not protect the Credit Risk Manager or any such person against liability that
would otherwise be imposed by reason of willful malfeasance or bad faith in its
performance of its duties. The Credit Risk Manager and any director, officer,
employee, or agent of the Credit Risk Manager may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder, and may rely in good faith upon the
accuracy of information furnished by the Servicer pursuant to the related Credit
Risk Management Agreement in the performance of its duties thereunder and
hereunder.

                  SECTION 7.10. Removal of the Credit Risk Manager.

                  The Credit Risk Manager may be removed as Credit Risk Manager
by Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust Fund, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager, with a copy to
the Securities Administrator and the Master Servicer.

                                      145
<PAGE>

                                  ARTICLE VIII

                                     DEFAULT

                  SECTION 8.01. Servicer Events of Default.

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

                           (i) any failure by the Servicer to remit to the
         Securities Administrator for distribution to the Certificateholders any
         payment (other than a P&I Advance required to be made from its own
         funds on any Servicer Remittance Date pursuant to Section 5.03)
         required to be made under the terms of the Certificates and this
         Agreement which continues unremedied for a period of one Business Day
         after the date upon which written notice of such failure, requiring the
         same to be remedied, shall have been given to the Servicer by the
         Depositor or the Trustee (in which case notice shall be provided by
         telecopy), or to the Servicer, the Depositor, the Trustee and by the
         Holders of Certificates entitled to at least 25% of the Voting Rights;
         or

                           (ii) any failure on the part of the Servicer duly to
         observe or perform in any material respect any other of the covenants
         or agreements on the part of the Servicer contained in this Agreement,
         or the material breach by the Servicer of any representation and
         warranty contained in Section 2.05, which continues unremedied for a
         period of 30 days after the date on which written notice of such
         failure, requiring the same to be remedied, shall have been given to
         the Servicer by the Depositor or the Trustee or to the Servicer, the
         Depositor and the Trustee by the Holders of Certificates entitled to at
         least 25% of the Voting Rights; provided, however, that in the case of
         a failure that cannot be cured within thirty (30) days, the cure period
         may be extended for an additional thirty (30) days if the Servicer can
         demonstrate to the reasonable satisfaction of the Trustee that the
         Servicer is diligently pursuing remedial action; or

                           (iii) a decree or order of a court or agency or
         supervisory authority having jurisdiction in the premises in an
         involuntary case under any present or future federal or state
         bankruptcy, insolvency or similar law or the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceeding,
         or for the winding-up or liquidation of its affairs, shall have been
         entered against the Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 90 days; or

                           (iv) the Servicer shall consent to the appointment of
         a conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceedings
         of or relating to it or of or relating to all or substantially all of
         its property; or

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

                                      146
<PAGE>

                           (vi) failure by the Servicer to duly perform, within
         the required time period, its obligations under Section 3.17, 3.18 or
         3.19 which failure continues unremedied for a period of ten (10) days
         after the date on which written notice of such failure, requiring the
         same to be remedied, shall have been given to the Servicer by any party
         to this Agreement; or

                           (vii) any failure of the Servicer to make any P&I
         Advance on any Servicer Remittance Date required to be made from its
         own funds pursuant to Section 5.03 which continues unremedied until
         3:00 p.m. New York time on the Business Day immediately following the
         Servicer Remittance Date.

                  If a Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as such Servicer Event of Default shall not have been remedied, the
Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the Servicer (and to the Depositor if given by the Trustee
or to the Trustee if given by the Depositor) with a copy to the Master Servicer
and each Rating Agency, terminate all of the rights and obligations of the
Servicer in its capacity as the Servicer under this Agreement, to the extent
permitted by law, and in and to the Mortgage Loans and the proceeds thereof. If
a Servicer Event of Default described in clause (vii) hereof shall occur, the
Trustee shall, by notice in writing to the Servicer, the Depositor and the
Master Servicer, terminate all of the rights and obligations of the Servicer in
its capacity as the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof. Subject to Section 8.02, on or after the receipt
by the Servicer of such written notice, all authority and power of the Servicer
under this Agreement, whether with respect to the Certificates (other than as a
Holder of any Certificate) or the Mortgage Loans or otherwise, shall pass to and
be vested in the Master Servicer pursuant to and under this Section, and,
without limitation, the Master Servicer is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Servicer, any and all documents and other instruments and to do
or accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Servicer agrees promptly (and in any event no later than ten
Business Days subsequent to such notice) to provide the Master Servicer with all
documents and records requested by it to enable it to assume the Servicer's
functions under this Agreement, and to cooperate with the Master Servicer in
effecting the termination of the Servicer's responsibilities and rights under
this Agreement, including, without limitation, the transfer within one Business
Day to the Master Servicer for administration by it of all cash amounts which at
the time shall be or should have been credited by the Servicer to the Collection
Account held by or on behalf of the Servicer or thereafter be received with
respect to the Mortgage Loans or any REO Property (provided, however, that the
Servicer shall continue to be entitled to receive all amounts accrued or owing
to it under this Agreement on or prior to the date of such termination, whether
in respect of P&I Advances, Servicing Advances, accrued and unpaid Servicing
Fees or otherwise, and shall continue to be entitled to the benefits of Section
7.03, notwithstanding any such termination, with respect to events occurring
prior to such termination). For purposes of this Section 8.01(a), the Trustee
shall not be deemed to have knowledge of a Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Servicer Event of Default is received by the
Trustee at its Corporate Trust Office

                                      147
<PAGE>

and such notice references the Certificates, the Trust or this Agreement. The
Trustee shall promptly notify the Master Servicer and the Rating Agencies of the
occurrence of a Servicer Event of Default of which it has knowledge as provided
above.

                  The Master Servicer shall be entitled to be reimbursed by the
Servicer (or from amounts on deposit in the Distribution Account if the Servicer
is unable to fulfill its obligations hereunder) for all reasonable out-of-pocket
or third party costs associated with the transfer of servicing from the
predecessor Servicer (or if the predecessor Servicer is the Master Servicer,
from the Servicer immediately preceding the Master Servicer), including without
limitation, any reasonable out-of-pocket or third party costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Master Servicer to correct any errors or insufficiencies in the servicing data
or otherwise to enable the Master Servicer to service the Mortgage Loans
properly and effectively, upon presentation of reasonable documentation of such
costs and expenses.

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

                           (i) any failure on the part of the Master Servicer
         duly to observe or perform in any material respect any other of the
         covenants or agreements on the part of the Master Servicer contained in
         this Agreement, or the breach by the Master Servicer of any
         representation and warranty contained in Section 2.04, which continues
         unremedied for a period of 30 days after the date on which written
         notice of such failure, requiring the same to be remedied, shall have
         been given to the Master Servicer by the Depositor or the Trustee or to
         the Master Servicer, the Depositor and the Trustee by the Holders of
         Certificates entitled to at least 25% of the Voting Rights; or

                           (ii) a decree or order of a court or agency or
         supervisory authority having jurisdiction in the premises in an
         involuntary case under any present or future federal or state
         bankruptcy, insolvency or similar law or the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceeding,
         or for the winding-up or liquidation of its affairs, shall have been
         entered against the Master Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 90 days; or

                           (iii) the Master Servicer shall consent to the
         appointment of a conservator or receiver or liquidator in any
         insolvency, readjustment of debt, marshalling of assets and liabilities
         or similar proceedings of or relating to it or of or relating to all or
         substantially all of its property; or

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

                  If a Master Servicer Event of Default shall occur, then, and
in each and every such case, so long as such Master Servicer Event of Default
shall not have been remedied, the Depositor or the Trustee may, and at the
written direction of the Holders of Certificates entitled to at least 51% of
Voting Rights, the Trustee shall, by notice in writing to the Master Servicer

                                      148
<PAGE>

(and to the Depositor if given by the Trustee or to the Trustee if given by the
Depositor) with a copy to each Rating Agency, terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates (other than as a Holder of
any Certificate) or the Mortgage Loans or otherwise including, without
limitation, the compensation payable to the Master Servicer under this
Agreement, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees promptly (and in any
event no later than ten Business Days subsequent to such notice) to provide the
Trustee with all documents and records requested by it to enable it to assume
the Master Servicer's functions under this Agreement, and to cooperate with the
Trustee in effecting the termination of the Master Servicer's responsibilities
and rights under this Agreement (provided, however, that the Master Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination and shall
continue to be entitled to the benefits of Section 7.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
For purposes of this Section 8.01(b), the Trustee shall not be deemed to have
knowledge of a Master Servicer Event of Default unless a Responsible Officer of
the Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Event of Default is received by the Trustee and such
notice references the Certificates, the Trust or this Agreement. The Trustee
shall promptly notify the Rating Agencies of the occurrence of a Master Servicer
Event of Default of which it has knowledge as provided above.

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

                  SECTION 8.02. Master Servicer to Act; Appointment of
Successor.

                  (a) On and after the time the Servicer receives a notice of
termination, the Master Servicer shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement and the transactions
set forth or provided for herein, and all the responsibilities, duties and
liabilities relating thereto and arising thereafter shall be assumed by

                                      149
<PAGE>

the Master Servicer (except for any representations or warranties of the
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03 and the obligation to deposit amounts in respect of
losses pursuant to Section 3.10(b)) by the terms and provisions hereof
including, without limitation, the Servicer's obligations to make P&I Advances
pursuant to Section 5.03; provided, however, that if the Master Servicer is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Master Servicer shall not be
obligated to make P&I Advances pursuant to Section 5.03; and provided further,
that any failure to perform such duties or responsibilities caused by the
Servicer's failure to provide information required by Section 8.01 shall not be
considered a default by the Master Servicer as successor to the Servicer
hereunder; provided, however, that (1) it is understood and acknowledged by the
parties hereto that there will be a period of transition (not to exceed 120
days) before the actual servicing functions can be fully transferred to the
Master Servicer or any successor Servicer appointed in accordance with the
following provisions and (2) any failure to perform such duties or
responsibilities caused by the Servicer's failure to provide information
required by Section 8.01 shall not be considered a default by the Master
Servicer as successor to the Servicer hereunder. As compensation therefor, the
Master Servicer shall be entitled to the Servicing Fee and all funds relating to
the Mortgage Loans to which the Servicer would have been entitled if it had
continued to act hereunder. Notwithstanding the above and subject to the
immediately following paragraph, the Master Servicer may, if it shall be
unwilling to so act, or shall, if it is unable to so act promptly appoint or
petition a court of competent jurisdiction to appoint, a Person that satisfies
the eligibility criteria set forth below as the successor to the Servicer under
this Agreement in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer under this Agreement.

                  Notwithstanding any provision in this Agreement to the
contrary, for a period of 30 days following the date on which the Servicer shall
have received a notice of termination pursuant to Section 8.01, the Servicer or
its designee may appoint a successor Servicer that satisfies the eligibility
criteria of a successor Servicer set forth below, which appointment shall be
subject to the consent of the Depositor, the Seller, the Master Servicer, and
the Trustee, which consent shall not be unreasonably withheld or delayed;
provided that such successor Servicer agrees to fully effect the servicing
transfer within 120 days following the termination of the Servicer and to make
all P&I Advances that would otherwise be made by the Master Servicer under
Section 8.01 as of the date of such appointment, and to reimburse the Servicer
and/or the Master Servicer for any unreimbursed P&I Advances they have made and
any reimbursable expenses that they may have incurred in connection with this
Section 8.02. Any proceeds received in connection with the appointment of such
successor Servicer shall be the property of the Servicer or its designee. This
30-day period shall terminate immediately (i) at the close of business on the
second Business Day of such 30-day period if (A) the Servicer was terminated
because of an Event of Default described in Section 8.01 (a)(vii) for failing to
make a required P&I Advance, and (B) the Servicer shall have failed to make (or
cause to be made) such P&I Advance, or shall fail to reimburse (or cause to be
reimbursed) the Master Servicer for a P&I Advance made by the Master Servicer,
by the close of business on such second Business Day, or (ii) at the close of
business on the second Business Day following the date (if any) during such
30-day period on which a P&I Advance is due to be made, if the Servicer shall
have failed to make (or caused to be made) such P&I Advance, or the Servicer
shall have failed to reimburse (or cause to be reimbursed) the Master Servicer
for such P&I Advance, by the close of business on such second Business Day.

                                      150
<PAGE>

                  Notwithstanding anything herein to the contrary, in no event
shall the Trustee or the Master Servicer be liable for any Servicing Fee or for
any differential in the amount of the Servicing Fee paid hereunder and the
amount necessary to induce any successor Servicer to act as successor Servicer
under this Agreement and the transactions set forth or provided for herein.

                  Any successor Servicer appointed under this Agreement must (i)
be an established mortgage loan servicing institution that is a Fannie Mae and
Freddie Mac approved seller/servicer, (ii) be approved by each Rating Agency by
a written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates (without regard to the
Certificate Insurance Policy), (iii) have a net worth of not less than
$15,000,000, (iv) be reasonably acceptable to the Certificate Insurer and (v)
assume all the responsibilities, duties or liabilities of the Servicer (other
than liabilities of the Servicer hereunder incurred prior to termination of the
Servicer under Section 8.01 herein) under this Agreement as if originally named
as a party to this Agreement.

                  (b) (1) All servicing transfer costs (including, without
limitation, servicing transfer costs of the type described in Section 8.02(a)
and incurred by the Trustee, the Master Servicer and any successor Servicer
under paragraph (b)(2) below) shall be paid by the terminated Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
or initial Servicer, as applicable, defaults in its obligation to pay such
costs, the successor Servicer, the Master Servicer and the Trustee shall be
entitled to reimbursement therefor from the assets of the Trust Fund.

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

                  SECTION 8.03. Notification to Certificateholders.

                  (a) Upon any termination of the Servicer or the Master
Servicer pursuant to Section 8.01(a) or (b) or any appointment of a successor to
the Servicer or the Master Servicer pursuant to Section 8.02, the Trustee shall
give prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register.

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

                                      151
<PAGE>

                  SECTION 8.04. Waiver of Servicer Events of Default.

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

                                      152
<PAGE>

                                   ARTICLE IX

             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

                  SECTION 9.01. Duties of Trustee and Securities Administrator.

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

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

                  The Trustee shall promptly remit to the Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.

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

                           (i) Prior to the occurrence of a Master Servicer
         Event of Default, and after the curing or waiver of all such Master
         Servicer Events of Default which may have occurred with respect to the
         Trustee and at all times with respect to the Securities Administrator,
         the duties and obligations of the Trustee shall be determined solely by
         the express provisions of this Agreement, neither the Trustee nor the
         Securities Administrator shall be liable except for the performance of
         such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee or the Securities Administrator and, in
         the

                                      153
<PAGE>

         absence of bad faith on the part of the Trustee or the Securities
         Administrator, respectively, the Trustee or the Securities
         Administrator, respectively, may conclusively rely, as to the truth of
         the statements and the correctness of the opinions expressed therein,
         upon any certificates or opinions furnished to the Trustee or the
         Securities Administrator, respectively, that conform to the
         requirements of this Agreement;

                           (ii) Neither the Trustee nor the Securities
         Administrator shall be liable for an error of judgment made in good
         faith by a Responsible Officer or Responsible Officers of the Trustee
         or an officer or officers of the Securities Administrator,
         respectively, unless it shall be proved that the Trustee or the
         Securities Administrator, respectively, was negligent in ascertaining
         the pertinent facts; and

                           (iii) Neither the Trustee nor the Securities
         Administrator shall be liable with respect to any action taken,
         suffered or omitted to be taken by it in good faith in accordance with
         the direction of the Holders of Certificates entitled to at least 25%
         of the Voting Rights relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee or
         the Securities Administrator or exercising any trust or power conferred
         upon the Trustee or the Securities Administrator under this Agreement.

                  SECTION 9.02. Certain Matters Affecting Trustee and Securities
Administrator.

                  (a) Except as otherwise provided in Section 9.01:

                           (i) The Trustee and the Securities Administrator may
         request and rely upon and shall be protected in acting or refraining
         from acting upon any resolution, Officers' Certificate, certificate of
         auditors or any other certificate, statement, instrument, opinion,
         report, notice, request, consent, order, appraisal, bond or other paper
         or document reasonably believed by it to be genuine and to have been
         signed or presented by the proper party or parties;

                           (ii) The Trustee and the Securities Administrator may
         consult with counsel of its selection and any advice of such counsel or
         any Opinion of Counsel shall be full and complete authorization and
         protection in respect of any action taken or suffered or omitted by it
         hereunder in good faith and in accordance with such advice or Opinion
         of Counsel;

                           (iii) Neither the Trustee nor the Securities
         Administrator shall be under any obligation to exercise any of the
         trusts or powers vested in it by this Agreement or to institute,
         conduct or defend any litigation hereunder or in relation hereto at the
         request, order or direction of any of the Certificateholders, pursuant
         to the provisions of this Agreement, unless such Certificateholders
         shall have offered to the Trustee or the Securities Administrator, as
         the case may be, reasonable security or indemnity satisfactory to it
         against the costs, expenses and liabilities which may be incurred
         therein or thereby; nothing contained herein shall, however, relieve
         the Trustee of the obligation, upon the occurrence of a Master Servicer
         Event of Default (which has not been cured or waived), to exercise such
         of the rights and powers vested in it by this Agreement, and to

                                      154
<PAGE>

         use the same degree of care and skill in their exercise as a prudent
         person would exercise or use under the circumstances in the conduct of
         such person's own affairs;

                           (iv) Neither the Trustee nor the Securities
         Administrator shall be liable for any action taken, suffered or omitted
         by it in good faith and believed by it to be authorized or within the
         discretion or rights or powers conferred upon it by this Agreement;

                           (v) Prior to the occurrence of a Master Servicer
         Event of Default hereunder and after the curing or waiver of all Master
         Servicer Events of Default which may have occurred with respect to the
         Trustee and at all times with respect to the Securities Administrator,
         neither the Trustee nor the Securities Administrator shall be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, consent, order, approval, bond or other paper or
         document, unless requested in writing to do so by the Holders of
         Certificates entitled to at least 25% of the Voting Rights; provided,
         however, that if the payment within a reasonable time to the Trustee or
         the Securities Administrator of the costs, expenses or liabilities
         likely to be incurred by it in the making of such investigation is, in
         the opinion of the Trustee or the Securities Administrator, as
         applicable, not reasonably assured to the Trustee or the Securities
         Administrator by such Certificateholders, the Trustee or the Securities
         Administrator, as applicable, may require reasonable indemnity
         satisfactory to it against such expense, or liability from such
         Certificateholders as a condition to taking any such action;

                           (vi) The Trustee may execute any of the trusts or
         powers hereunder or perform any duties hereunder either directly or by
         or through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                           (vii) The Trustee shall not be liable for any loss
         resulting from the investment of funds held in the Collection Account,
         for any loss resulting from the investment of funds held in the Reserve
         Fund or for any loss resulting from the redemption or sale of any such
         investment as therein authorized;

                           (viii) The Trustee shall not be deemed to have notice
         of any default, Master Servicer Event of Default or Servicer Event of
         Default unless a Responsible Officer of the Trustee has actual
         knowledge thereof or unless written notice of any event which is in
         fact such a default is received by a Responsible Officer of the Trustee
         at the Corporate Trust Office of the Trustee, and such notice
         references the Certificates and this Agreement; and

                           (ix) The rights, privileges, protections, immunities
         and benefits given to the Trustee, including, without limitation, its
         right to be indemnified, are extended to, and shall be enforceable by,
         each agent, custodian and other Person employed to act hereunder.

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any

                                      155
<PAGE>

such suit, action or proceeding instituted by the Trustee shall be brought in
its name for the benefit of all the Holders of such Certificates, subject to the
provisions of this Agreement.

                  (c) The Trustee is hereby directed by the Depositor to execute
the Cap Contracts on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap
Contracts, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contracts at
closing shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contracts, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contracts.

                  (d) None of the Securities Administrator, the Master Servicer,
the Servicer, the Seller, the Depositor, the Custodian or the Trustee shall be
responsible for the acts or omissions of the others, it being understood that
this Agreement shall not be construed to render those partners joint venturers
or agents of one another.

                  SECTION 9.03. Trustee and Securities Administrator not Liable
for Certificates or Mortgage Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Securities Administrator, the authentication of the
Securities Administrator on the Certificates, the acknowledgments of the Trustee
contained in Article II and the representations and warranties of the Trustee in
Section 9.12) shall be taken as the statements of the Depositor and neither the
Trustee nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Servicer, other than with respect to the Securities Administrator any
funds held by it or on behalf of the Trustee in accordance with Section 3.23 and
3.24.

                  SECTION 9.04. Trustee and Securities Administrator May Own
Certificates.

                  Each of the Trustee and the Securities Administrator in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates and may transact business with other interested parties and their
Affiliates with the same rights it would have if it were not Trustee or the
Securities Administrator.

                  SECTION 9.05. Fees and Expenses of Trustee and Securities
Administrator.

                  The fees of the Trustee and the Securities Administrator
hereunder and of Wells Fargo under the Custodial Agreement shall be paid in
accordance with a side letter agreement with the Master Servicer and at the sole
expense of the Master Servicer. In addition, the Trustee, the Securities
Administrator, the Custodian and any director, officer, employee or agent of the

                                      156
<PAGE>

Trustee, the Securities Administrator and the Custodian shall be indemnified by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator in connection with any claim or legal action or
any pending or threatened claim or legal action arising out of or in connection
with the acceptance or administration of its respective obligations and duties
under this Agreement, including the Cap Contracts and any and all other
agreements related hereto, other than any loss, liability or expense (i) for
which the Trustee is indemnified by the Master Servicer or any Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator pursuant to Section 11.01(g) or (iii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. The indemnities in this Section 9.05 shall survive
the termination or discharge of this Agreement and the resignation or removal of
the Master Servicer, the Trustee, the Securities Administrator or the Custodian.
Any payment hereunder made by the Master Servicer to the Trustee shall be from
the Master Servicer's own funds, without reimbursement from REMIC I therefor.

                  SECTION 9.06. Eligibility Requirements for Trustee and
Securities Administrator.

                  The Trustee and the Securities Administrator shall at all
times be a corporation or an association (other than the Depositor, the Seller,
the Master Servicer or any Affiliate of the foregoing) organized and doing
business under the laws of any state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 (or a member of a bank holding company whose
capital and surplus is at least $50,000,000) and subject to supervision or
examination by federal or state authority. If such corporation or association
publishes reports of conditions at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published. In case at any time the
Trustee or the Securities Administrator, as applicable, shall cease to be
eligible in accordance with the provisions of this Section, the Trustee or the
Securities Administrator, as applicable, shall resign immediately in the manner
and with the effect specified in Section 9.07.

                                      157
<PAGE>

                  SECTION 9.07. Resignation and Removal of Trustee and
Securities Administrator.

                  The Trustee and the Securities Administrator may at any time
resign and be discharged from the trust hereby created by giving written notice
thereof to the Depositor, to the Master Servicer, to the Securities
Administrator (or the Trustee, if the Securities Administrator resigns) and to
the Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor trustee or successor securities administrator
by written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee or Securities Administrator, as applicable, and to the
successor trustee or successor securities administrator, as applicable. A copy
of such instrument shall be delivered to the Certificateholders, the Trustee,
the Securities Administrator and the Master Servicer by the Depositor. If no
successor trustee or successor securities administrator shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee or Securities Administrator, as the
case may be, may, at the expense of the Trust Fund, petition any court of
competent jurisdiction for the appointment of a successor trustee, successor
securities administrator, Trustee or Securities Administrator, as applicable.

                  If at any time the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of Section 9.06 and
shall fail to resign after written request therefor by the Depositor, or if at
any time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or the Securities Administrator or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee or the Securities Administrator
and appoint a successor trustee or successor securities administrator by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.

                  Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 8.08.

                                      158
<PAGE>

                  Notwithstanding anything to the contrary contained herein, the
Master Servicer and the Securities Administrator shall at all times be the same
Person.

                  SECTION 9.08. Successor Trustee or Securities Administrator.

                  Any successor trustee or successor securities administrator
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Depositor and its predecessor trustee or predecessor securities
administrator an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee or
securities administrator herein. The predecessor trustee or predecessor
securities administrator shall deliver to the successor trustee or successor
securities administrator all Mortgage Loan Documents and related documents and
statements to the extent held by it hereunder, as well as all moneys, held by it
hereunder, and the Depositor and the predecessor trustee or predecessor
securities administrator shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee or successor securities administrator
all such rights, powers, duties and obligations.

                  No successor trustee or successor securities administrator
shall accept appointment as provided in this Section unless at the time of such
acceptance such successor trustee or successor securities administrator shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor trustee or successor securities administrator shall not result in a
downgrading of any Class of Certificates by any Rating Agency, as evidenced by a
letter from each Rating Agency.

                  Upon acceptance of appointment by a successor trustee or
successor securities administrator as provided in this Section, the Depositor
shall mail notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.

                  SECTION 9.09. Merger or Consolidation of Trustee or Securities
Administrator.

                  Any corporation or association into which the Trustee or the
Securities Administrator may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Securities Administrator
shall be a party, or any corporation or association succeeding to the business
of the Trustee or the Securities Administrator shall be the successor of the
Trustee or the Securities Administrator hereunder, provided such corporation or
association shall be eligible under the provisions of Section 8.06, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

                                      159
<PAGE>

                  SECTION 9.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the REMIC I or property securing the same may at the time be located,
the Trustee shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee, or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee or co-trustee.

                  SECTION 9.11. Appointment of Office or Agency.

                  The Certificates may be surrendered for registration of
transfer or exchange at the Securities Administrator's office located at Sixth
and Marquette, Minneapolis, Minnesota 55479, and presented for final
distribution at the Corporate Trust Office of the Securities Administrator

                                      160
<PAGE>

where notices and demands to or upon the Securities Administrator in respect of
the Certificates and this Agreement may be served.

                  SECTION 9.12. Representations and Warranties.

                  The Trustee hereby represents and warrants to the Master
Servicer, the Securities Administrator, the Servicer and the Depositor as
applicable, as of the Closing Date, that:

                           (i) It is a banking corporation duly organized,
         validly existing and in good standing under the laws of the State of
         New York.

                           (ii) The execution and delivery of this Agreement by
         it, and the performance and compliance with the terms of this Agreement
         by it, will not violate its articles of association or bylaws or
         constitute a default (or an event which, with notice or lapse of time,
         or both, would constitute a default) under, or result in the breach of,
         any material agreement or other instrument to which it is a party or
         which is applicable to it or any of its assets.

                           (iii) It has the full power and authority to enter
         into and consummate all transactions contemplated by this Agreement,
         has duly authorized the execution, delivery and performance of this
         Agreement, and has duly executed and delivered this Agreement.

                           (iv) This Agreement, assuming due authorization,
         execution and delivery by the other parties hereto, constitutes a
         valid, legal and binding obligation of it, enforceable against it in
         accordance with the terms hereof, subject to (A) applicable bankruptcy,
         insolvency, receivership, reorganization, moratorium and other laws
         affecting the enforcement of creditors' rights generally, and (B)
         general principles of equity, regardless of whether such enforcement is
         considered in a proceeding in equity or at law.

                           (v) It is not in violation of, and its execution and
         delivery of this Agreement and its performance and compliance with the
         terms of this Agreement will not constitute a violation of, any law,
         any order or decree of any court or arbiter, or any order, regulation
         or demand of any federal, state or local governmental or regulatory
         authority, which violation, in its good faith and reasonable judgment,
         is likely to affect materially and adversely either the ability of it
         to perform its obligations under this Agreement or its financial
         condition.

                           (vi) No litigation is pending or, to the best of its
         knowledge, threatened against it, which would prohibit it from entering
         into this Agreement or, in its good faith reasonable judgment, is
         likely to materially and adversely affect either the ability of it to
         perform its obligations under this Agreement or its financial
         condition.

                                      161
<PAGE>

                                   ARTICLE X

                                   TERMINATION

                  SECTION 10.01. Termination Upon Repurchase or Liquidation of
All Mortgage Loans.

                  (a) Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and
of the Servicer to make remittances to the Securities Administrator and the
Securities Administrator to make payments in respect of the REMIC I Regular
Interests, REMIC I Regular Interests or the Classes of Certificates as
hereinafter set forth) shall terminate upon payment to the Certificateholders
and the deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Terminator (as defined
below) of all Mortgage Loans and each REO Property remaining in REMIC I and (ii)
the final payment or other liquidation (or any advance with respect thereto) of
the last Mortgage Loan or REO Property remaining in REMIC I; provided, however,
that in no event shall the trust created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to the sum of (i) the greater of (A) the aggregate Purchase Price
of all the Mortgage Loans included in REMIC I, plus the appraised value of each
REO Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Terminator and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Terminator and the Trustee, as of the
close of business on the third Business Day next preceding the date upon which
notice of any such termination is furnished to Certificateholders pursuant to
the third paragraph of this Section 10.01) plus (ii) any amounts due the
Servicer and the Master Servicer in respect of unpaid Servicing Fees, Master
Servicing Fees and outstanding P&I Advances and Servicing Advances plus (iii)
any Premium Amounts and Reimbursement Amounts owed to the Certificate Insurer
under this Agreement. If a termination pursuant to this Section 10.01(a) or
Section 10.01(b) will result in a claim under the Certificate Insurance Policy
or if any amount owed to the Certificate Insurer will not be fully reimbursed
after such termination, the consent of the Certificate Insurer shall be required
prior to the Holder of the Class CE Certificates exercising such option.

                  (b) The Holder of the Class CE Certificates (unless it is an
affiliate of the Seller) or, if the Holder of the Class CE Certificates fails to
exercise such optional termination right or is an affiliate of the Seller, the
Servicer (either the Class CE Certificateholder or the Servicer, the
"Terminator") shall have the right to purchase all of the Mortgage Loans and
each REO Property remaining in REMIC I pursuant to clause (i) of the preceding
paragraph no later than the Determination Date in the month immediately
preceding the Distribution Date on which the Certificates will be retired;
provided, however, that the Terminator may elect to purchase all of the Mortgage
Loans and each REO Property remaining in REMIC I pursuant to clause (i) above
only if the aggregate Stated Principal Balance of the Mortgage Loans and each
REO Property remaining in the Trust Fund at the time of such election is reduced
to less than 10% of

                                      162
<PAGE>

the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date. By acceptance of the Residual Certificates, the Holder of the Residual
Certificates agrees, in connection with any termination hereunder, to assign and
transfer any portion of the Termination Price in excess of par, and to the
extent received in respect of such termination, to pay any such amounts to the
Holders of the Class CE Certificates. Notwithstanding the foregoing, the
optional termination right may only be exercised by the Servicer if (i) it
receives written notification from the Holder of the Class CE Certificates that
it will not exercise such optional termination right, (ii) it provides written
notice to the Authorized Officers of the Seller that it intends to exercise such
optional termination right and (iii) it receives written authorization from the
Authorized Officers of the Seller to exercise such optional termination right.

                  (c) Notice of the liquidation of the Certificates shall be
given promptly by the Securities Administrator by letter to the
Certificateholders mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the Terminator,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of the final distribution on the Certificates or (b)
otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and the final payment in respect
of the REMIC I Regular Interests, REMIC I Regular Interests or the Certificates
will be made upon presentation and surrender of the related Certificates at the
office of the Securities Administrator therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC I Regular Interests, REMIC I Regular Interests or Certificates from and
after the Interest Accrual Period relating to the final Distribution Date
therefor and (iv) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office of the Securities Administrator. In the event
such notice is given in connection with the purchase of all of the Mortgage
Loans and each REO Property remaining in REMIC I by the Terminator, the
Terminator shall deliver to the Securities Administrator for deposit in the
Distribution Account not later than the Business Day prior to the Distribution
Date on which the final distribution on the Certificates an amount in
immediately available funds equal to the above-described Termination Price. The
Securities Administrator shall remit to the Servicer, the Master Servicer, the
Trustee and the Custodian from such funds deposited in the Distribution Account
(i) any amounts which the Servicer would be permitted to withdraw and retain
from the Collection Account pursuant to Section 3.09 as if such funds had been
deposited therein (including all unpaid Servicing Fees and all outstanding P&I
Advances and Servicing Advances) and (ii) any other amounts otherwise payable by
the Securities Administrator to the Master Servicer, the Trustee, the Custodian
and the Servicer from amounts on deposit in the Distribution Account pursuant to
the terms of this Agreement prior to making any final distributions pursuant to
Section 10.01(d) below. Upon certification to the Trustee by the Securities
Administrator of the making of such final deposit, the Trustee shall promptly
release or cause to be released to the Terminator the Mortgage Files for the
remaining Mortgage Loans, and Trustee shall execute all assignments,
endorsements and other instruments delivered to it and necessary to effectuate
such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Securities Administrator
shall distribute to each Certificateholder so presenting and surrendering its
Certificates the amount otherwise distributable on such Distribution Date in
accordance with Section 5.01 in respect of the Certificates so presented and

                                      163
<PAGE>

surrendered. Any funds not distributed to any Holder or Holders of Certificates
being retired on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 10.01 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Securities Administrator shall mail
a second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the trust funds. If within one year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Securities Administrator
shall pay to the Depositor all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Securities Administrator as a result of such Certificateholder's failure
to surrender its Certificate(s) on the final Distribution Date for final payment
thereof in accordance with this Section 10.01. Any such amounts held in trust by
the Securities Administrator shall be held uninvested in an Eligible Account.

                  SECTION 10.02. Additional Termination Requirements.

                  (a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:

                           (i) The Trustee shall specify the first day in the
         90-day liquidation period in a statement attached to each Trust REMIC's
         final Tax Return pursuant to Treasury regulation Section 1.860F-1 and
         shall satisfy all requirements of a qualified liquidation under Section
         860F of the Code and any regulations thereunder, as evidenced by an
         Opinion of Counsel obtained by and at the expense of the Terminator;

                           (ii) During such 90-day liquidation period and, at or
         prior to the time of making of the final payment on the Certificates,
         the Trustee shall sell all of the assets of REMIC I to the Terminator
         for cash; and

                           (iii) At the time of the making of the final payment
         on the Certificates, the Securities Administrator shall distribute or
         credit, or cause to be distributed or credited, to the Holders of the
         Residual Certificates all cash on hand in the Trust Fund (other than
         cash retained to meet claims), and the Trust Fund shall terminate at
         that time.

                  (b) At the expense of the requesting Terminator (or, if the
Trust Fund is being terminated as a result of the occurrence of the event
described in clause (ii) of the first paragraph of Section 10.01, at the expense
of the Trust Fund), the Terminator shall prepare or cause to be prepared the
documentation required in connection with the adoption of a plan of liquidation
of each Trust REMIC pursuant to this Section 10.02.

                                      164
<PAGE>

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.

                                      165
<PAGE>

                                   ARTICLE XI

                                REMIC PROVISIONS

                  SECTION 11.01. REMIC Administration.

                  (a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will be made by the Securities Administrator on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interest shall be designated as the
Residual Interests in REMIC I. The Class A Certificates, the Mezzanine
Certificates, the Class B Certificates, the Class P Certificates and the Class
CE Certificates (exclusive of any right to receive payments from the Reserve
Fund) shall be designated as the Regular Interests in REMIC II and the Class
R-II Interest shall be designated as the Residual Interests in REMIC II. The
Trustee shall not permit the creation of any "interests" in each Trust REMIC
(within the meaning of Section 860G of the Code) other than the REMIC I Regular
Interests and the interests represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

                  (c) The Securities Administrator shall be reimbursed for any
and all expenses relating to any tax audit of the Trust Fund (including, but not
limited to, any professional fees or any administrative or judicial proceedings
with respect to each Trust REMIC that involve the Internal Revenue Service or
state tax authorities), including the expense of obtaining any tax related
Opinion of Counsel except as specified herein. The Securities Administrator, as
agent for each Trust REMIC's tax matters person shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving any Trust
REMIC and (ii) represent the Trust Fund in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. The holder of the largest Percentage Interest of
each Class of Residual Certificates shall be designated, in the manner provided
under Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.

                  (d) The Securities Administrator shall prepare and file and
the Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.

                  (e) The Securities Administrator shall perform on behalf of
each Trust REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Securities Administrator

                                      166
<PAGE>

shall provide (i) to any Transferor of a Residual Certificate such information
as is necessary for the application of any tax relating to the transfer of a
Residual Certificate to any Person who is not a Permitted Transferee upon
receipt of additional reasonable compensation, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The
Depositor shall provide or cause to be provided to the Securities Administrator,
within ten (10) days after the Closing Date, all information or data that the
Securities Administrator reasonably determines to be relevant for tax purposes
as to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.

                  (f) To the extent in the control of the Trustee or the
Securities Administrator, each such Person (i) shall take such action and shall
cause each REMIC created hereunder to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions,
(ii) shall not take any action, cause the Trust Fund to take any action or fail
to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (A) endanger the
status of each Trust REMIC as a REMIC or (B) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless such action or inaction is permitted
under this Agreement or the Trustee and the Securities Administrator have
received an Opinion of Counsel, addressed to the them (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee
or the Securities Administrator) to the effect that the contemplated action will
not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor (iii) shall the Securities Administrator take or
fail to take any action (whether or not authorized hereunder) as to which the
Trustee has advised it in writing that it has received an Opinion of Counsel to
the effect that an Adverse REMIC Event could occur with respect to such action;
provided that the Securities Administrator may conclusively rely on such Opinion
of Counsel and shall incur no liability for its action or failure to act in
accordance with such Opinion of Counsel. In addition, prior to taking any action
with respect to any Trust REMIC or the respective assets of each, or causing any
Trust REMIC to take any action, which is not contemplated under the terms of
this Agreement, the Securities Administrator will consult with the Trustee or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any Trust REMIC, and the Securities
Administrator shall not take any such action or cause any Trust REMIC to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be home by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local

                                      167
<PAGE>

tax laws, such tax shall be charged (i) to the Trustee pursuant to Section
11.03, if such tax arises out of or results from a breach by the Trustee of any
of its obligations under this Article XI, (ii) to the Securities Administrator
pursuant to Section 11.03, if such tax arises out of or results from a breach by
the Securities Administrator of any of its obligations under this Article XI,
(iii) to the Master Servicer pursuant to Section 11.03, if such tax arises out
of or results from a breach by the Master Servicer of any of its obligations
under Article IV or under this Article XI, (iv) to the Servicer pursuant to
Section 11.03, if such tax arises out of or results from a breach by the
Servicer of any of its obligations under Article III or under this Article XI,
or (v) in all other cases, against amounts on deposit in the Distribution
Account and shall be paid by withdrawal therefrom.

                  (h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.

                  (i) Following the Startup Day, neither the Securities
Administrator nor the Trustee shall accept any contributions of assets to any
Trust REMIC other than in connection with any Qualified Substitute Mortgage Loan
delivered in accordance with Section 2.03 unless it shall have received an
Opinion of Counsel to the effect that the inclusion of such assets in the Trust
Fund will not cause the related REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding or subject such REMIC to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.

                  (j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.

                  (k) The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.

                  SECTION 11.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Servicer, the Securities
Administrator, the Master Servicer or the Trustee shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage Loan, including but not limited to, the acquisition or
sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of REMIC I, (iii) the termination of REMIC I pursuant to Article X of
this Agreement, (iv) a substitution pursuant to Article II of this Agreement or
(v) a purchase of Mortgage Loans pursuant to Article II of this Agreement), nor
acquire any assets for any Trust REMIC (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee and the Securities
Administrator (at the expense of

                                      168
<PAGE>

the party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust REMIC
to be subject to a tax on "prohibited transactions" or "contributions" pursuant
to the REMIC Provisions.

                  SECTION 11.03. Indemnification.

                  (a) The Trustee agrees to be liable for any taxes and costs
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicer including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator or the Servicer as a result of the
Trustee's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Trustee set forth in this Agreement.

                  (b) The Servicer agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee for
any taxes and costs including any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Trustee, as a result of the Servicer's failure to perform
its covenants set forth in Article III in accordance with the standard of care
of the Servicer set forth in this Agreement.

                  (c) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor, the Servicer and the Trustee for any taxes and costs including
any reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor, the Servicer or the Trustee, as a result of the Master Servicer's
failure to perform its covenants set forth in Article IV in accordance with the
standard of care of the Master Servicer set forth in this Agreement.

                  (d) The Securities Administrator agrees to be liable for any
taxes and costs incurred by the Trust Fund, the Depositor, the Servicer or the
Trustee including any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor, the Servicer or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article XI in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.

                                      169
<PAGE>

                                  ARTICLE XII

                            MISCELLANEOUS PROVISIONS

                  SECTION 12.01. Amendment.

                  This Agreement may be amended from time to time by the
Depositor, the Servicer, the Master Servicer, the Securities Administrator and
the Trustee, but without the consent of any of the Certificateholders, (i) to
cure any ambiguity or defect, (ii) to correct, modify or supplement any
provisions herein (including to give effect to the expectations of
Certificateholders), or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement or the Certificate Insurance
Policy which shall not be inconsistent with the provisions of this Agreement,
provided that the prior consent of the Certificate Insurer shall be required for
any amendment that affects its rights, duties or obligations and that such
action shall not, as evidenced by an Opinion of Counsel delivered to the
Trustee, adversely affect in any material respect the interests of any
Certificateholder or the Certificate Insurer; provided that any such amendment
shall be deemed not to adversely affect in any material respect the interests of
the Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates (without regard to the
Certificate Insurance Policy). No amendment shall be deemed to adversely affect
in any material respect the interests of any Certificateholder who shall have
consented thereto, and no Opinion of Counsel shall be required to address the
effect of any such amendment on any such consenting Certificateholder.

                  This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Master Servicer, the Securities Administrator and
the Trustee with the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates or the Certificate Insurer in a manner,
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing at least 66% of the Voting Rights
allocated to such Class, or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 12.01, Certificates registered in the name of the Depositor or a
Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates. Without limiting the generality
of the foregoing, any amendment to this Agreement required in connection with
the compliance with or the clarification of any reporting obligations described
in Section 5.06 hereof shall not require the consent of any Certificateholder
and without the need for any Opinion of Counsel or Rating Agency confirmation.

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of

                                      170
<PAGE>

Counsel to the effect that such amendment is permitted hereunder and will not
result in the imposition of any tax on any Trust REMIC pursuant to the REMIC
Provisions or cause any Trust REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding and that such amendment is authorized or
permitted by this Agreement.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 12.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee .

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION 12.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Depositor at the expense of the Certificateholders, but only
upon direction of the Trustee accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 12.03. Limitation on Rights of Certificateholders.

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

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any

                                      171
<PAGE>

liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder. and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 12.04. 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 without regard to
conflicts of laws principles thereof.

                  SECTION 12.05. Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if sent by
facsimile, receipt confirmed, if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service or delivered in any
other manner specified herein, to (a) in the case of the Depositor, ACE
Securities Corp., AMACAR GROUP, 6525 Morrison Boulevard, Suite 318, Charlotte,
North Carolina 28211, Attention: Juliana Johnson (telecopy number:(704)
365-1362), or such other address or telecopy number as may hereafter be
furnished to the Servicer, the Master Servicer, the Securities Administrator and
the Trustee in writing by the Depositor, (b) in the case of the Servicer, Ocwen
Federal Bank FSB, 1675 Palm Beach Lakes Boulevard, Suite 10A, West Palm Beach,
Florida 33401, Attention: Secretary (telecopy number: (561) 682-8177), or such
other address or telecopy number as may hereafter be furnished to the Trustee,
the Master Servicer, the Securities Administrator and the Depositor in writing
by the Servicer, (c) in the case of the Master Servicer and the Securities
Administrator, P.O. Box 98, Columbia, Maryland 21046 and for overnight delivery
to 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Ace Securities
Corp., 2004-HE2 (telecopy number: (410) 715-2380), or such other address or
telecopy number as may hereafter be furnished to the Trustee, the Depositor and
the Servicer in writing by the Master Servicer or the Securities Administrator
and (d) in the case of

                                      172
<PAGE>

the Trustee, at the Corporate Trust Office or such other address or telecopy
number as the Trustee may hereafter be furnish to the Servicer, the Master
Servicer, the Securities Administrator and the Depositor in writing by the
Trustee. Any notice required or permitted to be given to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above.

                  SECTION 12.06. Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION 12.07. Notice to Rating Agencies.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which a
Responsible Officer has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Servicer Event of Default or Master
         Servicer Event of Default that has not been cured or waived;

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

                  4. The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03;

                  5. The final payment to the Holders of any Class of
         Certificates;

                  6. Any change in the location of the Distribution Account; and

                  7. Any event that would result in the inability of the Trustee
         as successor Servicer to make advances regarding delinquent Mortgage
         Loans.

                  In addition, the Securities Administrator shall promptly make
available to each Rating Agency copies of each report to Certificateholders
described in Section 5.02.

                  The Servicer shall make available to each Rating Agency copies
of the following:

                  8. Each annual statement as to compliance described in Section
         3.17; and

                                      173
<PAGE>

                  9. Each annual independent public accountants' servicing
         report described in Section 3.18.

                  Any such notice pursuant to this Section 12.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Standard & Poor's, a division of the McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York 10041 and to Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007 or such other addresses as the Rating
Agencies may designate in writing to the parties hereto.

                  SECTION 12.08. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 12.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, on behalf of
the Trust and for the benefit of the Certificateholders, be, and be construed
as, a sale of the Mortgage Loans by the Depositor and not a pledge of the
Mortgage Loans to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Depositor, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust and for
the benefit of the Certificateholders, to secure a debt or other obligation of
the Depositor and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 shall be deemed to be a grant by the Depositor to
the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the Trust
and for the benefit of the Certificateholders, a security interest in the
Mortgage Loans and all other property described in clause (2) of the preceding
sentence, for the purpose of securing to the Trustee the performance by the
Depositor of the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.01 to be a true, absolute and unconditional sale of the

                                      174
<PAGE>

Mortgage Loans and assets constituting the Trust Fund by the Depositor to the
Trustee, on behalf of the Trust and for the benefit of the Certificateholders.

                  SECTION 12.10. Survival of Indemnification.

                  Any and all indemnities to be provided by any party to this
Agreement shall survive the termination and resignation of any party hereto and
the termination of this Agreement.

                                      175
<PAGE>

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

                        ACE SECURITIES CORP.,
                        as Depositor

                        By: ___________________________________________________
                        Name:
                        Title:

                        By:____________________________________________________
                        Name:
                        Title:

                        OCWEN FEDERAL BANK FSB
                        as Servicer

                        By: ___________________________________________________
                        Name:
                        Title:

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

                        By:____________________________________________________
                        Name:
                        Title:

                        WELLS FARGO BANK, N.A.
                        as Master Servicer and Securities Administrator

                        By:____________________________________________________
                        Name:
                        Title:

<PAGE>

                          ACKNOWLEDGED AND AGREED FOR PURPOSES OF SECTION 9.05:

                          DB STRUCTURED PRODUCTS, INC

                          By:____________________________________
                          Name:
                          Title:

                          By:____________________________________
                          Name:
                          Title:

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

                  On the ___ day of September 2004, before me, a notary public
in and for said State, personally appeared _____________________ known to me to
be a _____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                       ________________________________________
                                                   Notary Public

[Notarial Seal]                        My commission expires

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of September 2004, before me, a notary public
in and for said State, personally appeared _____________________ known to me to
be a _____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                       ________________________________________
                                                   Notary Public

[Notarial Seal]                        My commission expires

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of September 2004, before me, a notary public
in and for said State, personally appeared _____________________ known to me to
be a _____________________ of Ocwen Federal Bank FSB, one of the federal
chartered savings banks that executed the within instrument, and also known to
me to be the person who executed it on behalf of said federally chartered
savings bank, and acknowledged to me that such federally chartered savings bank
executed the within instrument.

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

                                       ________________________________________
                                                   Notary Public

[Notarial Seal]                        My commission expires

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of September 2004, before me, a notary public
in and for said State, personally appeared _____________________ known to me to
be a _____________________ of Wells Fargo Bank, N.A., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                       ________________________________________
                                                   Notary Public

[Notarial Seal]                        My commission expires

<PAGE>

STATE OF          )
                  ) ss.:
COUNTY OF         )

                  On the ___ day of September 2004, before me, a notary public
in and for said State, personally appeared _____________________ known to me to
be a _____________________ of HSBC Bank USA, National Association, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

                                       ________________________________________
                                                   Notary Public

[Notarial Seal]                        My commission expires

<PAGE>
                                   EXHIBIT A-1
                                   -----------

                   FORM OF CLASS A-[1][2A][2B][2C] CERTIFICATE

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

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

<PAGE>

<TABLE>
<CAPTION>
<S>                                                  <C>
Series 2004-HE2, Class A-[1][2A][2B][2C]             Aggregate Certificate Principal Balance of
                                                     the Class A-[1][2A][2B][2C]Certificates as
                                                     of the Issue Date:   $

Pass-Through Rate: Variable                          Denomination:  $

Date of Pooling and Servicing Agreement              Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: September 1, 2004

First Distribution Date: October 25, 2004            Trustee: HSBC Bank USA, National Association

No.__                                                Issue Date: September 20, 2004

                                                     CUSIP:________________
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                     A-1-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN ACE SECURITIES CORP., THE MASTER SERVICER, THE
         SECURITIES ADMINISTRATOR, THE SERVICER, THE TRUSTEE OR ANY OF
         THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
A-[1][2A][2B][2C]Certificates as of the Issue Date) in that certain beneficial
ownership interest evidenced by all the Class A-[1][2A][2B][2C] Certificates in
REMIC II created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among ACE Securities Corp., as depositor
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), Wells Fargo Bank, N.A. as master servicer (the "Master
Servicer") and securities administrator (the "Securities Administrator"), Ocwen
Federal Bank FSB, as servicer (the "Servicer") and HSBC Bank USA, National
Association as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class A-[1][2A][2B][2C]
Certificates on such Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A-[1][2A][2B][2C] Certificates the aggregate initial Certificate Principal
Balance of which is in

                                     A-1-3
<PAGE>

excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class A-[1][2A][2B][2C]
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be a rate per annum equal to the lesser of (i) One-Month LIBOR plus [_____]%, in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate principal balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, or One-Month LIBOR plus [_____]%, in the case of any Distribution Date
thereafter and (ii) the applicable Net WAC Pass-Through Rate for such
Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contracts, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an

                                     A-1-4
<PAGE>

assignment in the form below or other written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assumes
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     A-1-5
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class A-[1][2A][2B][2C] Certificates
referred to in the within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     Custodian
                                                             ------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties                        _________________
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Trustee or the Securities
Administrator to issue a new Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Certificate to the following
address: _______________________________________________________________________
_______________________________________________________________________________.

Dated:
                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-2
                                   -----------

                 FORM OF CLASS M-[1][2][3][4][5][6] CERTIFICATE

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

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES
         [[,/AND] CLASS M-1 CERTIFICATES [,/AND] CLASS M-2
         CERTIFICATES[,/AND] CLASS M-3 CERTIFICATES [,/AND] CLASS M-4
         CERTIFICATES [,/AND] CLASS M-5 CERTIFICATES] TO THE EXTENT
         DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

         ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
         REPRESENTATIONS SET FORTH IN SECTION 6.02(C) OF THE AGREEMENT
         REFERRED TO HEREIN.

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
         DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES
         ALLOCABLE HERETO AS DESCRIBED IN THE AGREEMENT REFERRED TO
         HEREIN. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
         CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN
         BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
         CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES
         ADMINISTRATOR NAMED HEREIN.

<PAGE>

<TABLE>
<CAPTION>
<S>                                                  <C>
Series 2004-HE2, Class M-[1][2][3][4][5][6]          Aggregate Certificate Principal Balance of the
                                                     Class M-[1][2][3][4][5][6] Certificates as of the
                                                     Issue Date: $______________

Pass-Through Rate: Variable                          Denomination: $______________

Date of Pooling and Servicing Agreement              Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: September 1, 2004

First Distribution Date: October 25, 2004            Trustee: HSBC Bank USA, National Association

No.___                                               Issue Date: September 20, 2004

                                                     CUSIP:_________________
</TABLE>

                                     A-2-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN ACE SECURITIES CORP., THE MASTER SERVICER, THE
         SECURITIES ADMINISTRATOR, THE SERVICER, THE TRUSTEE OR ANY OF
         THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class
M-[1][2][3][4][5][6] Certificates as of the Issue Date) in that certain
beneficial ownership interest evidenced by all the Class M-[1][2][3][4][5][6]
Certificates in REMIC II created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among ACE Securities Corp., as
depositor (hereinafter called the "Depositor", which term includes any successor
entity under the Agreement), Wells Fargo Bank, N.A. as master servicer (the
"Master Servicer") and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB as servicer (the "Servicer") and HSBC
Bank USA, National Association, as trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (the "Record Date"), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to the Holders of Class M-[1][2][3][4][5][6]
Certificates on such Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date

                                     A-2-3
<PAGE>

immediately prior to such Distribution Date and is the registered owner of Class
M-[1][2][3][4][5][6] Certificates the aggregate initial Certificate Principal
Balance of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds
of the aggregate initial Certificate Principal Balance of the Class
M-[1][2][3][4][5][6] Certificates, or otherwise by check mailed by first class
mail to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Securities
Administrator of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus [____]% ,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One-Month LIBOR plus [____]%, in the case of any
Distribution Date thereafter and (ii) the applicable Net WAC Pass-Through Rate
for such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans and payments received
pursuant to the Cap Contracts, all as more specifically set forth herein and in
the Agreement. As provided in the Agreement, withdrawals from the Collection
Account and the Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                                     A-2-4
<PAGE>

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 6.02(c) of the Agreement.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                                     A-2-5
<PAGE>

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     A-2-6
<PAGE>

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

Dated:

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class M-[1][2][3][4][5][6] Certificates
referred to in the within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     Custodian
                                                             ------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties                        _________________
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address: ________________
_______________________________________________________________________________.

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3
                                   -----------

                       FORM OF CLASS B-[1][2] CERTIFICATES

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

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
         CLASS A CERTIFICATES AND THE MEZZANINE CERTIFICATES, AS
         DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
         DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES
         ALLOCABLE HERETO AS DESCRIBED IN THE AGREEMENT REFERRED TO
         HEREIN. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
         CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN
         BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
         CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES
         ADMINISTRATOR NAMED HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
         ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
         THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
         REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
         COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
         AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE MEANING OF AND
         IN COMPLIANCE WITH REGULATION S UNDER THE ACT ("REGULATION S"),
         OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED INSTITUTIONAL
         BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE 144A
         UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS
         THAT ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE
         501(A)(1), (2), (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         [THIS CERTIFICATE IS A REGULATION S TEMPORARY GLOBAL
         CERTIFICATE FOR PURPOSES OF REGULATION S UNDER THE UNITED
         STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
         ACT"). PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF (I)
         THE COMMENCEMENT OF THE OFFERING OF THE OFFERED CERTIFICATES
         AND (II) THE CLOSING DATE, THIS

<PAGE>

         CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
         TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON EXCEPT
         PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT.]

         [NO BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
         CERTIFICATE SHALL BE ENTITLED TO RECEIVE PAYMENTS OF PRINCIPAL
         OR INTEREST HEREIN UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN
         DELIVERED PURSUANT TO THE TERMS OF THE AGREEMENT (AS DEFINED
         HEREIN).]

         [THE HOLDER OF THIS REGULATION S PERMANENT GLOBAL CERTIFICATE
         BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE
         TRANSFER SUCH CERTIFICATE WITHIN THE UNITED STATES OR TO U.S.
         PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT)
         PRIOR TO THE DATE WHICH IS THE LATER OF (I) 40 DAYS AFTER THE
         LATER OF THE CLOSING DATE AND (II) THE DATE ON WHICH THE
         REQUISITE CERTIFICATIONS ARE DUE TO AND PROVIDED TO THE TRUSTEE
         AND SECURITIES ADMINISTRATOR PURSUANT TO THE AGREEMENT (AS
         DEFINED BELOW), EXCEPT PURSUANT TO AN EXEMPTION FROM THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
         UNLESS THE TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO
         SECTION 6.02(C) OF THE AGREEMENT.

                                     A-3-2
<PAGE>

<TABLE>
<CAPTION>
<S>                                              <C>
Series ACE 2004-HE2, Class B-[1][2]              Aggregate Certificate Principal Balance
                                                 of the Class B-[1][2] Certificates as of
                                                 the Issue Date: $

Pass-Through Rate: Variable                      Denomination: $

Date of Pooling and Servicing Agreement          Master Servicer: Wells Fargo Bank, N.A.

and Cut-off Date: September 1, 2004
First Distribution Date: October 25, 2004        Trustee: HSBC Bank USA, National Association

No. ______                                       Issue Date: September 20, 2004

                                                 CUSIP:
</TABLE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN ACE SECURITIES CORP., THE MASTER SERVICER, THE
         SECURITIES ADMINISTRATOR, THE SERVICER, THE TRUSTEE OR ANY OF
         THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

         This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-[1][2]
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class B-[1][2] Certificates in REMIC II created pursuant to
a Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (the "Master Servicer"), and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                                     A-3-3
<PAGE>

         Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered at the close of business on the
Business Day immediately preceding such Distribution Date (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
B-[1][2] Certificates on such Distribution Date pursuant to the Agreement.

         All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Securities Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-[1][2]
Certificates the aggregate initial Certificate Principal Balance of which is in
excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class B-[1][2] Certificates, or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator for that
purpose as provided in the Agreement.

         The Pass-Through Rate applicable to the calculation of interest payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i) One Month LIBOR plus _____%, in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust Fund is reduced to less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, or
One-Month LIBOR plus _____%, in the case of any Distribution Date thereafter and
(ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

         This Certificate is one of a duly authorized issue of Certificates
designated as Asset Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans and payments received pursuant to
the Cap Contracts, all as more specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Collection Account
and the Distribution Account may be made from time to time for purposes other
than distributions to Certificateholders, such purposes including reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans.

                                     A-3-4
<PAGE>

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

         The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

         No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A or Regulation S under the 1933 Act, written certifications from the Holder
of the Certificate desiring to effect the transfer, and from such Holder's
prospective transferee, substantially in the forms attached to the Agreement as
Exhibit B-1, (ii) if such transfer is purportedly being made in reliance upon
Rule 501(a) under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer and from such Holder's prospective
transferee, substantially in the form attached to the Agreement as Exhibit B-2
and (iii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of

                                     A-3-5
<PAGE>

the Trust Fund or of the Depositor, the Trustee, the Master Servicer or the
Securities Administrator in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor, the Trustee or the
Securities Administrator is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

         No transfer of this Certificate shall be made to any person unless the
Transferee provides a certification pursuant to Section 6.02(d) of the
Agreement.

         The Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer nor any such agent shall be affected by
notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Securities Administrator and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

         The recitals contained herein shall be taken as statements of the
Depositor and neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the
Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-3-6
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class B-[1][2] Certificates referred to in
the within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest evidenced by the within Mortgage Pass-Through Certificate
and hereby authorizes the transfer of registration of such interest to assignee
on the Certificate Register of the Trust Fund.

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

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-4
                                   -----------

                          FORM OF CLASS CE CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND
         THE MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE
         AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
         ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
         THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
         REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
         COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
         AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE MEANING OF AND
         IN COMPLIANCE WITH REGULATION S UNDER THE ACT ("REGULATION S"),
         OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED INSTITUTIONAL
         BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE 144A
         UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS
         THAT ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE
         501(A)(1), (2), (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
         OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE
         REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
         HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
         UNLESS THE TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO
         SECTION 6.02(C) OF THE AGREEMENT.

<PAGE>

<TABLE>
<CAPTION>
<S>                                              <C>
Series 2004-HE2, Class CE                        Aggregate Certificate Principal Balance of
                                                 the Class CE Certificates as of the
                                                 Issue Date: $_____________________

Pass-Through Rate: Variable                      Denomination: $_________________

Cut-off Date and date of Pooling and             Master Servicer: Wells Fargo Bank, N.A.
Servicing Agreement: September 1, 2004

First Distribution Date: October 25, 2004        Trustee: HSBC Bank USA, National Association

No. __                                           Issue Date: September 20, 2004
</TABLE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN ACE SECURITIES CORP., THE MASTER SERVICER, THE
         SECURITIES ADMINISTRATOR, THE SERVICER, THE TRUSTEE OR ANY OF
         THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that ________________ is the registered owner
of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class CE
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class CE Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (the "Master Servicer") and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and

                                     A-4-2
<PAGE>

conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class CE Certificates on such Distribution Date
pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
CE Certificates the aggregate initial Certificate Principal Balance of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial Certificate Principal Balance of the Class CE Certificates, or otherwise
by check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any

                                     A-4-3
<PAGE>

Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
(ii) if such transfer is purportedly being made in reliance upon Rule 501(a)
under the 1933 Act, written certifications from the Holder of the Certificate
desiring to effect the transfer and from such Holder's prospective transferee,
substantially in the form attached to the Agreement as Exhibit B-2 and (iii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee, the
Master Servicer or the Securities Administrator in their respective capacities
as such), together with copies of the written certification(s) of the Holder of
the Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Securities Administrator is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.

                                     A-4-4
<PAGE>

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     A-4-5
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     Custodian
                                                             ------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties                        _________________
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address: _______________
_______________________________________________________________________________.

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-5
                                   -----------

                               CLASS P CERTIFICATE

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
         ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
         THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
         REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
         COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
         AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE MEANING OF AND
         IN COMPLIANCE WITH REGULATION S UNDER THE ACT ("REGULATION S"),
         OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED INSTITUTIONAL
         BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE 144A
         UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS
         THAT ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE
         501(A)(1), (2), (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
         OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE
         REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
         HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
         UNLESS THE TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO
         SECTION 6.02(C) OF THE AGREEMENT.

<PAGE>

<TABLE>
<CAPTION>
<S>                                              <C>
Series 2004-HE2, Class P                         Aggregate Certificate Principal Balance
                                                 of the Class P Certificates as of the
                                                 Issue Date: $100.00

Cut-off Date and date of Pooling                 Denomination: $100.00
and Servicing Agreement: September 1, 2004

First Distribution Date: October 25, 2004        Master Servicer: Wells Fargo Bank, N.A.

No. __                                           Trustee: HSBC Bank USA, National Association

                                                 Issue Date: September 20, 2004
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                     A-5-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN ACE SECURITIES CORP., THE MASTER SERVICER, THE
         SECURITIES ADMINISTRATOR, THE SERVICER, THE TRUSTEE OR ANY OF
         THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that____________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class P Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among ACE Securities Corp., as depositor (hereinafter called the "Depositor",
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A., as master servicer (the "Master Servicer"), and securities administrator
(the "Securities Administrator"), Ocwen Federal Bank FSB, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee"),
a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class P Certificates on such Distribution Date
pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
P Certificates

                                     A-5-3
<PAGE>

the aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class P Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933

                                     A-5-4
<PAGE>

Act"), and an effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of this
Certificate is to be made without registration or qualification, the Securities
Administrator shall require receipt of (i) if such transfer is purportedly being
made in reliance upon Rule 144A under the 1933 Act, written certifications from
the Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit B-1, (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Holder of the Certificate desiring to effect the transfer and from such Holder's
prospective transferee, substantially in the form attached to the Agreement as
Exhibit B-2 and (iii) in all other cases, an Opinion of Counsel satisfactory to
it that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee, the Master Servicer or the Securities Administrator in
their respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Trustee or the Securities
Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Master Servicer and the Securities Administrator
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                                     A-5-5
<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     A-5-6
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Officer

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     Custodian
                                                             ------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties                        _________________
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address: _______________
_______________________________________________________________________________.

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-6
                                   -----------

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
         PERSON.

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

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
         6.02 OF THE AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
         OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
         REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
         TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
         UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
         TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02
         OF THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
         OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE
         REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
         HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
         AFFIDAVIT TO THE SECURITIES ADMINISTRATOR THAT (A) SUCH
         TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY POSSESSION
         THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
         AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
         ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521
         OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1
         OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
         IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION
         DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON
         DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
         HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR
         (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE
         OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF
         TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
         CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
         TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
         REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
         CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
         DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO
         BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL
         NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
         HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
         DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS
         CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
         CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
         PROVISIONS OF SECTION 6.02(D) OF THE AGREEMENT REFERRED TO
         HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
         PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS
         CERTIFICATE.

<TABLE>
<CAPTION>
<S>                                              <C>
Series 2004-HE2, Class R                         Aggregate Percentage Interest of the Class R
                                                 Certificates as of the Issue Date: 100.00%

Date of Pooling and Servicing Agreement          Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: September 1, 2004

First Distribution Date: October 25, 2004        Trustee: HSBC Bank USA, National Association

No __                                            Issue Date: September 20, 2004
</TABLE>

                                     A-6-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE2
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN ACE SECURITIES CORP., THE MASTER SERVICER, THE
         SECURITIES ADMINISTRATOR, THE SERVICER, THE TRUSTEE OR ANY OF
         THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                                     A-6-3
<PAGE>

                  This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ACE Securities
Corp., as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Wells Fargo Bank, N.A., as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB, as the servicer (the "Servicer") and
HSBC Bank USA, National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
R Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to

                                     A-6-4
<PAGE>

Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Trustee or the Securities

                                     A-6-5
<PAGE>

Administrator is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Master Servicer and the Securities Administrator
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02 of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Securities Administrator (i) an affidavit to the effect that such transferee is
any Person other than a Disqualified Organization or the agent (including a
broker, nominee or middleman) of a Disqualified Organization, and (ii) a
certificate that acknowledges that (A) the Class R Certificates have been
designated as representing the beneficial ownership of the residual interests in
each of REMIC I and REMIC II, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 6.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee,

                                     A-6-6
<PAGE>

the Securities Administrator, the Servicer nor any such agent shall be affected
by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
10% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                     A-6-7
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By: _________________________________
                                                     Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     Custodian
                                                             ------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties                        _________________
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Securities Administrator to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address: _______________
_______________________________________________________________________________.

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                     B-1-2
<PAGE>

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.

                                     B-1-3
<PAGE>

                                   EXHIBIT B-1
                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                     [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE2

         Re:  Ace Securities Corp. Home Equity Loan Trust, Series 2004-HE2
              Asset Backed Pass-Through Certificates
              Class B-1, Class B-2, Class CE, Class P and Class R Certificates
              ----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to ___________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
September 1, 2004, among ACE Securities Corp. as Depositor, Ocwen Federal Bank
FSB as Servicer, Wells Fargo Bank, N.A. as Master Servicer and Securities
Administrator and HSBC Bank USA, National Association as trustee (the "Pooling
and Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.

                                     B-1-4
<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                                 Very truly yours,

                                                 [Transferor]

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                     B-1-5
<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                         [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE2

          Re:   Ace Securities Corp. Home Equity Loan Trust, Series 2004-HE2
                Asset Backed Pass-Through Certificates
                Class B-1, Class B-2, Class CE, Class P and Class R Certificates
                ----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the purchase from _________________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), (the "Transferee") hereby certifies as follows:

                           1. The Transferee is a "qualified institutional
                  buyer" as that term is defined in Rule 144A ("Rule 144A")
                  under the Securities Act of 1933 (the "1933 Act") and has
                  completed either of the forms of certification to that effect
                  attached hereto as Annex 1 or Annex 2. The Transferee is aware
                  that the sale to it is being made in reliance on Rule 144A.
                  The Transferee is acquiring the Certificates for its own
                  account or for the account of a qualified institutional buyer,
                  and understands that such Certificate may be resold, pledged
                  or transferred only (i) to a person reasonably believed to be
                  a qualified institutional buyer that purchases for its own
                  account or for the account of a qualified institutional buyer
                  to whom notice is given that the resale, pledge or transfer is
                  being made in reliance on Rule 144A, or (ii) pursuant to
                  another exemption from registration under the 1933 Act.

                           2. The Transferee has been furnished with all
                  information regarding (a) the Certificates and distributions
                  thereon, (b) the nature, performance and servicing of the
                  Mortgage Loans, (c) the Pooling and Servicing Agreement
                  referred to below, and (d) any credit enhancement mechanism
                  associated with the Certificates, that it has requested.

3.   The Transferee: (a) is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") (each, a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. ss.12510.3-101 or (b) [[for Class CE, Class P and Class
R] has provided the Securities Administrator with an opinion of counsel on which
the Trustee, the Depositor, the Master Servicer, the Securities Administrator
and the Servicer may rely, acceptable to and in form and

                                     B-1-6
<PAGE>

substance satisfactory to the Trustee to the effect that the purchase of
Certificates is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Trust Fund, the Trustee, the Depositor, the Master
Servicer, the Securities Administrator or the Servicer to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Pooling and Servicing
Agreement.] [[for Class B] represents and warrants that it has acquired and is
holding such certificate in reliance on Prohibited Transaction Exemption ("PTE")
2002-41, and that it understands that there are certain conditions to the
availability of PTE 2002-41, including that such certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch or
Moody's Investors Service, Inc., and such certificate is so rated, and that it
is an "accredited investor" as defined in Rule 501(a)(1) of Regulation D issued
under the Securities Act and will obtain a representation from any transferee
that such transferee is an accredited investor so long as it is required to
obtain a representation regarding compliance with the Securities Act or (c)(i)
it is an insurance company, (ii) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (iii) the conditions in Sections I and III of PTCE 95-60 have been
satisfied.

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 3 above.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of September 1, 2004, among ACE Securities Corp. as
Depositor, Wells Fargo Bank, N.A. as Master Servicer and Securities
Administrator, Ocwen Federal Bank FSB as Servicer and HSBC Bank USA, National
Association as Trustee, pursuant to which the Certificates were issued.

                                                 [TRANSFEREE]

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                     B-1-7
<PAGE>

                                                          ANNEX 1 TO EXHIBIT B-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $________________1 in securities
(except for the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Transferee satisfies the criteria in the category
marked below.

         ___      CORPORATION, ETC. The Transferee is a corporation (other than
                  a bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or any
                  organization described in Section 501(c)(3) of the Internal
                  Revenue Code of 1986.

         ___      BANK. The Transferee (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

         ___      SAVINGS AND LOAN. The Transferee (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over any such institutions or is a foreign savings
                  and loan association or equivalent institution and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

----------------------------
1     Transferee must own and/or invest on a discretionary basis at least
      $100,000,000 in securities unless Transferee is a dealer, and, in that
      case, Transferee must own and/or invest on a discretionary basis at least
      $10,000,000 in securities.

                                     B-1-8
<PAGE>

         ___      BROKER-DEALER. The Transferee is a dealer registered pursuant
                  to Section 15 of the Securities Exchange Act of 1934.

         ___      INSURANCE COMPANY. The Transferee is an insurance company
                  whose primary and predominant business activity is the writing
                  of insurance or the reinsuring of risks underwritten by
                  insurance companies and which is subject to supervision by the
                  insurance commissioner or a similar official or agency of a
                  State, territory or the District of Columbia.

         ___      STATE OR LOCAL PLAN. The Transferee is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

         ___      ERISA PLAN. The Transferee is an employee benefit plan within
                  the meaning of Title I of the Employee Retirement Income
                  Security Act of 1974.

         ___      INVESTMENT ADVISOR The Transferee is an investment advisor
                  registered under the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.

         ___      ___       Will the Transferee be purchasing the Certificates
         Yes      No        only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third

                                     B-1-9
<PAGE>

party (including any separate account) in reliance on Rule 144A, the Transferee
will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Transferee agrees that the Transferee will not purchase securities for a
third party unless the Transferee has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule 144A
to conclude that such third party independently meets the definition of
"qualified institutional buyer" set forth in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:
                                                 _______________________________
                                                 Print Name of Transferee

                                                 By: ___________________________
                                                 Name:
                                                 Title:

                                     B-1-10
<PAGE>

                                                          ANNEX 2 TO EXHIBIT B-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

         ___      The Transferee owned $________________________ in securities
                  (other than the excluded securities referred to below) as of
                  the end of the Transferee's most recent fiscal year (such
                  amount being calculated in accordance with Rule 144A).

         ___      The Transferee is part of a Family of Investment Companies
                  which owned in the aggregate $_______________ in securities
                  (other than the excluded securities referred to below) as of
                  the end of the Transferee's most recent fiscal year (such
                  amount being calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                                     B-1-11
<PAGE>

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:
                                            ____________________________________
                                            Print Name of Transferee or Advisor

                                            By:_________________________________
                                            Name:
                                            Title:

                                            IF AN ADVISER:

                                            ____________________________________
                                                   Print Name of Transferee

                                     B-1-12
<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1. I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
         defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
         as amended.

                  3. As of the date specified below (which is not earlier than
         the last day of the Purchaser's most recent fiscal year), the amount of
         "securities", computed for purposes of Rule 144A, owned and invested on
         a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser ____________________________________________________________

By: (Signature) ______________________________________________________________

Name of Signatory ____________________________________________________________

Title ________________________________________________________________________

Date of this certificate _____________________________________________________

Date of information provided in paragraph 3  _________________________________

                                     B-1-13
<PAGE>

                                    EXHIBIT C

                    FORM OF REGULATION S TRANSFER CERTIFICATE

[Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE2

             Re:   Ace Securities Corp. Home Equity Loan Trust, Series 2004-HE2
                   Asset Backed Pass-Through Certificates, Class B Certificates
                   ------------------------------------------------------------

Ladies and Gentlemen:

                  Reference is hereby made to the Pooling and Servicing
Agreement (the "Agreement"), dated as of September 1, 2004, among ACE Securities
Corp. (the "Depositor"), Wells Fargo Bank, N.A., as master servicer and
securities administrator (the "Master Servicer"), Ocwen Federal Bank FSB, as
servicer (the "Servicer") and HSBC Bank USA, National Association, as trustee
(the "Trustee"). Capitalized terms used herein but not defined herein shall have
the meanings assigned thereto in the Agreement.

                  This letter relates to U.S. $[__________] Certificate
Principal Balance of Class B Certificates (the "Certificates") which are held in
the name of [name of transferor] (the "Transferor") to effect the transfer of
the Certificates to a person who wishes to take delivery thereof in the form of
an equivalent beneficial interest [name of transferee] (the "Transferee").

                  In connection with such request, the Transferor hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement and the private placement memorandum
dated September __, 2004 relating to the Certificates and that the following
additional requirements (if applicable) were satisfied:

                  (a) the offer of the Certificates was not made to a person in
the United States;

                  (b) at the time the buy order was originated, the Transferee
was outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the Transferee was outside the United States;

                  (c) no directed selling efforts were made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;

                  (d) the transfer or exchange is not part of a plan or scheme
to evade the registration requirements of the Securities Act;

                                     B-1-14
<PAGE>

                  (e) the Transferee is not a U.S. Person, as defined in
Regulation S under the Securities Act;

                  (f) the transfer was made in accordance with the applicable
provisions of Rule 903(b)(2) or (3) or Rule 904(b)(1), as the case may be; and

                  (g) the Transferee understands that the Certificates have not
been and will not be registered under the Securities Act, that any offers, sales
or deliveries of the Certificates purchased by the Transferee in the United
States or to U.S. persons prior to the date that is 40 days after the later of
(i) the commencement of the offering of the Certificates and (ii) the Closing
Date, may constitute a violation of United States law, and that (x)
distributions of principal and interest and (y) the exchange of beneficial
interests in a Temporary Regulation S Global Certificate for beneficial
interests in the related Permanent Regulation S Global Certificate, in each
case, will be made in respect of such Certificates only following the delivery
by the Holder of a certification of non-U.S. beneficial ownership, at the times
and in the manner set forth in the Agreement.

                                     B-1-15
<PAGE>

                  You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

                                            [Name of Transferor]

                                            By: ________________________________
                                            Name:
                                            Title:

                                     B-1-16
<PAGE>

                                   EXHIBIT B-2
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                    ____________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE2

           Re:  Ace Securities Corp. Home Equity Loan Trust, Series 2004-HE2
                Asset Backed Pass-Through Certificates,
                Class B-1, Class B-2, Class CE, Class P and Class R Certificates
                ----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

                  Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act'), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.

                                            Very truly yours,

                                            ___________________________________
                                            (Transferor)

                                            By: _______________________________
                                            Name:
                                            Title:

<PAGE>

                            FORM OF TRANSFEREE LETTER

                                               _______________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE2

          Re:   Ace Securities Corp. Home Equity Loan Trust, Series 2004-HE2
                Asset Backed Pass-Through Certificates,
                Class B-1, Class B-2, Class CE, Class P and Class R Certificates
                ----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferee hereby
certifies as follows:

                  1. The Transferee understands that (a) the Certificates have
         not been and will not be registered or qualified under the Securities
         Act of 1933, as amended (the "Act") or any state securities law, (b)
         the Depositor is not required to so register or qualify the
         Certificates, (c) the Certificates may be resold only if registered and
         qualified pursuant to the provisions of the Act or any state securities
         law, or if an exemption from such registration and qualification is
         available, (d) the Pooling and Servicing Agreement contains
         restrictions regarding the transfer of the Certificates and (e) the
         Certificates will bear a legend to the foregoing effect.

                  2. The Transferee is acquiring the Certificates for its own
         account for investment only and not with a view to or for sale in
         connection with any distribution thereof in any manner that would
         violate the Act or any applicable state securities laws.

                  3. The Transferee is (a) a substantial, sophisticated
         institutional investor having such knowledge and experience in
         financial and business matters, and, in particular, in such matters
         related to securities similar to the Certificates, such that it is
         capable of evaluating the merits and risks of investment in the
         Certificates, (b) able to bear the economic risks of such an investment
         and (c) an "accredited investor" within the meaning of Rule 501(a)
         promulgated pursuant to the Act.

                  4. The Transferee has been furnished with, and has had an
         opportunity to review (a) a copy of the Pooling and Servicing Agreement
         and (b) such other information concerning the Certificates, the
         Mortgage Loans and the Depositor as has been requested by the
         Transferee from the Depositor or the Transferor and is relevant to the
         Transferee's decision to purchase the Certificates. The Transferee has
         had any questions arising from such review answered by the Depositor or
         the Transferor to the satisfaction of the Transferee.

                                     B-2-2
<PAGE>

                  5. The Transferee has not and will not nor has it authorized
         or will it authorize any person to (a) offer, pledge, sell, dispose of
         or otherwise transfer any Certificate, any interest in any Certificate
         or any other similar security to any person in any manner, (b) solicit
         any offer to buy or to accept a pledge, disposition of other transfer
         of any Certificate, any interest in any Certificate or any other
         similar security from any person in any manner, (c) otherwise approach
         or negotiate with respect to any Certificate, any interest in any
         Certificate or any other similar security with any person in any
         manner, (d) make any general solicitation by means of general
         advertising or in any other manner or (e) take any other action, that
         (as to any of (a) through (e) above) would constitute a distribution of
         any Certificate under the Act, that would render the disposition of any
         Certificate a violation of Section 5 of the 1933 Act or any state
         securities law, or that would require registration or qualification
         pursuant thereto. The Transferee will not sell or otherwise transfer
         any of the Certificates, except in compliance with the provisions of
         the Pooling and Servicing Agreement.

                  6. The Transferee: (a) is not an employee benefit or other
         plan subject to the prohibited transaction provisions of the Employee
         Retirement Income Security Act of 1974, as amended ("ERISA"), or
         Section 4975 of the Internal Revenue Code of 1986, as amended (the
         "Code") (each, a "Plan"), or any other person (including an investment
         manager, a named fiduciary or a trustee of any Plan) acting, directly
         or indirectly, on behalf of or purchasing any Certificate with "plan
         assets" of any Plan within the meaning of the Department of Labor
         ("DOL") regulation at 29 C.F.R. ss.12510.3-101 or (b) [[for Class CE,
         Class P and Class R] has provided the Trustee with an opinion of
         counsel on which the Depositor, the Master Servicer, the Securities
         Administrator, the Trustee and the Servicer may rely, acceptable to and
         in form and substance satisfactory to the Trustee to the effect that
         the purchase of Certificates is permissible under applicable law, will
         not constitute or result in any non-exempt prohibited transaction under
         ERISA or Section 4975 of the Code and will not subject the Trust Fund,
         the Trustee, the Master Servicer, the Securities Administrator, the
         Depositor or the Servicer to any obligation or liability (including
         obligations or liabilities under ERISA or Section 4975 of the Code) in
         addition to those undertaken in the Pooling and Servicing Agreement.]
         [[for Class B] represents and warrants that it has acquired and is
         holding such certificate in reliance on Prohibited Transaction
         Exemption ("PTE") 2002-41, and that it understands that there are
         certain conditions to the availability of PTE 2002-41, including that
         such certificate must be rated, at the time of purchase, not lower than
         "BBB-" (or its equivalent) by S&P, Fitch or Moody's Investors Service,
         Inc., and such certificate is so rated, and that it is an "accredited
         investor" as defined in Rule 501(a)(1) of Regulation D issued under the
         Securities Act and will obtain a representation from any transferee
         that such transferee is an accredited investor so long as it is
         required to obtain a representation regarding compliance with the
         Securities Act or (c)(i) it is an insurance company, (ii) the source of
         funds used to acquire or hold the certificate or interest therein is an
         "insurance company general account," as such term is defined in
         Prohibited Transaction Class Exemption ("PTCE") 95-60, and (iii) the
         conditions in Sections I and III of PTCE 95-60 have been satisfied.]

                                     B-2-3
<PAGE>

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 6 above.

                                            Very truly yours,

                                            By: ________________________________
                                            Name:
                                            Title:

                                   EXHIBIT B-3
                                   -----------

                        TRANSFER AFFIDAVIT AND AGREEMENT

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

         ___________________________ being duly sworn, deposes, represents and
warrants as follows:

         1.       I am a _____________________ of ______________________________
                  (the "Owner") a corporation duly organized and existing under
                  the laws of _________________________, the record owner of Ace
                  Securities Corp. Home Equity Loan Trust, Series 2004-HE2 Asset
                  Backed Pass-Through Certificates, Class R Certificates (the
                  "Class R Certificates"), on behalf of whom I make this
                  affidavit and agreement. Capitalized terms used but not
                  defined herein have the respective meanings assigned thereto
                  in the Pooling and Servicing Agreement pursuant to which the
                  Class R Certificates were issued.

         2.       The Owner (i) is and will be a "Permitted Transferee" as of
                  ____________________. ____ and (ii) is acquiring the Class R
                  Certificates for its own account or for the account of another
                  Owner from which it has received an affidavit in substantially
                  the same form as this affidavit. A "Permitted Transferee" is
                  any person other than a "disqualified organization" or a
                  possession of the United States. For this purpose, a
                  "disqualified organization" means the United States, any state
                  or political subdivision thereof, any agency or
                  instrumentality of any of the foregoing (other than an
                  instrumentality all of the activities of which are subject to
                  tax and, except for the Federal Home Loan Mortgage
                  Corporation, a majority of whose board of directors is not
                  selected by any such governmental entity) or any foreign
                  government, international organization or any agency or
                  instrumentality of such foreign government or organization,
                  any real electric or telephone cooperative, or any
                  organization (other than certain farmers'

                                     B-2-4
<PAGE>

                  cooperatives) that is generally exempt from federal income tax
                  unless such organization is subject to the tax on unrelated
                  business taxable income.

         3.       The Owner is aware (i) of the tax that would be imposed on
                  transfers of the Class R Certificates to disqualified
                  organizations under the Internal Revenue Code of 1986 that
                  applies to all transfers of the Class R Certificates after
                  April 31, 1988; (ii) that such tax would be on the transferor
                  or, if such transfer is through an agent (which person
                  includes a broker, nominee or middleman) for a non-Permitted
                  Transferee, on the agent; (iii) that the person otherwise
                  liable for the tax shall be relieved of liability for the tax
                  if the transferee furnishes to such person an affidavit that
                  the transferee is a Permitted Transferee and, at the time of
                  transfer, such person does not have actual knowledge that the
                  affidavit is false; and (iv) that each of the Class R
                  Certificates may be a "noneconomic residual interest" within
                  the meaning of proposed Treasury regulations promulgated under
                  the Code and that the transferor of a "noneconomic residual
                  interest" will remain liable for any taxes due with respect to
                  the income on such residual interest, unless no significant
                  purpose of the transfer is to impede the assessment or
                  collection of tax.

         4.       The Owner is aware of the tax imposed on a "pass-through
                  entity" holding the Class R Certificates if, at any time
                  during the taxable year of the pass-through entity, a
                  non-Permitted Transferee is the record holder of an interest
                  in such entity. (For this purpose, a "pass-through entity"
                  includes a regulated investment company, a real estate
                  investment trust or common trust fund, a partnership, trust or
                  estate, and certain cooperatives.)

         5.       The Owner is aware that the Securities Administrator will not
                  register the transfer of any Class R Certificate unless the
                  transferee, or the transferee's agent, delivers to the
                  Securities Administrator, among other things, an affidavit in
                  substantially the same form as this affidavit. The Owner
                  expressly agrees that it will not consummate any such transfer
                  if it knows or believes that any of the representations
                  contained in such affidavit and agreement are false.

         6.       The Owner consents to any additional restrictions or
                  arrangements that shall be deemed necessary upon advice of
                  counsel to constitute a reasonable arrangement to ensure that
                  the Class R Certificates will only be owned, directly or
                  indirectly, by an Owner that is a Permitted Transferee.

         7.       The Owner's taxpayer identification number is _______________.

         8.       The Owner has reviewed the restrictions set forth on the face
                  of the Class R Certificates and the provisions of Section
                  6.02(d) of the Pooling and Servicing Agreement under which the
                  Class R Certificates were issued (in particular, clauses
                  (iii)(A) and (iii)(B) of Section 6.02(d) which authorize the
                  Securities Administrator to deliver payments to a person other
                  than the Owner and negotiate a mandatory sale by the
                  Securities Administrator in the event that the Owner holds
                  such Certificate in violation of Section 6.02(d)); and that
                  the Owner

                                     B-3-2
<PAGE>

                  expressly agrees to be bound by and to comply with such
                  restrictions and provisions.

         9.       The Owner is not acquiring and will not transfer the Class R
                  Certificates in order to impede the assessment or collection
                  of any tax.

         10.      The Owner anticipates that it will, so long as it holds the
                  Class R Certificates, have sufficient assets to pay any taxes
                  owed by the holder of such Class R Certificates, and hereby
                  represents to and for the benefit of the person from whom it
                  acquired the Class R Certificates that the Owner intends to
                  pay taxes associated with holding such Class R Certificates as
                  they become due, fully understanding that it may incur tax
                  liabilities in excess of any cash flows generated by the Class
                  R Certificates.

         11.      The Owner has no present knowledge that it may become
                  insolvent or subject to a bankruptcy proceeding for so long as
                  it holds the Class R Certificates.

         12.      The Owner has no present knowledge or expectation that it will
                  be unable to pay any United States taxes owed by it so long as
                  any of the Certificates remain outstanding.

         13.      The Owner is not acquiring the Class R Certificates with the
                  intent to transfer the Class R Certificates to any person or
                  entity that will not have sufficient assets to pay any taxes
                  owed by the holder of such Class R Certificates, or that may
                  become insolvent or subject to a bankruptcy proceeding, for so
                  long as the Class R Certificates remain outstanding.

         14.      The Owner will, in connection with any transfer that it makes
                  of the Class R Certificates, obtain from its transferee the
                  representations required by Section 6.02(d) of the Pooling and
                  Servicing Agreement under which the Class R Certificate were
                  issued and will not consummate any such transfer if it knows,
                  or knows facts that should lead it to believe, that any such
                  representations are false.

         15.      The Owner will, in connection with any transfer that it makes
                  of the Class R Certificates, deliver to the Securities
                  Administrator an affidavit, which represents and warrants that
                  it is not transferring the Class R Certificates to impede the
                  assessment or collection of any tax and that it has no actual
                  knowledge that the proposed transferee: (i) has insufficient
                  assets to pay any taxes owed by such transferee as holder of
                  the Class R Certificates; (ii) may become insolvent or subject
                  to a bankruptcy proceeding for so long as the Class R
                  Certificates remains outstanding; and (iii) is not a
                  "Permitted Transferee".

         16.      The Owner is a citizen or resident of the United States, a
                  corporation, partnership or other entity created or organized
                  in, or under the laws of, the United States or any political
                  subdivision thereof, or an estate or trust whose income from
                  sources without the United States may be included in gross
                  income for United States

                                     B-3-3
<PAGE>

                  federal income tax purposes regardless of its connection with
                  the conduct of a trade or business within the United States.

         17.      The Owner of the Class R Certificate, hereby agrees that in
                  the event that the Trust Fund created by the Pooling and
                  Servicing Agreement is terminated pursuant to Section 10.01
                  thereof, the undersigned shall assign and transfer to the
                  Holders of the Class CE and the Class P Certificates any
                  amounts in excess of par received in connection with such
                  termination. Accordingly, in the event of such termination,
                  the Securities Administrator is hereby authorized to withhold
                  any such amounts in excess of par and to pay such amounts
                  directly to the Holders of the Class CE and the Class P
                  Certificates. This agreement shall bind and be enforceable
                  against any successor, transferee or assigned of the
                  undersigned in the Class R Certificate. In connection with any
                  transfer of the Class R Certificate, the Owner shall obtain an
                  agreement substantially similar to this clause from any
                  subsequent owner.

                                     B-3-4
<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
_________________, ____.

                                            [OWNER]

                                            By:________________________________
                                            Name:
                                            Title:       [Vice] President

ATTEST:

By: _________________________________
Name:
Title:      [Assistant] Secretary

                  Personally appeared before me the above-named _______________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a [Vice] President of the Owner, and acknowledged to me
that [he/she] executed the same as [his/her] free act and deed and the free act
and deed of the Owner.

                  Subscribed and sworn before me this ______________ day of
__________, ____.

                                            ____________________________________
                                                           Notary Public

                                            County of  _________________________
                                            State of ___________________________

                                            My Commission expires:

                                     B-3-5
<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

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

                  _________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ____________________ of _________________________
(the "Owner"), a corporation duly organized and existing under the laws of
_____________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee or a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit B-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                     B-3-6
<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
________________, ____.

                                     [OWNER]

                                     By:_______________________________________
                                     Name:
                                     Title:            [Vice] President

ATTEST:

By: ______________________________
Name:
Title.   [Assistant] Secretary

                  Personally appeared before me the above-named
_________________, known or proved to me to be the same person who executed the
foregoing instrument and to be a [Vice] President of the Owner, and acknowledged
to me that [he/she] executed the same as [his/her] free act and deed and the
free act and deed of the Owner.

                  Subscribed and sworn before me this ______ day of
_____________, ____.

                                     ___________________________________________
                                                       Notary Public

                                     County of  ________________________________
                                     State of __________________________________

                                     My Commission expires:

<PAGE>

                                    EXHIBIT C

                         FORM OF SERVICER CERTIFICATION

Re:      __________ (the "Trust")

         Mortgage Pass-Through Certificates, Series 2004-HE2

I, [identify the certifying individual], certify to ACE Securities Corp. (the
"Depositor"), HSBC Bank USA, National Association (the "Trustee") and Wells
Fargo Bank, National Association (the "Master Servicer"), and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:

         1.       Based on my knowledge, the information in the Annual Statement
                  of Compliance, the Annual Independent Public Accountant's
                  Servicing Report and all servicing reports, officer's
                  certificates and other information relating to the servicing
                  of the Mortgage Loans submitted to the Master Servicer taken
                  as a whole, does not contain any untrue statement of a
                  material fact or omit to state a material fact (constituting
                  information required to be provided by Ocwen Federal Bank FSB
                  (the "Servicer") under the Agreement) necessary to make the
                  statements made, in light of the circumstances under which
                  such statements were made, not misleading as of the date of
                  this certification.

         2.       Based on my knowledge, the servicing information required to
                  be provided to Master Servicer by the Servicer under the
                  Agreement has been provided to the Master Servicer.

         3.       I am responsible for reviewing the activities performed by the
                  Servicer under the Agreement and based upon my knowledge and
                  the review required by the Agreement, and except as disclosed
                  in the Annual Statement of Compliance or the Annual
                  Independent Public Accountant's Servicing Report submitted to
                  the Master Servicer, the Servicer has fulfilled its
                  obligations under the Agreement; and

         4.       I have disclosed to the Master Servicer all significant
                  deficiencies relating to the servicer's compliance with the
                  minimum servicing standards in accordance with a review
                  conducted in compliance with the Uniform Single Attestation
                  Program for Mortgage Bankers or similar standard as set forth
                  in the pooling and servicing agreement.

Capitalized terms used and not otherwise defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement, dated as of September
1, 2004, among ACE Securities Corp., Ocwen Federal Bank FSB, Wells Fargo Bank,
N.A. and HSBC Bank USA, National Association

                                      C-1
<PAGE>

Date: _______________________________

_____________________________________
[Signature]

_____________________________________
[Title]

                                      C-2
<PAGE>

                                    EXHIBIT D

                            FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
Ocwen Federal Bank FSB
1675 Palm Lakes Boulevard, Suite 10A
West Palm Beach, Florida 33401
Attn: _________________________________

                            LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that ________________________, having its
principal place of business at _____________________, as Trustee (the "Trustee")
pursuant to that Pooling and Servicing Agreement among (the "Depositor"), Ocwen
Federal Bank FSB ___________________________ (the "Servicer"), and the Trustee,
dated as of September 1, 2004 (the "Pooling and Servicing Agreement"), hereby
constitutes and appoints the Servicer, by and through the Servicer's officers,
the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name, place and
stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by the Servicer pursuant to the Pooling and Servicing Agreement for the
purpose of performing all acts and executing all documents in the name of the
Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.

This appointment shall apply to the following enumerated transactions only:

1.       The modification or re-recording of a Mortgage or Deed of Trust, where
         said modification or re-recordings is for the purpose of correcting the
         Mortgage or Deed of Trust to conform same to the original intent of the
         parties thereto or to correct title errors discovered after such title
         insurance was issued and said modification or re-recording, in either
         instance, does not adversely affect the lien of the Mortgage or Deed of
         Trust as insured.

2.       The subordination of the lien of a Mortgage or Deed of Trust to an
         easement in favor of a public utility company of a government agency or
         unit with powers of eminent domain; this section shall include, without
         limitation, the execution of partial

                                      C-3
<PAGE>

         satisfactions/releases, partial reconveyances or the execution or
         requests to trustees to accomplish same.

3.       The conveyance of the properties to the mortgage insurer, or the
         closing of the title to the property to be acquired as real estate
         owned, or conveyance of title to real estate owned.

4.       The completion of loan assumption agreements.

5.       The full satisfaction/release of a Mortgage or Deed of Trust or full
         conveyance upon payment and discharge of all sums secured thereby,
         including, without limitation, cancellation of the related Mortgage
         Note.

6.       The assignment of any Mortgage or Deed of Trust and the related
         Mortgage Note, in connection with the repurchase of the mortgage loan
         secured and evidenced thereby.

7.       The full assignment of a Mortgage or Deed of Trust upon payment and
         discharge of all sums secured thereby in conjunction with the
         refinancing thereof, including, without limitation, the assignment of
         the related Mortgage Note.

8.       With respect to a Mortgage or Deed of Trust, the foreclosure, the
         taking of a deed in lieu of foreclosure, or the completion of judicial
         or non-judicial foreclosure or termination, cancellation or rescission
         of any such foreclosure, including, without limitation, any and all of
         the following acts:

         a.       the substitution of trustee(s) serving under a Deed of Trust,
                  in accordance with state law and the Deed of Trust;

         b.       the preparation and issuance of statements of breach or
                  non-performance;

         c.       the preparation and filing of notices of default and/or
                  notices of sale;

         d.       the cancellation/rescission of notices of default and/or
                  notices of sale;

         e.       the taking of a deed in lieu of foreclosure; and

         f.       the preparation and execution of such other documents and
                  performance of such other actions as may be necessary under
                  the terms of the Mortgage, Deed of Trust or state law to
                  expeditiously complete said transactions in paragraphs 8.a.
                  through 8.e., above.

The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.

                                      C-4
<PAGE>

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.

IN WITNESS WHEREOF, _______________________ as Trustee pursuant to that Pooling
and Servicing Agreement among the Depositor, the Servicer, and the Trustee,
dated as of 1, 200__ (____________________ Mortgage Loan Asset Backed
Certificates, Series 200__-___), has caused its corporate seal to be hereto
affixed and these presents to be signed and acknowledged in its name and behalf
by __________________ its duly elected and authorized Vice President this ____
day of ___________, 200__.

                                      __________________________________________
                                      as Trustee for _____ Mortgage Loan Asset
                                         Backed Certificates, Series 200__-___

                                     By ________________________________________

STATE OF ______________________

COUNTY OF _____________________

On ________________ ________, 200__, before me, the undersigned, a Notary Public
in and for said state, personally appeared __________________, Vice President of
______________________ as Trustee for ____________________ Mortgage Loan Asset
Backed Certificates, Series 200__-___, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed that same in his/her authorized capacity, and that by his/her
signature on the instrument the entity upon behalf of which the person acted and
executed the instrument.

WITESS my hand and official seal.
         (SEAL)
                                            ____________________________________
                                                                   Notary Public
                                  My Commission Expires ________________________

                                      C-5
<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                      C-6
<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                                      C-1
<PAGE>

                                   SCHEDULE 3

                                   [RESERVED]

                                      C-1
<PAGE>

                                   SCHEDULE 4

                   STANDARD FILE LAYOUT- DELINQUENCY REPORTING

<TABLE>
<CAPTION>
EXHIBIT 1: STANDARD FILE LAYOUT - DELINQUENCY REPORTING

===================================================================================================================================
  COLUMN/HEADER NAME                                   DESCRIPTION                                DECIMAL        FORMAT COMMENT
===================================================================================================================================
<S>                              <C>                                                              <C>            <C>
SERVICER_LOAN_NBR                A unique number assigned to a loan by the Servicer.
                                 This may be different than the LOAN_NBR
-----------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR                         A unique identifier assigned to each
                                 loan by the originator.
-----------------------------------------------------------------------------------------------------------------------------------
CLIENT_NBR                       Servicer Client Number
-----------------------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR                Contains a unique number as assigned
                                 by an external servicer to identify a
                                 group of loans in their system.
-----------------------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME              First Name of the Borrower.
-----------------------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME               Last name of the borrower.
-----------------------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS                     Street Name and Number of Property
-----------------------------------------------------------------------------------------------------------------------------------
PROP_STATE                       The state where the  property located.
-----------------------------------------------------------------------------------------------------------------------------------
PROP_ZIP                         Zip code where the property is located.
-----------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE           The date that the borrower's next payment is due to                               MM/DD/YYYY
                                 the servicer at the end of processing cycle, as
                                 reported by Servicer.
-----------------------------------------------------------------------------------------------------------------------------------
LOAN_TYPE                        Loan Type (i.e. FHA, VA, Conv)
-----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE            The date a particular bankruptcy claim was filed.                                 MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE          The chapter under which the bankruptcy was filed.
-----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR              The case number assigned by the court
                                 to the bankruptcy filing.
-----------------------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE           The payment due date once the bankruptcy has been                                 MM/DD/YYYY
                                 approved by the courts
-----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE       The Date The Loan Is Removed From Bankruptcy. Either                              MM/DD/YYYY
                                 by Dismissal, Discharged and/or a Motion For Relief
                                 Was Granted.
-----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE               The Date The Loss Mitigation Was Approved By The                                  MM/DD/YYYY
                                 Servicer
-----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE                    The Type Of Loss Mitigation Approved For A Loan Such As;
-----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE           The Date The Loss Mitigation /Plan Is Scheduled To                                MM/DD/YYYY
                                 End/Close
-----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE           The Date The Loss Mitigation Is Actually Completed                                MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE             The date DA Admin sends a letter to the servicer with                             MM/DD/YYYY
                                 instructions to begin foreclosure proceedings.
-----------------------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE           Date File Was Referred To Attorney to Pursue                                      MM/DD/YYYY
                                 Foreclosure
-----------------------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE                 Notice of 1st legal filed by an Attorney in a                                     MM/DD/YYYY
                                 Foreclosure Action
-----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE        The date by which a foreclosure sale is expected to                               MM/DD/YYYY
                                 occur.
-----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE                 The actual date of the foreclosure sale.                                          MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT                  The amount a property sold for at the foreclosure sale.             2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE              The date the servicer initiates eviction of the                                   MM/DD/YYYY
                                 borrower.
-----------------------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE          The date the court revokes legal possession of the                                MM/DD/YYYY
                                 property from the borrower.
-----------------------------------------------------------------------------------------------------------------------------------
LIST_PRICE                       The price at which an REO property is marketed.                     2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
LIST_DATE                        The date an REO property is listed at a particular                                MM/DD/YYYY
                                 price.
-----------------------------------------------------------------------------------------------------------------------------------

                                      C-1
<PAGE>

<CAPTION>
<S>                              <C>                                                              <C>            <C>
-----------------------------------------------------------------------------------------------------------------------------------
OFFER_AMT                        The dollar value of an offer for an REO property.                   2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME                  The date an offer is received by DA Admin or by the                               MM/DD/YYYY
                                 Servicer.
-----------------------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE                 The date the REO sale of the property is scheduled to                             MM/DD/YYYY
                                 close.
-----------------------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE          Actual Date Of REO Sale                                                           MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE                    Classification of how the property is occupied.
-----------------------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE              A code that indicates the condition of the property.
-----------------------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE             The date a  property inspection is performed.                                     MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE                   The date the appraisal was done.                                                  MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL                    The current "as is" value of the property based on
                                 2 brokers price opinion or appraisal.
-----------------------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL                The amount the property would be worth if repairs are               2
                                 completed pursuant to a broker's price opinion or
                                 appraisal.
-----------------------------------------------------------------------------------------------------------------------------------
IF APPLICABLE:
-----------------------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE               FNMA Code Describing Status of Loan
-----------------------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE               The circumstances which caused a borrower to stop
                                 paying on a loan. Code indicates the reason why the
                                 loan is in default for this cycle.
-----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE              Date Mortgage Insurance Claim Was Filed With Mortgage                             MM/DD/YYYY
                                 Insurance Company.
-----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT                     Amount of Mortgage Insurance Claim Filed                                       No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE               Date Mortgage Insurance Company Disbursed Claim Payment                           MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID                Amount Mortgage Insurance Company Paid On Claim                     2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE            Date Claim Was Filed With Pool Insurance Company                                  MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT                   Amount of Claim Filed With Pool Insurance Company                   2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE             Date Claim Was Settled and The Check Was Issued By The                            MM/DD/YYYY
                                 Pool Insurer
-----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID              Amount Paid On Claim By Pool Insurance Company                      2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE      Date FHA Part A Claim Was Filed With HUD                                          MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT             Amount of FHA Part A Claim Filed                                    2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE       Date HUD Disbursed Part A Claim Payment                                           MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT        Amount HUD Paid on Part A Claim                                     2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE      Date FHA Part B Claim Was Filed With HUD                                          MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT             Amount of FHA Part B Claim Filed                                    2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE       Date HUD Disbursed Part B Claim Payment                                           MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT        Amount HUD Paid on Part B Claim                                     2          No commas(,) or
                                                                                                                dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE              Date VA Claim Was Filed With the Veterans Admin                                   MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE               Date Veterans Admin. Disbursed VA Claim Payment                                   MM/DD/YYYY
-----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT                Amount Veterans Admin. Paid on VA Claim                             2          No commas(,) or
                                                                                                                 dollar signs ($)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      C-2

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING

The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:

o        ASUM-   Approved Assumption
o        BAP-    Borrower Assistance Program
o        CO-     Charge Off
o        DIL-    Deed-in-Lieu
o        FFA-    Formal Forbearance Agreement
o        MOD-    Loan Modification
o        PRE-    Pre-Sale
o        SS-     Short Sale
o        MISC-   Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Wells
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.

The OCCUPANT CODE field should show the current status of the property code as
follows:
o        Mortgagor
o        Tenant
o        Unknown
o        Vacant

The PROPERTY CONDITION field should show the last reported condition of the
property as follows:

o        Damaged
o        Excellent
o        Fair
o        Gone
o        Good
o        Poor
o        Special Hazard
o        Unknown

                                      C-3
<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:

               DELINQUENCY CODE     DELINQUENCY DESCRIPTION
               --------------------------------------------------------------
               001                  FNMA-Death of principal mortgagor
               002                  FNMA-Illness of principal mortgagor
               003                  FNMA-Illness of mortgagor's family member
               004                  FNMA-Death of mortgagor's family member
               005                  FNMA-Marital difficulties
               006                  FNMA-Curtailment of income
               007                  FNMA-Excessive Obligation
               008                  FNMA-Abandonment of property
               009                  FNMA-Distant employee transfer
               011                  FNMA-Property problem
               012                  FNMA-Inability to sell property
               013                  FNMA-Inability to rent property
               014                  FNMA-Military Service
               015                  FNMA-Other
               016                  FNMA-Unemployment
               017                  FNMA-Business failure
               019                  FNMA-Casualty loss
               022                  FNMA-Energy environment costs
               023                  FNMA-Servicing problems
               026                  FNMA-Payment adjustment
               027                  FNMA-Payment dispute
               029                  FNMA-Transfer of ownership pending
               030                  FNMA-Fraud
               031                  FNMA-Unable to contact borrower
               INC                  FNMA-Incarceration

                                      C-4
<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:

           STATUS CODE        STATUS DESCRIPTION
           -----------        ------------------
               09             Forbearance
               17             Pre-foreclosure Sale Closing Plan Accepted
               24             Government Seizure
               26             Refinance
               27             Assumption
               28             Modification
               29             Charge-Off
               30             Third Party Sale
               31             Probate
               32             Military Indulgence
               43             Foreclosure Started
               44             Deed-in-Lieu Started
               49             Assignment Completed
               61             Second Lien Considerations
               62             Veteran's Affairs-No Bid
               63             Veteran's Affairs-Refund
               64             Veteran's Affairs-Buydown
               65             Chapter 7 Bankruptcy
               66             Chapter 11 Bankruptcy
               67             Chapter 13 Bankruptcy

                                      C-5
<PAGE>

EXHIBIT 3: CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
1.       The numbers on the form correspond with the numbers listed below.

         LIQUIDATION AND ACQUISITION EXPENSES:
         1.       The Actual Unpaid Principal Balance of the Mortgage Loan. For
                  documentation, an Amortization Schedule from date of default
                  through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         2.       The Total Interest Due less the aggregate amount of servicing
                  fee that would have been earned if all delinquent payments had
                  been made as agreed. For documentation, an Amortization
                  Schedule from date of default through liquidation breaking out
                  the net interest and servicing fees advanced is required.

         3.       Accrued Servicing Fees based upon the Scheduled Principal
                  Balance of the Mortgage Loan as calculated on a monthly basis.
                  For documentation, an Amortization Schedule from date of
                  default through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         4-12.    Complete as applicable. All line entries must be supported by
                  copies of appropriate statements, vouchers, receipts, bills,
                  canceled checks, etc., to document the expense. Entries not
                  properly documented will not be reimbursed to the Servicer.

         13.      The total of lines 1 through 12.

         2.       CREDITS:

         14-21.   Complete as applicable. All line entries must be supported by
                  copies of the appropriate claims forms, EOBs, HUD-1 and/or
                  other proceeds verification, statements, payment checks, etc.
                  to document the credit. If the Mortgage Loan is subject to a
                  Bankruptcy Deficiency, the difference between the Unpaid
                  Principal Balance of the Note prior to the Bankruptcy
                  Deficiency and the Unpaid Principal Balance as reduced by the
                  Bankruptcy Deficiency should be input on line 20.

         22.      The total of lines 14 through 21.

         PLEASE   NOTE: For HUD/VA loans, use line (15) for Part A/Initial
                  proceeds and line (16) for Part B/Supplemental proceeds.
         3.       TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)

         23.      The total derived from subtracting line 22 from 13. If the
                  amount represents a realized gain, show the amount in
                  parenthesis ( ).

                                      C-6
<PAGE>

EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332

                             WELLS FARGO BANK, N.A.
                        CALCULATION OF REALIZED LOSS/GAIN

         Prepared by:  __________________              Date:  _______________
         Phone:  ______________________   Email Address:_____________________

______________________     _______________________      ________________________
  Servicer Loan No.            Servicer Name                Servicer Address

______________________     _______________________      ________________________

         WELLS FARGO BANK, N.A. Loan No._____________________________
         Borrower's Name:_________________________________________________
         Property Address:________________________________________________
         LIQUIDATION AND ACQUISITION EXPENSES:
         (1)  Actual Unpaid Principal Balance of Mortgage Loan $___________ (1)
         (2)  Interest accrued at Net Rate                      ___________ (2)
         (3)  Accrued Servicing Fees                            ___________ (3)
         (4)  Attorney's Fees                                   ___________ (4)
         (5)  Taxes                                             ___________ (5)
         (6)  Property Maintenance                              ___________ (6)
         (7)  MI/Hazard Insurance Premiums                      ___________ (7)
         (8)  Utility Expenses                                  ___________ (8)
         (9)  Appraisal/BPO                                     ___________ (9)
         (10) Property Inspections                              ___________ (10)
         (11) FC Costs/Other Legal Expenses                     ___________ (11)
         (12) Other (itemize)                                  $___________ (12)
                  Cash for Keys__________________________       ___________
                  HOA/Condo Fees_________________________       ___________
                  _______________________________________
                  _______________________________________
                  TOTAL EXPENSES                               $ __________ (13)
         CREDITS:
         (14) Escrow Balance                                   $___________ (14)
         (15) HIP Refund                                        ___________ (15)
         (16) Rental Receipts                                   ___________ (16)
         (17) Hazard Loss Proceeds                              ___________ (17)
         (18) Primary Mortgage Insurance Proceeds               ___________ (18)
         (19) Pool Insurance Proceeds                           ___________ (19)
         (20) Proceeds from Sale of Acquired Property           ___________ (20)

                                      C-7

<PAGE>

         (21) Other (itemize)                                   ___________ (21)
              _________________________________________         ___________
              _________________________________________         ___________
              TOTAL CREDITS                                    $___________ (22)

         TOTAL REALIZED LOSS (OR AMOUNT OF GAIN)               $___________ (23)

                                   SCHEDULE 5

                    STANDARD FILE LAYOUT- SCHEDULED/SCHEDULED

<TABLE>
<CAPTION>
EXHIBIT 1: STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED

=================================================================================================================================
COLUMN NAME                                   DESCRIPTION                           DECIMAL    FORMAT COMMENT
=================================================================================================================================
<S>                             <C>                                                 <C>        <C>
LOAN_NBR                        Loan Number assigned by investor                               Text up to 10 digits
---------------------------------------------------------------------------------------------------------------------------------
SERVICER LOAN_NBR               Servicer Loan Number                                           Text up to 10 digits
---------------------------------------------------------------------------------------------------------------------------------
BORROWER_NAME                   Mortgagor name assigned to Note                                Max length of 30
---------------------------------------------------------------------------------------------------------------------------------
SCHED_PMT_AMT                   P&I constant                                           2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE                   Gross Interest Rate                                    4       Max length of 6
---------------------------------------------------------------------------------------------------------------------------------
NET_RATE                        Gross Interest Rate less the Service Fee Rate          4       Max length of 6
---------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE                   Service Fee Rate                                       4       Max length of 6
---------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT                     ARM loan's forecasted P&I constant                     2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE                   ARM loan's forecasted Gross Interest Rate              4       Max length of 6
---------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE                  ARM loan's index Rate used                             4       Max length of 6
---------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_BAL                    Beginning Actual Balance                               2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
ACTL_END_BAL                    Ending Actual Balance                                  2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
NEXT_DUE_DATE                   Borrower's next due date                                       MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_1                      Curtailment Amount                                     2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_1                     Due date Curtailment was applied to                            MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1                 Curtailment Interest if applicable                     2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_2                      Curtailment Amount 2                                   2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_2                     Due date Curtailment was applied to                            MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT2                  Curtailment Interest if applicable                     2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_3                      Curtailment Amount 3                                   2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_3                     Due date Curtailment was applied to                            MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT3                   Curtailment Interest, if applicable                    2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_BAL                   Beginning Scheduled Balance                            2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
SCHED_END_BAL                   Ending Scheduled Balance                               2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT                  Scheduled Principal portion of P&I                     2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
                                Scheduled Net Interest (less Service Fee)
SCHED_NET_INT                   portion of P&I                                         2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
                                Liquidation  Principal  Amt to bring  balance  to
LIQ_AMT                         zero                                                   2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
PIF_DATE                        Liquidation Date                                               MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE                     Either 60 for liquidation or 65 for Repurchase                 Max length of 2
---------------------------------------------------------------------------------------------------------------------------------
PRIN_ADJ_AMT                    Principal Adjustments made to loan, if applicable      2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT                     Interest Adjustment made to loan, if applicable        2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT          Prepayment penalty amount, if applicable               2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
                                Soldier and Sailor Adjustment amount, if
SOILDER_SAILOR ADJ AMT          applicable                                             2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
NON ADV LOAN AMT                Non Recoverable Loan Amount, if applicable             2       No commas(,) or dollar signs ($)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]