Document:

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                                                                  EXECUTION COPY

                      GREENPOINT MORTGAGE SECURITIES INC.,
                                    Sponsor,

                       GREENPOINT MORTGAGE FUNDING, INC.,
                                    Servicer,

                    GREENPOINT HOME EQUITY LOAN TRUST 2000-3,
                                     Issuer,

                                       and

                             BANKERS TRUST COMPANY,
                                Indenture Trustee

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

                          SALE AND SERVICING AGREEMENT

                          Dated as of December 1, 2000

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

                       Home Equity Loan Asset-Backed Notes

                                  Series 2000-3

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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I DEFINITIONS .......................................................  1
     Section 1.01. Definitions ..............................................  1
     Section 1.02. Other Definitional Provisions ............................  1
     Section 1.03. Interest Calculations ....................................  2

ARTICLE II Conveyance of Mortgage Loans; Original Issuance of Notes;
               Tax Treatment ................................................  2
     Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to
                     Fund Advances Under Credit Line Agreements .............  2
     Section 2.02. Further Encumbrance of Trust Property ....................  6
     Section 2.03. Acceptance by Indenture Trustee; Certain Substitution of
                     Mortgage Loans .........................................  7
     Section 2.04. Representations and Warranties Regarding the Servicer
                     and the Sponsor ........................................  8
     Section 2.05. Representations and Warranties of the Sponsor Regarding
                     the Mortgage Loans; Removal of Certain Mortgage Loans .. 11
     Section 2.06. Covenants of the Sponsor ................................. 24
     Section 2.07. Removal of Mortgage Loans at Election of Issuer .......... 25
     Section 2.08. Execution and Authentication of Notes .................... 26
     Section 2.09. Tax Treatment ............................................ 26

ARTICLE III Administration and Servicing of Mortgage Loans .................. 27
     Section 3.01. The Servicer ............................................. 27
     Section 3.02. Collection of Certain Mortgage Loan Payments ............. 28
     Section 3.03. Withdrawals from the Collection Account .................. 30
     Section 3.04. Maintenance of Hazard Insurance; Property Protection
                     Expenses ............................................... 30
     Section 3.05. Assumption and Modification Agreements ................... 31
     Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
                     Certain Mortgage Loans ................................. 32
     Section 3.07. Indenture Trustee to Cooperate ........................... 32
     Section 3.08. Servicing Compensation; Payment of Certain Expenses by
                     Servicer ............................................... 33
     Section 3.09. Annual Statement as to Compliance ........................ 34
     Section 3.10. Annual Servicing Report .................................. 34
     Section 3.11. Annual Opinion of Counsel ................................ 34
     Section 3.12. Access to Certain Documentation and Information Regarding
                     the Mortgage Loans ..................................... 34
     Section 3.13. Maintenance of Certain Servicing Insurance Policies ...... 35
     Section 3.14. Reports to the Securities and Exchange Commission ........ 35
     Section 3.15. Tax Returns .............................................. 36
     Section 3.16. Information Required by the Internal Revenue Service
                     Generally and Reports of Foreclosures and Abandonments
                     of Mortgaged Property .................................. 36

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     Section 3.17. Reporting Requirements ................................... 36

ARTICLE IV SERVICING CERTIFICATE ............................................ 36
     Section 4.01. Servicing Certificate .................................... 36
     Section 4.02. Reserved. ................................................ 37
     Section 4.03. The Indenture Trustee Remittance Report .................. 37
     Section 4.04. Loan Data Remittance Report .............................. 38
     Section 4.05. Reserve Fund ............................................. 38

ARTICLE V The Servicer and the Sponsor ...................................... 38
     Section 5.01. Liability of the Servicer and the Sponsor ................ 38
     Section 5.02. Merger or Consolidation of, or Assumption of the
                     Obligations of, the Servicer or the Sponsor ............ 38
     Section 5.03. Limitation on Liability of the Servicer and Others ....... 38
     Section 5.04. Servicer Not to Resign ................................... 39
     Section 5.05. Delegation of Duties ..................................... 40
     Section 5.06. Indemnification of the Trust by the Servicer ............. 40
     Section 5.07. Indemnification of the Trust by the Sponsor .............. 40
     Section 5.08. Limitation on Liability of the Sponsor ................... 41

ARTICLE VI Servicing Termination ............................................ 41
     Section 6.01. Events of Servicing Termination .......................... 41
     Section 6.02. Indenture Trustee to Act; Appointment of Successor ....... 43
     Section 6.03. Notification to Noteholders and Residual
                     Certificateholders ..................................... 44

ARTICLE VII Termination ..................................................... 44
     Section 7.01. Termination .............................................. 44

ARTICLE VIII Administrative Duties of the Servicer .......................... 46
     Section 8.01. Administrative Duties .................................... 46
     Section 8.02. Records .................................................. 48
     Section 8.03. Additional Information to be Furnished to the Issuer ..... 48

ARTICLE IX Miscellaneous Provisions ......................................... 48
     Section 9.01. Amendment ................................................ 48
     Section 9.02. Recordation of Agreement ................................. 49
     Section 9.03. Limitation on Rights of Noteholders ...................... 50
     Section 9.04. Governing Law ............................................ 50
     Section 9.05. Notices .................................................. 50
     Section 9.06. Severability of Provisions ............................... 51
     Section 9.07. Assignment ............................................... 51
     Section 9.08. Third-Party Beneficiaries ................................ 51
     Section 9.09. Counterparts ............................................. 51
     Section 9.10. Effect of Headings and Table of Contents ................. 51
     Section 9.11. Insurance Agreement ...................................... 52
     Section 9.12. Nonpetition Covenant ..................................... 52

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EXHIBITS

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

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

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

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

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

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

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            SALE AND SERVICING AGREEMENT, dated as of December 1, 2000, (the
"Agreement") among GREENPOINT HOME EQUITY LOAN TRUST 2000-3, a Delaware business
trust (the "Issuer" or "Trust"), GREENPOINT MORTGAGE SECURITIES INC., a Delaware
corporation (the "Sponsor"), GREENPOINT MORTGAGE FUNDING, INC., a New York
corporation (the "Servicer"), and BANKERS TRUST COMPANY (the "Indenture
Trustee").

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

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

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

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

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

                                  ARTICLE I

                                 DEFINITIONS

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

     Section 1.02.   Other Definitional Provisions.

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

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

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

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

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

                                  ARTICLE II

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

     Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund
Advances Under Credit Line Agreements.

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

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

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

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

          (i)     with respect to any Closed-End Mortgage Loan, the original
     Mortgage Note endorsed in blank or endorsed with the following: "Bankers
     Trust Company as Indenture Trustee for the GreenPoint Home Equity Loan
     Trust 2000-3", and with respect to any HELOC Mortgage Loan, the original
     Credit Line Agreement;

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

          (iii)   the original recorded Mortgage or, if, in connection with any
     Mortgage Loan, the original recorded Mortgage with evidence of recording
     thereon cannot be delivered on or prior to the Closing Date because of a
     delay caused by the public recording office where such original Mortgage
     has been delivered for recordation or because such original Mortgage has
     been lost, the Sponsor shall deliver or cause to be

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     delivered to the Indenture Trustee, a true and correct copy of such
     Mortgage, together with (i) in the case of a delay caused by the public
     recording office, an Officer's Certificate of the Sponsor stating that such
     original Mortgage has been dispatched to the appropriate public recording
     official or (ii) in the case of an original Mortgage that has been lost, a
     certificate by the appropriate county recording office where such Mortgage
     is recorded;

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

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

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

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

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

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

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

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now existing or hereafter created, and the other property described above and
all proceeds thereof; and this Agreement shall constitute a security agreement
under applicable law.

     (e) Within 90 days following delivery of the Mortgage Files to the
Indenture Trustee pursuant to this Section, the Indenture Trustee shall review
each such Mortgage File to ascertain that all required documents set forth in
this Section 2.01 have been executed and received, and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule and in so
doing the Indenture Trustee may rely on the purported due execution and
genuineness of any signature thereon. If within such 90-day period the Indenture
Trustee finds any document constituting a part of a Mortgage File not to have
been executed or received or to be unrelated to the Mortgage Loans identified in
said Mortgage Loan Schedule or, if in the course of its review, the Indenture
Trustee determines that such Mortgage File is otherwise defective in any
material respect, the Indenture Trustee shall promptly upon the conclusion of
its review notify the Sponsor and the Insurer, and the Sponsor shall have a
period of 90 days after such notice within which to correct or cure any such
defect.

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

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

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

     In connection with any transfer and assignment of an Eligible Substitute
Mortgage Loan to the Indenture Trustee on behalf of the Trust, the Sponsor
agrees to cause to be delivered to the Indenture Trustee the items described in
Section 2.01(c) on the date of such transfer and

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assignment or, if a later delivery time is permitted by Section 2.01(c), then no
later than such later delivery time.

     (h) Each Defective Mortgage Loan that is required to be repurchased or
substituted pursuant to the provisions this Agreement or the Purchase Agreement
shall, upon such repurchase or substitution in accordance with the provisions
hereof, be released from the Trust and from the lien created by the Indenture.
As to each Mortgage Loan released from the Trust in connection with the
repurchase thereof or the conveyance of an Eligible Substitute Mortgage Loan
therefor, the Indenture Trustee will transfer, assign, set over and otherwise
convey without recourse, to or upon the order of the Sponsor, all of its right,
title and interest in and to such released Mortgage Loan and all the Trust's
right title and interest to principal collected and interest accruing on such
released Mortgage Loan on and after the first day of the calendar month in which
such Mortgage Loan is released; provided, however, that the Trust shall reserve
and retain all right, title and interest in and to payments of principal and
interest collected on such released Mortgage Loan prior to such date.

     Section 2.02.   Further Encumbrance of Trust Property.

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

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

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

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

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

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

     (c) As to any Eligible Substitute Mortgage Loan, the Sponsor shall, if
required to deliver any such Eligible Substitute Mortgage Loan, deliver to the
Indenture Trustee with respect to such Eligible Substitute Mortgage Loan such
documents and agreements as are required to be held by the Indenture Trustee in
accordance with Section 2.01. For any Collection Period during which the Sponsor
substitutes one or more Eligible Substitute Mortgage Loans, the Servicer shall
determine the Substitution Amount which amount shall be deposited by the Sponsor
in the Collection Account at the time of substitution. All amounts received in
respect of the Eligible Substitute Mortgage Loan during the Collection Period in

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which the circumstances giving rise to such substitution occur shall not be a
part of the Trust and shall not be deposited by the Servicer in the Collection
Account. All amounts received by the Servicer during the Collection Period in
which the circumstances giving rise to such substitution occur in respect of any
Defective Mortgage Loan so removed by the Trust shall be deposited by the
Servicer in the Collection Account. Upon such substitution, the Eligible
Substitute Mortgage Loan shall be subject to the terms of this Agreement in all
respects, and the Sponsor shall be deemed (i) to have made with respect to such
Eligible Substitute Mortgage Loan as of the date of substitution, the covenants,
representations and warranties set forth in Section 2.05 and (ii) to have
certified that such Mortgage Loan is an Eligible Substitute Mortgage Loan. The
procedures applied by the Sponsor in selecting each Eligible Substitute Mortgage
Loan shall not be materially adverse to the interests of the Indenture Trustee,
the Noteholders or the Insurer.

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

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

     (a) The Servicer represents and warrants to the Indenture Trustee and the
Insurer that as of (i) the Closing Date and (ii) each date on which any Mortgage
Loans are transferred from the Sponsor to the Issuer pursuant to Article II
hereof:

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

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

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

                                       8
<PAGE>

     license, approval or authorization, or registration or declaration, as
     shall have been obtained or filed, as the case may be, prior to the Closing
     Date;

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

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

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

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

     (b) The Sponsor represents and warrants to the Indenture Trustee and the
Insurer that as of (i) the Closing Date and (ii) each date on which any Mortgage
Loans are transferred from the Sponsor to the Issuer pursuant to Article II
hereof:

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

                                       9
<PAGE>

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

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

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

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

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

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

                                       10
<PAGE>

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

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

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

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

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

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

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

                                       11
<PAGE>

     related Mortgage is a valid and subsisting first or second lien, as set
     forth on the Mortgage Loan Schedule with respect to each related Mortgaged
     Property, and as of the applicable Cut-Off Date the related Mortgaged
     Property is free and clear of all encumbrances and liens having priority
     over the first or second lien, as applicable, of such Mortgage except for
     liens for (i) real estate taxes and special assessments not yet delinquent;
     (ii) any first mortgage loan secured by such Mortgaged Property and
     specified on the Mortgage Loan Schedule; (iii) covenants, conditions and
     restrictions, rights of way, easements and other matters of public record
     as of the date of recording that are acceptable to mortgage lending
     institutions generally or specifically reflected in the appraisals; and
     (iv) other matters to which like properties are commonly subject which do
     not materially interfere with the benefits of the security intended to be
     provided by such Mortgage;

          (vi)    As of the Closing Date with respect to the Mortgage Loans and
     the applicable Transfer Date with respect to any Eligible Substitute
     Mortgage Loans, there is no valid right of rescission offset, defense
     (including the defense of usury) or counterclaim of any obligor under any
     Loan Agreement or Mortgage;

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

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

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

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

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

                                       12
<PAGE>

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

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

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

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

          (xvi)   As of the Cut-Off Date for the Mortgage Loans no more than (a)
     0.50% of the Pool I Mortgage Loans (by Pool I Balance), (b) 0.63% of the
     Pool II Mortgage Loans (by Pool II Balance) or (c) 2.94% of the Pool III
     Mortgage Loans (by Pool III Balance) are secured by Mortgaged Properties
     located in one United States postal zip code;

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

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

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

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

                                       13
<PAGE>

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

          (xxii)  The Minimum Monthly Payment with respect to any Mortgage Loan
     is not less than the interest accrued at the applicable Loan Rate on the
     average daily Principal Balance during the interest period relating to the
     date on which such Minimum Monthly Payment is due;

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

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

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

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

          (xxvii) The weighted average remaining term to maturity of the Pool I
     Mortgage Loans on a contractual basis as of the related Cut-Off Date is
     approximately 197 months. The weighted average remaining term to maturity
     of the Pool II Mortgage Loans on a contractual basis as of the related
     Cut-Off Date is approximately 199 months. The weighted average remaining
     term to maturity of the Pool III Mortgage Loans on a contractual basis as
     of the related Cut-Off Date is approximately 195 months. On each date that
     the Loan Rates relating to HELOC Mortgage Loans have been adjusted,
     interest rate adjustments on the HELOC Mortgage Loans were made in
     compliance with the related Mortgages and Credit Line Agreement and
     applicable law. Over the term of each HELOC Mortgage Loan, the Loan Rate
     may not exceed the related Loan Rate Cap, if any. With respect to the Pool
     I HELOC Mortgage Loans, the weighted average Loan Rate Cap is approximately
     18.00%. With respect to the Pool II HELOC Mortgage Loans, the weighted
     average Loan Rate Cap is approximately 18.00%. With respect to the Pool III
     HELOC Mortgage Loans, the weighted average Loan Rate Cap is approximately
     18.00%. With respect to the Pool I HELOC Mortgage Loans, the margins range
     between

                                       14
<PAGE>

     0.00% and 7.125% and the weighted average margin is approximately 2.969% as
     of the related Cut-Off Date. With respect to the Pool II HELOC Mortgage
     Loans, the margins range between 0.00% and 9.00% and the weighted average
     margin is approximately 2.88% as of the related Cut-Off Date. With respect
     to the Pool III HELOC Mortgage Loans, the margins range between 0.00% and
     6.00% and the weighted average margin is approximately 3.117% as of the
     related Cut-Off Date. The Loan Rates on the Pool I Mortgage Loans range
     between 5.875% and 16.625%, the Loan Rates on the Pool II Mortgage Loans
     range between 5.875% and 15.75%, the Loan Rates on the Pool III Mortgage
     Loans range between 5.875% and 15.50% and the weighted average Loan Rate is
     approximately 9.045% for Pool I , 8.401% for Pool II and 8.028% for Pool
     III;

         (xxviii) As of the Closing Date with respect to the Mortgage Loans and
     the applicable Transfer Date with respect to any Eligible Substitute
     Mortgage Loans, each Mortgaged Property consists of a single parcel of real
     property with a one-to-four unit single family residence erected thereon,
     or an individual condominium unit, planned unit development unit or
     townhouse;

          (xxix)  No more than 33.63% (by Pool I Balance) of the Pool I Mortgage
     Loans are secured by real property improved by individual condominium
     units, planned development units or two-to-four family residences erected
     thereon, and approximately 66.37% (by Pool I Balance) of the Pool I
     Mortgage Loans are secured by real property with a one-family residence
     erected thereon. No more than 32.15% (by Pool II Balance) of the Pool II
     Mortgage Loans are secured by real property improved by individual
     condominium units, planned development units or two-to-four family
     residences erected thereon, and approximately 67.85% (by Pool II Balance)
     of the Pool II Mortgage Loans are secured by real property with a
     one-family residence erected thereon. No more than 23.37% (by Pool III
     Balance) of the Pool III Mortgage Loans are secured by real property
     improved by individual condominium units, planned development units or
     two-to-four family residences erected thereon, and approximately 76.63% (by
     Pool III Balance) of the Pool III Mortgage Loans are secured by real
     property with a one-family residence erected thereon;

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

          (xxxi)  The Credit Limits on the Pool I HELOC Mortgage Loans range
     between $3,500 and $300,000 with an average of approximately $51,067. The
     Credit Limits on the Pool II HELOC Mortgage Loans range between $6,500 and
     $250,000 with an average of approximately $56,629. The Credit Limits on the
     Pool III HELOC Mortgage Loans range between $30,000 and $650,000 with an
     average of approximately $222,037. The Principal Balances on the Pool I
     HELOC Mortgage Loans range between $0 and $259,525 with an average of
     approximately $38,111. The Principal Balances on the Pool II HELOC Mortgage
     Loans range between $0 and $212,000 with an average of approximately
     $43,655. The Principal Balances on the Pool III HELOC Mortgage Loans

                                       15
<PAGE>

     range between $0 and $638,566 with an average of approximately $164,965.
     The Principal Balances on the Pool I Closed End Mortgage Loans range
     between $198 and $125,000 with an average of approximately $36,030. The
     Principal Balances on the Pool II Closed End Mortgage Loans range between
     $9,200 and $126,300 with an average of approximately $47,050. The Principal
     Balances on the Pool III Closed End Mortgage Loans range between $21,017
     and $266,993 with an average of approximately $160,526. The average Credit
     Limit Utilization Rate (weighted by credit line) of the Pool I HELOC
     Mortgage Loans is approximately 74.63% of the Pool II HELOC Mortgage Loans
     is approximately 77.09% and of the Pool III HELOC Mortgage Loans is
     approximately 74.30%;

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

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

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

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

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

                                       16
<PAGE>

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

        (xxxviii) To the best knowledge of the Sponsor, all parties to the
     Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
     Note and the Mortgage and each Mortgage Note and Mortgage have been duly
     and properly executed by such parties; Each Mortgage and Mortgage Note is
     the legal, valid and binding obligation of the related Mortgagor and is
     enforceable by the Issuer against the Mortgagor in accordance with its
     terms, except only as such enforcement may be limited by bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     enforcement of creditors' rights generally and by law;

          (xxxix) As of the Cut-Off Date no more than 0.38% of the Principal
     Balance of the Pool I Mortgage Loans, nor more than 0.50% of the Principal
     Balance of the Pool II Mortgage Loans nor more than 0.62% of the Principal
     Balance of the Pool III Mortgage Loans represents Mortgage Loans with
     respect to which the related Mortgagor had a Credit Score of 600 or less at
     the time of origination or whose Credit Score was unavailable.

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

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

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

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

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

                                       17
<PAGE>

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

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

          (xlvii) Each Pool I Mortgage Loan is secured by a property having an
     appraised value as of origination of $2,500,000 or less, each Pool II
     Mortgage Loan is secured by a property having an appraised value as of
     origination of $3,100,000 or less and each Pool III Mortgage Loan is
     secured by a property having an appraised value as of origination of
     $8,300,000 or less;

         (xlviii) Except for events permissible under this agreement, there are
     no defaults in complying with the terms of the Mortgage, and either (1) any
     taxes, governmental assessments, insurance premiums, water, sewer and
     municipal charges or ground rents which previously became due and owing
     have been paid, or (2) an escrow of funds has been established in an amount
     sufficient to pay for every such item which remains unpaid and which has
     been assessed but is not yet due and payable. There are no defaults in
     complying with the terms of any senior mortgage on the related Mortgaged
     Property that have not been cured by anyone other than the Servicer, except
     for any payment defaults of less than 30 days. Except for payments in the
     nature of escrow payments, including without limitation, taxes and
     insurance payments, the Sponsor has not advanced funds, or induced,
     solicited or knowingly received any advance of funds by a party other than
     the Mortgagor, directly or indirectly, for the payment of any amount
     required by the Mortgage Note, except for interest accruing from the date
     of the Mortgage Note or date of disbursement of the Mortgage proceeds,
     whichever is greater, to the day which precedes by one month the Due Date
     of the first installment of principal and interest;

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

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

          (li)    With respect to the Pool I Mortgage Loans, the terms of the
     Mortgage Note and the Mortgage have not been impaired, altered or modified
     in any material respect, except by a written instrument which has been
     recorded or is in the process of

                                       18
<PAGE>

     being recorded, if necessary, to protect the interests of the Noteholders
     and which has been or will be delivered to the Indenture Trustee on behalf
     of the Trust;

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

          (liii)  With respect to the Pool I Mortgage Loans, approximately
     15.22% of the Mortgage Loans, as of the Closing Date, are fixed rate fully
     amortizing Mortgage Loans having an original term to maturity from the date
     on which the first monthly payment is due of not more than 30 years. Each
     Mortgage Note with respect to a fixed rate and balloon Mortgage Note will
     provide for a schedule of substantially level and equal Monthly Payments
     which are sufficient to amortize fully the principal balance of such
     Mortgage Loan over a period of time equal to the amortization period of
     such Mortgage Note; provided, however, that certain Mortgage Loans
     constituting approximately 6.93% of the aggregate balance of the Mortgage
     Loans as of Cut-Off Date are balloon loans that provide for final monthly
     payment substantially greater than the preceding monthly payments. All such
     balloon loans provide for monthly payment based upon a 30 year amortization
     schedule with a final balloon payment no later than the 15th year.

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

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

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

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

                                       19
<PAGE>

          (lviii) Any advances made after the date of origination of a Mortgage
     Loan but prior to the Cut-Off Date have been consolidated with the
     outstanding principal amount secured by the related Mortgage, and the
     secured principal amount, as consolidated, bears a single interest rate and
     single repayment term reflected on the Mortgage Loan Schedule. The
     consolidated principal amount does not exceed the original principal amount
     of the related Mortgage Loan;

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

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

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

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

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

          (lxiv)  Each original Mortgage was recorded and all subsequent
     assignments of the original Mortgage (other than the assignment to the
     Indenture Trustee) have been

                                       20
<PAGE>

     recorded in the appropriate jurisdictions wherein such recordation is
     necessary to perfect the lien thereof as against creditors of the Sponsor,
     or is in the process of being recorded;

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

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

          (lxvii) The Servicer for each Mortgage Loan will accurately and fully
     report its borrower credit files to all three credit repositories in a
     timely manner;

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

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

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

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

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

                  (a) low-income families (families with incomes of 80% or
                  less of area median income) living in low-income areas (a
                  census tract or block numbering area in which the median
                  income does not exceed 80 percent of the area median
                  income); or

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

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

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

                                       21
<PAGE>

          (lxxv)  To the best of Seller's knowledge, Pool I does not contain the
     first and second lien mortgage loans relating to a single Mortgaged
     Property if the aggregate original principal balance of such mortgage loans
     exceeds Fannie Mae's loan limits. To the best of Seller's knowledge, Pool I
     will not result in a violation of Fannie Mae's loan limitations;

          (lxxvi) Each Mortgage Loan was originated substantially in accordance
     with Servicer's underwriting criteria, which conform to the underwriting
     criteria set forth in the Prospectus Supplement;

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

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

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

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

          (lxxxi) With respect to each Mortgage constituting a deed of trust, a
     Indenture Trustee, duly qualified under existing law to serve as such, has
     been properly designated and currently so serves and is named in such
     Mortgage, and no fees or expenses are or will become payable by the
     Noteholders or the Trust to the Indenture Trustee under the deed of trust,
     except in connection with a Indenture Trustee's sale after default by the
     Mortgagor;

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

        (lxxxiii) Each of the Mortgaged Properties relating to the
     seventy-five Mortgage Loans included in the sample report provided to the
     Insurer for which a

                                       22
<PAGE>

     reappraisal is received by the Insurer on or before December 29, 2000,
     shall be reappraised for a value that is at least 90% of the original
     appraisal that was provided to the Insurer with respect to such Mortgaged
     Property; the Insurer shall have the discretion to waive such requirement.

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

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

     It is understood and agreed that the obligation of the Sponsor to accept a
removal of a Mortgage Loan as to which a breach has occurred and is continuing
and to make any required deposit in the Collection Account or to substitute an
Eligible Substitute Mortgage Loan, as the case may be, shall constitute the sole
remedy against the Sponsor respecting such breach available to Noteholders, the
Indenture Trustee on behalf of Noteholders and the Insurer; provided, however,
that the Sponsor shall defend and indemnify the Indenture Trustee, the Insurer
and the Noteholders against all reasonable costs and expenses, and all losses,
damages,

                                       23
<PAGE>

claims and liabilities, including reasonable fees and expenses of counsel and
the amount of any settlement entered into with the consent of the Sponsor (such
consent not to be unreasonably withheld), which may be asserted against or
incurred by any of them as a result of any third-party action arising out of any
breach of any such representation and warranty. Notwithstanding the foregoing,
with regard to any breach of the representation and warranty set forth in
Section 2.05(a)(xxxii), the Sponsor shall pay to the Trust the sum of (i) the
amount of the related Principal Balances, plus unpaid accrued interest on each
such Principal Balance at the applicable Loan Rate to the date of payment, (ii)
the amount of any loss suffered by the Noteholders or the Insurer with respect
to the affected Mortgage Loans and (iii) all amounts owing to the Insurer
pursuant to the Insurance Agreement.

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

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

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

     (b) UCC-1 Financing Statements. On the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing, on the
applicable Transfer Date with respect to any Eligible Substitute Mortgage Loans,
the Sponsor will file UCC-1 financing statements with respect to such Mortgage
Loans.

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

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

                                       24
<PAGE>

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

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

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

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

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

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

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

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

          (vi)    In connection with each such removal of Mortgage Loans
     pursuant to this Section, each Rating Agency shall have received on or
     prior to the related Removal Notice Date notice of such proposed removal of
     Mortgage Loans and, prior to the Removal Date, shall have notified the
     Indenture Trustee and the Insurer in writing that such removal of Mortgage
     Loans would not result in a reduction or withdrawal of its then current
     ratings of the Notes, without regard to the Policy; and

                                       25
<PAGE>

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

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

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

     Section 2.08. Execution and Authentication of Notes. The Indenture Trustee,
on behalf of the Trust, has caused to be executed, authenticated and delivered
to or upon the order of the Sponsor, in exchange for the Trust, concurrently
with the sale, assignment and conveyance to the Indenture Trustee of the Trust,
three classes of Notes in authorized denominations, the Class S Certificates and
the Residual Certificates, evidencing the ownership of the Trust.

     Section 2.09. Tax Treatment. It is the intention of the Sponsor and the
Residual Certificateholders that the Notes will be indebtedness of the Sponsor
for federal, state and local income and franchise tax purposes and for purposes
of any other tax imposed on or measured by income. The Sponsor, the Indenture
Trustee and each Noteholder (or Note Owner) by acceptance of its Note (or, in
the case of a Note Owner, by virtue of such Note Owner's acquisition of a
beneficial interest therein) agrees to treat the Notes (or beneficial interest
therein), for purposes of federal, state and local income or franchise taxes and
any other tax imposed on or measured by income, as indebtedness of the Sponsor
secured by the assets of the Trust and to report the transactions contemplated
by this Agreement on all applicable tax returns in a manner consistent with such
treatment. Each Noteholder agrees that it will cause any Note Owner acquiring an
interest in a Note through it to comply with this Agreement as to treatment of
the Notes as indebtedness for federal, state and local income and franchise tax
purposes and for purposes of any other tax imposed on or measured by income. The
Indenture Trustee will prepare and file all tax reports required hereunder
consistent with this Agreement except as may be required by or provided in
Section 3.15.

                                       26
<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

     SECTION 3.01. THE SERVICER.

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

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

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

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

                                       27
<PAGE>

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

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

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

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

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

     Section 3.02.   Collection of Certain Mortgage Loan Payments.

     (a) Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans, and shall, to the
extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to home equity loans in its
servicing portfolio comparable to the Mortgage Loans. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Servicer
may in its discretion (i) waive any late payment charge or any assumption fees
or other fees which may be collected in the ordinary course of servicing such
Mortgage Loans and (ii) arrange with a Mortgagor a schedule for the payment of
interest due and unpaid; provided that such arrangement is consistent with the
Servicer's policies with respect to the Mortgage Loans it owns or services;
provided, further, that notwithstanding such arrangement such Mortgage Loans
will

                                       28
<PAGE>

be included in the information regarding delinquent Mortgage Loans set forth in
the Servicing Certificate and monthly statement to Noteholders pursuant to
Section 4.01.

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

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

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

          (iii) Net Liquidation Proceeds;

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

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

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

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

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

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

                                       29
<PAGE>

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

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

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

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

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

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

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

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

     If the Servicer deposits in the Collection Account any amount not required
to be deposited therein or any amount in respect of payments by Mortgagors made
by checks subsequently returned for insufficient funds or other reason for
non-payment it may at any time withdraw such amount from the Collection Account,
and any such amounts shall not be included in the amounts to be deposited in the
Collection Account pursuant to Section 3.02(b), any provision herein to the
contrary notwithstanding.

     Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the Servicer or the related subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan

                                       30
<PAGE>

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

     Section 3.05. Assumption and Modification Agreements. In any case in which
a Mortgaged Property has been or is about to be conveyed by the Mortgagor, the
Servicer shall exercise its right to accelerate the maturity of such Mortgage
Loan consistent with the then current practice of the Servicer and without
regard to the inclusion of such Mortgage Loan in the Trust. If it elects not to
enforce its right to accelerate or if it is prevented from doing so by
applicable law, the Servicer (so long as such action conforms with the
underwriting standards generally acceptable in the industry at the time for new
origination) is authorized to take or enter into an assumption and modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Loan Agreement and, to the extent permitted by applicable law, the Mortgagor
remains liable thereon. The Servicer shall notify the Indenture Trustee that any
assumption and modification agreement has been completed by delivering to the
Indenture Trustee an Officer's Certificate signed by a Servicing Officer
certifying that such agreement is in compliance with this Section 3.05 and by
forwarding to the Indenture Trustee the original copy of such assumption and
modification agreement. Any such assumption and modification agreement shall,
for all purposes, be considered a part of the related Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. No
change in the terms of the related Loan Agreement may be made by the Servicer in
connection with any such assumption to the extent that such change would not be
permitted to be made in respect of the original Loan Agreement pursuant to the
fourth paragraph of Section 3.01(a). Any fee collected by the Servicer for
entering into any such agreement will be retained by the Servicer as additional
servicing compensation.

                                       31
<PAGE>

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

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

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

     Section 3.07. Indenture Trustee to Cooperate. On or before each Payment
Date, the Servicer will notify the Indenture Trustee of the payment in full of
the Principal Balance of any Mortgage Loan during the preceding Collection
Period, which notification shall be by a certification (which certification
shall include a statement to the effect that all amounts received in connection
with such payment which are required to be deposited in the Collection Account
pursuant to Section 3.02 have been so deposited or credited) of a Servicing
Officer. Upon any such payment in full, the Servicer is authorized to execute,
pursuant to the authorization contained in Section 3.01, if the assignments of
Mortgage have been recorded as required

                                       32
<PAGE>

hereunder, an instrument of satisfaction regarding the related Mortgage, which
instrument of satisfaction shall be recorded by the Servicer if required by
applicable law and be delivered to the Person entitled thereto. It is understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or transfer shall be reimbursed from amounts deposited in the
Collection Account. If the Indenture Trustee is holding the Mortgage Files, from
time to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, or in connection with the payment in full of the Principal Balance of any
Mortgage Loan, the Indenture Trustee shall, upon request of the Servicer and
delivery to the Indenture Trustee of a Request for Release substantially in the
form attached hereto as Exhibit C signed by a Servicing Officer, release the
related Mortgage File to the Servicer and the Indenture Trustee shall execute
such documents, in the forms provided by the Servicer, as shall be necessary to
the prosecution of any such proceedings or the taking of other servicing
actions. Such trust receipt shall obligate the Servicer to return the Mortgage
File to the Indenture Trustee when the need therefor by the Servicer no longer
exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt
of a certificate of a Servicing Officer similar to that hereinabove specified,
the trust receipt shall be released by the Indenture Trustee.

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

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

                                       33
<PAGE>

provided herein. Liquidation Expenses are reimbursable to the Servicer solely
from related Liquidation Proceeds.

     Section 3.09.   Annual Statement as to Compliance.

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

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

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

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

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

     (a) Servicer shall provide to the Indenture Trustee, the Insurer, any
Noteholders that are federally insured savings and loan associations, the Office
of Thrift Supervision, successor to the Federal Home Loan Bank Board, the FDIC
and the supervisory agents and examiners of the Office of Thrift Supervision
access to the documentation regarding the Mortgage Loans required

                                       34
<PAGE>

by applicable regulations of the Office of Thrift Supervision and the FDIC
(acting as operator of the SAIF or the BIF), such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Servicer. Nothing in this Section 3.12 shall derogate from the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of the Servicer to
provide access as provided in this Section 3.12 as a result of such obligation
shall not constitute a breach of this Section 3.12.

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

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

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

                                       35
<PAGE>

     Section 3.15. Tax Returns. In accordance with Section 2.09 hereof, the
Servicer shall prepare and file any Federal, State or local income and franchise
tax return for the Trust as well as any other applicable return and apply for a
taxpayer identification number on behalf of the Trust as provided in Article V
of the Trust Agreement, including, without limitation, forms 1099 and 1065. The
Sponsor shall treat the Mortgage Loans as its property for all Federal, State or
local tax purposes and shall report all income earned thereon (including amounts
payable as fees to the Servicer) as its income for income tax purposes. In the
event the Trust shall be required pursuant to an audit or administrative
proceeding or change in applicable regulations to file Federal, State or local
tax returns, the Servicer shall prepare and file or shall cause to be prepared
and filed any tax returns required to be filed by the Trust; the Indenture
Trustee shall promptly sign such returns and deliver such returns after
signature to the Servicer and such returns shall be filed by the Servicer. The
Indenture Trustee shall also prepare or shall cause to be prepared all tax
information required by law to be distributed to Noteholders. In no event shall
the Indenture Trustee or the Servicer be liable for any liabilities, costs or
expenses of the Trust, the Noteholders, the Residual Certificateholders or the
Note Owners arising under any tax law, including, without limitation, Federal,
state or local income and franchise or excise taxes or any other tax imposed on
or measured by income (or any interest or penalty with respect thereto or
arising from a failure to comply therewith).

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

     Section 3.17. Reporting Requirements. For each Mortgage Loan, the Servicer
will accurately and fully report its borrower credit files to each of Equifax
Credit Information Services, Inc., TransUnion, LLC and Experion Information
Solution, Inc. (or their successors) in a timely manner on a monthly basis.

                                   ARTICLE IV

                              SERVICING CERTIFICATE

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

                                       36
<PAGE>

Collection Period, Payment Date, the series number of the Notes, the date of
this Agreement, and:

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

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

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

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

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

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

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

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

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

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

     Section 4.02. Reserved.

     Section 4.03. The Indenture Trustee Remittance Report. On each
Determination Date by noon Eastern Standard time, the Indenture Trustee shall
furnish a report (the "Indenture Trustee Remittance Report") in the form
attached as Exhibit F-1 to this Agreement (together with a statement containing
the information that is required to be included in the statement to be

                                       37
<PAGE>

prepared by the Indenture Trustee pursuant to Section 4.03) to the Insurer by
electronic medium as agreed to by the Indenture Trustee and the Insurer.

     Section 4.04. Loan Data Remittance Report. On the seventh Business Day
before each Payment Date (the "Loan Data Remittance Date") by noon Eastern
Standard time, the Servicer shall furnish a report (the "Loan Data Remittance
Report") in the form attached as Exhibit F-2 to this Agreement to the Insurer
and the Indenture Trustee by electronic medium as agreed to by the Servicer, the
Indenture Trustee and the Insurer.

     Section 4.05. Reserve Fund.

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

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

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

                                   ARTICLE V

                          THE SERVICER AND THE SPONSOR

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

     Section 5.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer or the Sponsor. Any corporation into which the Servicer or the
Sponsor may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Servicer or the Sponsor shall
be a party, or any corporation succeeding to the business of the Servicer or the
Sponsor, shall be the successor of the Servicer or the Sponsor, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

     Section 5.03. Limitation on Liability of the Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the Noteholders or
Residual Certificateholders for any action taken or for refraining from the
taking of any action by the Servicer in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any breach of representations
and warranties made herein, or

                                       38
<PAGE>

against any specific liability imposed on the Servicer for a breach of its
servicing under this Agreement or against liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties of the Servicer or by reason of reckless disregard of
obligations and duties of the Servicer hereunder. The Servicer and any director
or officer or employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer and any director or
officer or employee or agent of the Servicer shall be indemnified by the Trust
and held harmless against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement or the Notes, other than any
loss, liability or expense related to any specific Mortgage Loan (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or negligence, breach of representations and warranties
made herein, or against any specific liability imposed on the Servicer for a
breach of its servicing under this Agreement or against in the performance of
duties hereunder or by reason of its reckless disregard of obligations and
duties hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to duties to
service the Mortgage Loans in accordance with this Agreement, and which in its
opinion may involve it in any expense or liability; provided, however, that the
Servicer may in its sole discretion undertake any such action which it may deem
necessary or desirable in respect of this Agreement, and the rights and duties
of the parties hereto and the interests of the Noteholders and Residual
Certificateholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall only be entitled to be
reimbursed therefor pursuant to Section 8.7(d)(xi) of the Indenture. The
Servicer's right to indemnity or reimbursement pursuant to this Section 5.03
shall survive any resignation or termination of the Servicer pursuant to Section
5.04 or 6.01 with respect to any losses, expenses, costs or liabilities arising
prior to such resignation or termination (or arising from events that occurred
prior to such resignation or termination).

     Section 5.04. Servicer Not to Resign. Subject to the provisions of Section
5.02, the Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Indenture Trustee and the
Insurer in writing and such proposed successor servicer is reasonably acceptable
to the Indenture Trustee; (b) each Rating Agency shall have delivered a letter
to the Indenture Trustee and the Insurer prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Servicer hereunder will not result in the qualification, reduction
or withdrawal of the then current rating of the Notes without regard to the
Policy; and (c) such proposed successor servicer is reasonably acceptable to the
Insurer, as evidenced by a letter from each to the Indenture Trustee; provided,
however, that no such resignation by the Servicer shall become effective until
the Indenture Trustee or successor servicer designated by the Servicer as
provided above shall have assumed the Servicer's responsibilities and
obligations hereunder or the Indenture Trustee shall have designated a successor
servicer in accordance with Section 6.02.

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<PAGE>

Any such resignation shall not relieve the Servicer of responsibility for any of
the obligations specified in Sections 6.01 and 6.02 as obligations that survive
the resignation or termination of the Servicer. Any such determination
permitting the resignation of the Servicer pursuant to clause (i) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee and the Insurer. The Servicer shall have no claim (whether by
subrogation or otherwise) or other action against any Noteholder or Residual
Certificateholder for any amounts paid by the Servicer pursuant to any provision
of this Agreement.

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

     Section 5.06. Indemnification of the Trust by the Servicer. The Servicer
shall indemnify and hold harmless the Trust, the Owner Trustee and the Indenture
Trustee from and against any loss, liability, expense, damage or injury suffered
or sustained by reason of the Servicer's activities or omissions in servicing or
administering the Mortgage Loans that are not in accordance with this Agreement,
including, but not limited to, any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
5.06 shall survive termination of this Agreement.

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

                                       40
<PAGE>

Owner Trustee or Indenture Trustee for a breach of its obligations hereunder.
The provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof.

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

                                   ARTICLE VI

                              SERVICING TERMINATION

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

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

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

                                       41
<PAGE>

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

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

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

then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Servicer, either the Indenture
Trustee, the Insurer or the Holders of Notes evidencing more than 50% of the
Outstanding Amount of the Notes, in each case with the consent of the Insurer,
by notice then given in writing to the Servicer (and to the Indenture Trustee if
given by the Insurer or the Holders of Notes) may terminate all of the rights
and obligations of the Servicer as servicer under this Agreement. Upon the
occurrence of a Servicer Termination Delinquency Rate Trigger or Servicer
Termination Loss Trigger as those terms are defined in the Insurance Agreement,
the Insurer may, in its reasonable discretion, terminate all of the rights and
obligations of the Servicer pursuant to the terms hereof. Any such notice to the
Servicer shall also be given to each Rating Agency and the Insurer. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Notes or the
Mortgage Loans or otherwise, shall pass to and be vested in the Indenture
Trustee pursuant to and under this Section 6.01; and, without limitation, the
Indenture Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of each Mortgage Loan and
related documents, or otherwise. The Servicer agrees to cooperate with the
Indenture Trustee in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the transfer to
the Indenture Trustee for the administration by it of all cash amounts that
shall at the time be held by the Servicer to be deposited by it in the
Collection Account, or that have been deposited by the Servicer in the
Collection Account or thereafter received by the Servicer with respect to the
Mortgage Loans. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with amending this Agreement to reflect such succession
as Servicer pursuant to this Section 6.01 shall be paid by the predecessor
Servicer (or if the predecessor Servicer is the Indenture Trustee, the initial
Servicer) upon presentation of reasonable documentation of such costs and
expenses.

                                       42

<PAGE>

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

     Section 6.02. Indenture Trustee to Act; Appointment of Successor.

     (a) On and after the time the Servicer receives a notice of termination
pursuant to Section 6.01 or resigns pursuant to Section 5.04, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof.
Notwithstanding the above, if the Indenture Trustee becomes the Servicer
hereunder, it shall have no responsibility or obligation (i) of repurchase or
substitution with respect to any Mortgage Loan, (ii) with respect to any
representation or warranty of the Servicer, and (iii) for any act or omission of
either a predecessor or successor Servicer other than the Indenture Trustee. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no such
notice of termination had been given. In addition, the Indenture Trustee will be
entitled to compensation with respect to its expenses in connection with
conversion of certain information, documents and record keeping, as provided in
Sections 6.7 and 6.8 of the Indenture. Notwithstanding the above, (i) if the
Indenture Trustee is unwilling to act as successor Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee may with
the consent of the Insurer (in the situation described in clause (i)) or shall
(in the situation described in clause (ii)) appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer with all
licenses and permits required to perform its obligations under this Agreement
and having a net worth of not less than $15,000,000 as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder; provided that any such
successor Servicer shall be acceptable to the Insurer, as evidenced by its prior
written consent, which consent shall not be unreasonably withheld; and provided,
further, that the appointment of any such successor Servicer will not result in
the qualification, reduction or withdrawal of the ratings assigned to the Notes
by the Rating Agencies without regard to the Policy. Pending appointment of a
successor to the Servicer hereunder, unless the Indenture Trustee is prohibited
by law from so acting, the Indenture Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Servicer would otherwise
have received pursuant to Section 3.08 (or such lesser

                                       43
<PAGE>

compensation as the Indenture Trustee and such successor shall agree). The
Indenture Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession.

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

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

                                  ARTICLE VII

                                   TERMINATION

     Section 7.01. Termination.

     (a) The respective obligations and responsibilities of the Servicer, the
Sponsor and the Indenture Trustee created hereby (other than the obligation of
the Indenture Trustee to make certain payments to Noteholders after the final
Payment Date and the obligation of the Servicer to send certain notices as
hereinafter set forth) shall terminate upon the last action required to be taken
by the Indenture Trustee on the final Payment Date pursuant to this Article VII
following the later of (A) the Payment Date following payment in full of all
amounts owing to the Insurer and (B) the earliest of (i) the transfer, under the
conditions specified in Section 7.01(b), to the Sponsor of the Noteholders'
interest in each Mortgage Loan and all property acquired in respect of any
Mortgage Loans remaining in each of Pool I, Pool II and Pool III, (ii) the day
following the Payment Date on which the distribution made to Noteholders has
reduced the Class A-1 Note Principal Balance, the Class A-2 Note Principal
Balance and the Class A-3 Note Principal Balance to zero and no other amounts
are owed to the Noteholders hereunder, and no other amounts are owed to the
Insurer pursuant to the Insurance Agreement and Section 8.7 of the Indenture,
(iii) the final payment or other liquidation of the last Mortgage Loan remaining
in the Trust (including, without limitation, the disposition of the Mortgage
Loans pursuant to Section 5.4 of the Indenture) or the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (iv) the Payment Date in January 2027; provided, however, that
in no event shall the trust created hereby continue beyond the expiration of 21
years from the date of death of the last surviving descendants of Joseph P.
Kennedy, the late

                                       44
<PAGE>

ambassador of the United States to the Court of St. James, living on the date
hereof. Upon termination in accordance with clause (a)(B)(i) of this Section
7.01, the Indenture Trustee shall execute such documents and instruments of
transfer presented by the Sponsor, in each case without recourse, representation
or warranty, and take such other actions as the Sponsor may reasonably request
to effect the transfer of the Mortgage Loans to the Sponsor.

     (b) (i) (i) The Sponsor shall have the right to effect the transfer to the
     Sponsor of each Pool I Mortgage Loan on any Payment Date on or after the
     Payment Date immediately prior to which the Class A-1 Note Principal
     Balance is less than or equal to ten percent (10%) of the Original Class
     A-1 Note Principal Balance. If the Sponsor elects to exercise its right it
     will notify the Issuer, the Servicer, the Indenture Trustee and the Insurer
     no later than thirty-five (35) days prior to the Payment Date on which the
     transfer is to take place. The Indenture Trustee will make the transfer on
     such Payment Date subject to Section 7.01(d) and provided that the
     Redemption Price for the Class A-1 Notes has been deposited with it not
     less than five (5) Business Days prior to such Payment Date.

          (ii) The Sponsor shall have the right to effect the transfer to the
     Sponsor of each Pool II Mortgage Loan on any Payment Date on or after the
     Payment Date immediately prior to which the Class A-2 Note Principal
     Balance is less than or equal to ten percent (10%) of the Original Class
     A-2 Note Principal Balance. If the Sponsor elects to exercise its right it
     will notify the Issuer, the Servicer, the Indenture Trustee and the Insurer
     no later than thirty-five (35) days prior to the Payment Date on which the
     transfer is to take place. The Indenture Trustee will make the transfer on
     such Payment Date subject to Section 7.01(d) and provided that the
     Redemption Price for the Class A-2 Notes has been deposited with it not
     less than five (5) Business Days prior to such Payment Date.

          (iii) The Sponsor shall have the right to effect the transfer to the
     Sponsor of each Pool III Mortgage Loan on any Payment Date on or after the
     Payment Date immediately prior to which the Class A-3 Note Principal
     Balance is less than or equal to ten percent (10%) of the Original Class
     A-3 Note Principal Balance. If the Sponsor elects to exercise its right it
     will notify the Issuer, the Servicer, the Indenture Trustee and the Insurer
     no later than thirty-five (35) days prior to the Payment Date on which the
     transfer is to take place. The Indenture Trustee will make the transfer on
     such Payment Date subject to Section 7.01(d) and provided that the
     Redemption Price for the Class A-3 Notes has been deposited with it not
     less than five (5) Business Days prior to such Payment Date.

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

     (d) The Sponsor shall not exercise its right to repurchase the Mortgage
Loans in a Pool pursuant to Section 7.01(b) hereof if (a) such repurchase would
result in a draw on the Policy, without the consent of the Insurer, which
consent shall not be unreasonably withheld, (b)

                                       45
<PAGE>

any reimbursement due to the Insurer would not be fully satisfied pursuant to
the repurchase, or (c) the Overcollateralization Amount for the other Pools at
such time does not at least equal the Specified Overcollateralization Amount for
each such Pool (unless the Insurer waives such requirement).

                                  ARTICLE VIII

                      ADMINISTRATIVE DUTIES OF THE SERVICER

     Section 8.01. Administrative Duties.

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

     (b) Duties with Respect to the Issuer.

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

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

                                       46
<PAGE>

     withholding tax required to be withheld by the Owner Trustee or the
     Indenture Trustee pursuant to such provision.

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

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

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

     (c) Non-Ministerial Matters. With respect to matters that in the reasonable
judgment of the Servicer are non-ministerial, the Servicer shall not take any
action pursuant to this Article VIII unless within a reasonable time before the
taking of such action, the Servicer shall have notified the Owner Trustee and
the Insurer of the proposed action and the Owner Trustee and the Insurer shall
not have withheld consent or provided an alternative direction. For the purpose
of the preceding sentence, "non-ministerial matters" shall include:

          (A) the amendment of or any supplement to the Indenture;

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

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

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

          (E) the removal of the Indenture Trustee.

     (d) Exceptions. Notwithstanding anything to the contrary in this Agreement,
except as expressly provided herein or in the other Basic Documents, the
Servicer, in its capacity hereunder, shall not be obligated to, and shall not,
(1) make any payments to the Noteholders or Residual Certificateholders under
the Basic Documents, (2) sell the Trust Property pursuant to Section 5.4 of the
Indenture, (3) take any other action that the Issuer directs the Servicer not to

                                       47
<PAGE>

take on its behalf or (4) in connection with its duties hereunder assume any
indemnification obligation of any other Person.

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

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

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

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

     Section 9.01. Amendment. This Agreement may be amended from time to time by
agreement among the Sponsor, the Servicer, and the Indenture Trustee, in each
case without notice to or the consent of any of the Noteholders or Residual
Certificateholders, but only with the consent of the Insurer (which consent
shall not be unreasonably withheld), (i) to cure any ambiguity, (ii) to correct
any defective provisions or to correct or supplement any provisions herein that
may be inconsistent with any other provisions herein, (iii) to add to the duties
of the Sponsor or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising under this Agreement or the Policy, as the case may
be, which shall not be inconsistent with the provisions of this Agreement, (v)
to add or amend any provisions of this Agreement as required by any Rating
Agency or any other nationally recognized statistical rating organization in
order to maintain or improve any rating of the Notes (it being understood that,
after obtaining the ratings in effect on the Closing Date, neither the Indenture
Trustee, the Sponsor nor the Servicer is obligated to obtain, maintain or
improve any such rating) or (vi) to comply with any requirement imposed by the
Code; provided, however, that such action shall not, as evidenced by an Opinion
of Counsel, materially and adversely affect the interests of any Noteholder or
any Residual Certificateholder, or the Insurer; and provided, further, that the
amendment shall be deemed not to adversely affect in any material respect the
interests of the Noteholders and the Residual Certificateholders and no opinion
referred to in the preceding proviso shall be required to be delivered if the
Person requesting the amendment obtains a letter from each Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Notes without regard to the Policy.

      This Agreement also may be amended from time to time by agreement among
the Servicer, the Sponsor and the Indenture Trustee, with the consent of the
Insurer and the Holders of the Notes evidencing more than 50% of the Outstanding
Amount of the Notes and the Holders of the Residual Certificates evidencing more
than 50% of the percentage interest in the Residual Certificates (which consent
of such Holders of Notes and Residual Certificates given pursuant to

                                       48
<PAGE>

this Section 9.01 or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and all future Holders of such securities
and of any security issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon the
security) for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Residual Certificateholders;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments on the Notes or distributions or
payments under the Policy which are required to be made on any Note without the
consent of the Holder of such Note or (ii) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the Holders of
all then outstanding Notes and Residual Certificates or (iii) adversely affect
in any material respect the interests of the Insurer.

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

      Prior to the execution of any such amendment, the party hereto requesting
any such amendment shall furnish written notification of the substance of such
amendment to each Rating Agency. In addition, promptly after the execution of
any such amendment made with the consent of the Noteholders, the Indenture
Trustee shall furnish written notification of the substance of such amendment to
each Noteholder and fully executed original counterparts of the instruments
effecting such amendment to the Insurer.

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

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

     Section 9.02. Recordation of Agreement. This Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Indenture Trustee, but only upon direction of Noteholders accompanied by an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Noteholders. The Noteholders requesting
such recordation shall bear all costs and expenses of

                                       49
<PAGE>

such recordation. The Indenture Trustee shall have no obligation to ascertain
whether such recordation so affects the interests of the Noteholders.

      For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

     Section 9.03. Limitation on Rights of Noteholders. No Noteholder shall have
any right to vote (except as provided in Sections 6.01, 7.01, and 9.01 herein
and Section 5.4 of the Indenture) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the Notes, be
construed so as to constitute the Noteholders from time to time as partners or
members of an association; nor shall any Noteholder 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 Noteholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Indenture Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Notes evidencing more than 50% of the Outstanding Amount of
the Notes shall have made written request upon the Indenture Trustee to
institute such action, suit or proceeding in its own name as Indenture Trustee
hereunder and shall have offered to the Indenture Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Indenture Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; it being understood
and intended, and being expressly covenanted by each Noteholder with every other
Noteholder and the Indenture Trustee, that no one or more Holders of Notes shall
have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Notes, 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 Noteholders. For the protection and
enforcement of the provisions of this Section 9.03, each and every Noteholder
and the Indenture Trustee shall be entitled to such relief as can be given
either at law or in equity.

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

     Section 9.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

     Section 9.05. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by

                                       50
<PAGE>

certified mail, return receipt requested, to (a) in the case of the Sponsor,
GreenPoint Mortgage Securities Inc., 700 Larkspur Landing Circle, Suite 250,
Larkspur, California 94939, Attention: Peter T. Paul, (b) in the case of the
Servicer, GreenPoint Mortgage Funding, Inc., 1100 Larkspur Landing Circle, Suite
101, Larkspur, California 94939, Attention: Gilbert MacQuarrie, (c) in the case
of the Indenture Trustee, at the Corporate Trust Office, (d) in the case of the
Insurer, Financial Guaranty Insurance Company, 115 Broadway, New York, New York
10006, Attention: Research and Risk Management GreenPoint Home Equity Loan
Trust--2000-3 (telecopy number (212) 312-3225), (e) in the case of Moody's,
Residential Loan Monitoring Group, 4th Floor, 99 Church Street, New York, New
York 10007, and (f) in the case of Standard & Poor's, 55 Water Street, New York,
New York 10041, or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party. Any notice
required or permitted to be mailed to a Noteholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Note
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Noteholder or Residual Certificateholder receives such notice. Any notice or
other document required to be delivered or mailed by the Indenture Trustee to
any Rating Agency shall be given on a best efforts basis and only as a matter of
courtesy and accommodation and the Indenture Trustee shall have no liability for
failure to deliver such notice or document to any Rating Agency.

     Section 9.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or the
rights of the Holders thereof.

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

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

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

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

                                       51
<PAGE>

     Section 9.11. Insurance Agreement. The Indenture Trustee is authorized and
directed to execute and deliver the Insurance Agreement and to perform the
obligations of the Indenture Trustee thereunder.

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

                                       52
<PAGE>

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

                                    GREENPOINT MORTGAGE SECURITIES INC.,
                                       as Sponsor

                                    By: /s/ Nathan Hieter
                                       ---------------------------------
                                       Name:  Nathan Hieter
                                       Title:    Vice President

                                    GREENPOINT MORTGAGE FUNDING, INC.,
                                       as Company and Servicer

                                    By: /s/ Peter Hill
                                       ---------------------------------
                                       Name:  Peter Hill
                                       Title:    Senior Vice President

                                    BANKERS TRUST COMPANY,
                                       as Indenture Trustee

                                    By: /s/ Barbara Campbell
                                       ---------------------------------------
                                       Name:  Barbara J. Campbell
                                       Title:    Assistant Secretary

                                    GREENPOINT HOME EQUITY LOAN TRUST 2000-3,
                                       as Issuer
                                       By: Wilmington Trust Company, not in
                                       its individual capacity but solely as
                                       Owner
                                       Indenture Trustee

                                    By: /s/ W. Chris Sponenberg
                                       ---------------------------------
                                       Name:  W. Chris Sponenberg
                                       Title:    Assistant Vice President

                         [Sale and Servicing Agreement]

<PAGE>

                                                                       EXHIBIT A

                             MORTGAGE LOAN SCHEDULE

                        [On file with Indenture Trustee]

                                       A-1

<PAGE>

                                                                       EXHIBIT B

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

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

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

                                       B-1

<PAGE>

                                                                     EXHIBIT C-1

                              OFFICER'S CERTIFICATE

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

TO:   Bankers Trust Company,
        as Indenture Trustee
      123 Washington Street
      New York, New York 10006
      Attention:  Corporate Trust Office

Gentlemen:

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

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

                                    GREENPOINT MORTGAGE FUNDING, INC.,
                                        as Servicer

                                    By:
                                       ---------------------------------------
                                        Name:
                                             ---------------------------------
                                        Title:
                                              --------------------------------
                                        Date:
                                             ---------------------------------
ACKNOWLEDGED BY:

BANKERS TRUST COMPANY,
  as Indenture Trustee

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

                                      C-1-1

<PAGE>

                                                                     EXHIBIT C-2

                              OFFICER'S CERTIFICATE

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

TO:   Bankers Trust Company,
        as Indenture Trustee
      123 Washington Street
      New York, New York 10006
      Attention:  Corporate Trust Office

Gentlemen:

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

                                    GREENPOINT MORTGAGE FUNDING, INC.,
                                        as Servicer

                                    By:
                                       ---------------------------------------
                                        Name:
                                             ---------------------------------
                                        Title:
                                              --------------------------------
                                        Date:
                                             ---------------------------------
ACKNOWLEDGED BY:

BANKERS TRUST COMPANY,
as Indenture Trustee

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

                                      C-2-1

<PAGE>

                                                                       EXHIBIT D

                          FORM OF CREDIT LINE AGREEMENT

                                       D-1

<PAGE>

                                                                       EXHIBIT E

                            FORM OF MORTGAGE NOTE FOR

                            CLOSED END MORTGAGE LOANS

                                       E-1

<PAGE>

                                                                     EXHIBIT F-1

                                  FORM OF CERTIFICATE:
                                 BOND SUMMARY REPORTING

<TABLE>
<CAPTION>

DETAIL RECORD FIELDS:                           File Name:  T0nnMMYY.BND

--------------------------------------------------------------------------------------
   Field Name    Fld    Format    Field                    Definition
                 Nbr              Position
--------------------------------------------------------------------------------------
<S>              <C>              <C>
Series #  (Deal  1    10 (x)      001-010  As defined by issuer or as assigned - T0nn
Identifier)
--------------------------------------------------------------------------------------
Blank                  1 (x)      011
--------------------------------------------------------------------------------------
Class #          2     2 (x)      012-013  As assigned or determined by issuer.
                                           Input default value if not applicable.
--------------------------------------------------------------------------------------
Blank                  5 (x)      014-018
--------------------------------------------------------------------------------------
CUSIP #          3     9 (x)      019-027  If not available, Input default value.
--------------------------------------------------------------------------------------
Blank                  1 (x)      028
--------------------------------------------------------------------------------------
Coupon -         4     6.3        029-034  Bond Coupon Rate
Current
Pass-through
Rate
--------------------------------------------------------------------------------------
Blank                  1 (x)      035
--------------------------------------------------------------------------------------
Original Face    5    13.2        036-048  Par Value, original issue amount, of Class
Value
--------------------------------------------------------------------------------------
Blank                  1 (x)      049
--------------------------------------------------------------------------------------
Beginning        6    13.2        050-062  Beginning Class UPB as of beginning of
Unpaid                                     cycle
Principal
Balance
--------------------------------------------------------------------------------------
Blank                  1 (x)      063
--------------------------------------------------------------------------------------
Principal        7    13.2        064-076  Dollar amount of class principal payment
payment amount
--------------------------------------------------------------------------------------
Blank                  1 (x)      077
--------------------------------------------------------------------------------------
Interest         8    13.2        078-090  Dollar amount of class interest payment
payment amount
--------------------------------------------------------------------------------------
Blank                  1 (x)      091
--------------------------------------------------------------------------------------
Total            9    13.2        092-104  Dollar amount of principal & interest
Distribution                               payment
--------------------------------------------------------------------------------------
Blank                   1 (x)     105
--------------------------------------------------------------------------------------
Deferred         10   13.2        106-118  Dollar amount of overcollateralization
Interest                                   (Difference between security principal
                                           and mortgage principal balances applied
                                           this period.  This can include non-cash
                                           allocations)
--------------------------------------------------------------------------------------
Blank                  1 (x)      119
--------------------------------------------------------------------------------------
Principal Loss   11   13.2        120-132  Dollar amount of principal losses applied
                                           this period
--------------------------------------------------------------------------------------
Blank                  1 (x)      133
--------------------------------------------------------------------------------------
Interest Loss    12   13.2        134-146  Dollar amount of interest losses applied
                                           this period
--------------------------------------------------------------------------------------
Blank                  1 (x)      147
--------------------------------------------------------------------------------------
Ending Unpaid    13   13.2        148-160  Ending Class UPB as of beginning of cycle
Principal
Balance
--------------------------------------------------------------------------------------
Blank                  1 (x)      161
--------------------------------------------------------------------------------------
Principal        14    9.7        162-170  Factor representing the principal payment
Distribution                               divided by the Original UPB of the
Factor                                     class.
--------------------------------------------------------------------------------------
Blank                  1 (x)      171
--------------------------------------------------------------------------------------
Interest         15    9.7        172-180  Factor representing the interest payment
Distribution                               divided by the Original UPB of the class.
Factor
--------------------------------------------------------------------------------------
</TABLE>

                                     F-1-1
<PAGE>

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

                                     F-1-2
<PAGE>

                                                                     EXHIBIT F-2

                                  FORM OF CERTIFICATE:
                                  LOAN LEVEL REPORTING

<TABLE>
<CAPTION>
DETAIL RECORD FIELDS:                           File Name:  T0##MMYY.LNS

---------------------------------------------------------------------------------------
      Data:      Field   Format     Definition
T0nnMMYY.LNS     Nbr
<S>              <C>                <C>
---------------------------------------------------------------------------------------
Servicer Loan No. 1     13(X)       Unique loan number assigned to the mortgage by
                                    the Seller/Servicer
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Due Date of Last  2     YYYYMMDD    Due Date of last full payment received from the
Paid                                borrower.
Installment
(DDLPI)
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Last Payment      3     YYYYMMDD    Receipt Date of the last fully paid monthly
Received Date                       installment of principal, interest, and escrow
(LPRD)                             (if any) that was received from the borrower.
                                    Note: Dates of partial payments should not
                                    be entered here. {Data is when payment was
                                    actually received from the borrower) If this
                                    information is not available, then populate
                                    the field with the default value of
                                    19000101.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Unpaid Principal  4     13.2        Unpaid Principal balance as of the end of the
Balance (UPB)                       current period
100%
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Interest Paid     5     13.2        Gross / Coupon Interest payment amount
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Principal Paid    6     13.2        Total principal paid down on the mortgage
                                    balance.

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

                                     F-2-1

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
      Data:      Field   Format     Definition
T0nnMMYY.LNS     Nbr
<S>              <C>                <C>
---------------------------------------------------------------------------------------
Exception Code    8     2(x)        This field should contain an
                                    exception code only when exception activity
                                    occurs for that period, otherwise this field
                                    should contain a 0.
                                    DEFAULT VALUE IS 0.
                                    40 Inactivate loan, deemed the loan
                                    non-recoverable
                                    60 Payoff - mortgage matured
                                    61 Payoff - mortgage prepaid
                                    65 Payoff - mortgage repurchased
                                    69 Payoff - mortgage liquidated
                                    70 Transfer to REO (status change exception)
                                    72 Foreclosure (change of status from Active
                                         to Foreclosure)
                                    80 Substituted Loan - Loan is added as a
                                         substitute for another loan
                                    81  Reinstated Loan - Loan was previously
                                         delinquent, but the borrower has
                                         brought it current.
                                    90  Loan Modified - This is an exceptional
                                         activity code which is reserved for
                                         future use. Modifications typically
                                         require repurchase from the trust
                                         prior to modifying the loan.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Exception                           Date 9 YYYYMMDD Date the exception occurred.
                                    If an exception has not occurred, this field
                                    should contain the default value of
                                    19000101.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Mortgage Note     10    6.3         Rate associated with the borrower's scheduled
Rate                                payment
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Mortgage P&I      11    13.2        Principal and interest portion of the borrowers
Amount                              minimum installment.  Note:  100% of the
                                    principal and interest amount should be
                                    entered in this field, including servicing
                                    and guarantee fees.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Realized Losses   12    13.2        Amount of realized losses for that period.  This
                                    field will also include any supplemental claims
                                    or proceeds for loans liquidated in a previous
                                    cycle.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Cumulative        13    13.2        Total principal payments advanced by the Servicer
Principal                           and not repaid by the borrower.
Advances                            NOT APPLICABLE--DO NOT REPORT
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Interest          14    13.2        Amount of interest payment advanced by the
Advances                            Servicer for that period.
                                    NOT APPLICABLE--DO NOT REPORT
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Loan Status       15    1(X)        Pertains to activity in the prior reporting cycle.
                                    0 - Active
                                    4 - Foreclosure
                                    5 - REO
                                    6 - Closed  (PAYOFFS & REPURCHASES)
                                    9 - Bankruptcy (OVERRIDES Active Status)
                                    Note: 30,60 & 90 day delinquency status will be
                                    derived from the DDLPI field.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Subservicer No.   16     6          Subservicer ID# - 6 digits
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Actual Loan       17    13.2        Actual loan balance outstanding from the borrower.
Balance
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
</TABLE>

                                     F-2-2

<PAGE>

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------
      Data:      Field   Format     Definition
T0nnMMYY.LNS     Nbr
<S>              <C>                <C>
---------------------------------------------------------------------------------------
Next Interest     18    YYYYMMDD    Applies only to ARM loans and reflects the next
Rate Change Date                    pending interest rate adjustment date. Default is
                                    19000101. Since loans adjust monthly, only
                                    report the first adjustment date for loans
                                    with teaser period.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Next Interest     19    YYYYMMDD    Applies only to payment capped ARM loans and
Payment Change                      reflects the next pending payment adjustment
Date                                date. Default is 19000101.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Index Value at    20    6.3         The index rate used in determining the ARM coupon.
Reset Date                          Default value is 0 for an ARM loan if the index
                                    is not changing in the current period.  Also
                                    populate 0 if the loan is a fixed rate loan.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Next Mortgage     21    6.3         Should be populated in advance of the rate
Rate expected at                    adjustment Default value is 0 for an ARM loan
reset date                          if the rate is not changing.  Default value is 0
                                    if the loan is a fixed rate loan.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Collateral Group  22    2           This is a collateral grouping number for whole
No. #                               loan directed collateral deals. Default value is
                                    0.  Report the HELOCs and Fixed Rates separately.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Current           23    13.2        The current amount of cashflow applied to the
Arrearage Paid                      arrearage balance.  Applies to loans that have
                                    been or are currently in default. Default value
                                    is 0.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Outstanding       24    13.2        The total amount of outstanding interest accrued
Arrearage Balance                   under forbearance period, after current arrearage
                                    payment. Default value is 0.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Loan Number       25    13(X)       Loan number assigned to the mortgage by ___.
                                    Used for disclosure.
---------------------------------------------------------------------------------------
Blank                   1(x)
---------------------------------------------------------------------------------------
Prepayment        26    13.2        The borrowers penalty payment for prepaying his
Premium Amount                      mortgage.  This amount is allocated  in aggregate
                                    as a directed collateral amount to a specific
                                    bond.  Default value is 0.
---------------------------------------------------------------------------------------
</TABLE>

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

                                F-2-3<PAGE>

                                                              EXECUTION COPY

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

                                 TRUST AGREEMENT

                                     between

                       GREENPOINT MORTGAGE SECURITIES INC.
                                     Sponsor

                                       and

                            WILMINGTON TRUST COMPANY
                                  Owner Trustee

                          Dated as of December 1, 2000

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

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

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

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

     SECTION 2.1.   Name                                                                                          3
     SECTION 2.2.   Office                                                                                        3
     SECTION 2.3.   Purposes and Powers...........................................................................3
     SECTION 1.4.   Appointment of Owner Trustee..................................................................4
     SECTION 2.5.   Initial Capital Contribution of Trust Estate..................................................4
     SECTION 2.6.   Declaration of Trust..........................................................................4
     SECTION 2.7.   Liability.....................................................................................5
     SECTION 2.8.   Title to Trust Property.......................................................................5
     SECTION 2.9.   Situs of Trust................................................................................5
     SECTION 2.10.  Representations and Warranties of the Sponsor.................................................5
     SECTION 2.11.  Federal Income Tax Allocations................................................................6
     SECTION 2.12.  Covenants of the Sponsor......................................................................7
     SECTION 2.13.  Covenants of the Residual Certificateholders..................................................8

ARTICLE III [Reserved]............................................................................................9

ARTICLE IV Ownership of Trust Property; Residual Certificates and Transfer of Interests...........................9

     SECTION 4.1.   Trust Property Ownership......................................................................9
     SECTION 4.2.   The Residual Certificates and Class S Certificates............................................9
     SECTION 4.3.   Authentication of Residual Certificates and Class S Certificates.............................10
     SECTION 4.4.   Registration of Transfer and Exchange of Residual Certificates and Class S
                           Certificates..........................................................................10
     SECTION 4.5.   Mutilated, Destroyed, Lost or Stolen Residual Certificates or Class S Certificates...........10
     SECTION 4.6.   Persons Deemed Residual Certificateholders and Class S Certificateholders....................11
     SECTION 4.7.   Access to List of Residual Certificateholders' and Class S Certificateholders' Names
                           and Addresses.........................................................................11
     SECTION 4.8.   Maintenance of Office or Agency..............................................................12
     SECTION 4.9.   ERISA Restrictions...........................................................................12
     SECTION 4.10.  Restrictions on Transfer of Residual Certificates and Class S Certificates...................12
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                              <C>
     SECTION 4.11.  Acceptance of Obligations....................................................................14
     SECTION 4.12.  Distributions on Class S Certificates and Residual Certificates..............................14

ARTICLE V Voting Rights and Other Actions........................................................................14

     SECTION 5.1.   Prior Notice to Holders with Respect to Certain Matters......................................14
     SECTION 5.2.   Action by Residual Certificateholders with Respect to Certain Matters........................15
     SECTION 5.3.   Action with Respect to Bankruptcy............................................................15
     SECTION 5.4.   Restrictions on Residual Certificateholders' Power...........................................15
     SECTION 5.5.   Majority Control.............................................................................16
     SECTION 5.6.   Rights of the Insurer........................................................................16

ARTICLE VI Certain Duties........................................................................................16

     SECTION 6.1.   Accounting and Records to the Noteholders, Class S Certificateholders, Residual
                           Certificateholders, the Internal Revenue Service and Others...........................16
     SECTION 6.2.   Signature on Returns; Tax Matters Partner....................................................17
     SECTION 6.3.   Underwriting Agreement.......................................................................17

ARTICLE VII Authority and Duties of Owner Trustee................................................................17

     SECTION 7.1.   General Authority............................................................................17
     SECTION 7.2.   General Duties...............................................................................18
     SECTION 7.3.   Action upon Instruction......................................................................18
     SECTION 7.4.   No Duties Except as Specified in this Agreement or in Instructions...........................19
     SECTION 7.5.   No Action Except under Specified Documents or Instructions...................................19
     SECTION 7.6.   Restrictions.................................................................................19

ARTICLE VIII Concerning the Owner Trustee........................................................................20

     SECTION 8.1.   Acceptance of Trust and Duties...............................................................20
     SECTION 8.2.   Furnishing of Documents......................................................................21
     SECTION 8.3.   Representations and Warranties...............................................................21
     SECTION 8.4.   Reliance; Advice of Counsel..................................................................21
     SECTION 8.5.   Not Acting in Individual Capacity............................................................22
     SECTION 8.6.   Owner Trustee Not Liable for Notes, Residual Certificates, Class S Certificates or
                           Mortgage Loans........................................................................22
     SECTION 8.7.   Owner Trustee May Own Notes, Residual Certificates and Class S Certificates..................23
     SECTION 8.8.   Payments from Owner Trust Estate.............................................................23
     SECTION 8.9.   Doing Business in Other Jurisdictions........................................................23

ARTICLE IX Compensation of Owner Trustee.........................................................................23

     SECTION 9.1.   Owner Trustee's Fees and Expenses............................................................23
     SECTION 9.2.   Indemnification..............................................................................23
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                              <C>
     SECTION 9.3.   Payments to the Owner Trustee................................................................24
     SECTION 9.4.   Non-recourse Obligations.....................................................................24

ARTICLE X Termination of Trust Agreement.........................................................................24

     SECTION 10.1.  Termination of Trust Agreement...............................................................24

ARTICLE XI Successor Owner Trustees and Additional Owner Trustees................................................26

     SECTION 11.1.  Eligibility Requirements for Owner Trustee...................................................26
     SECTION 11.2.  Resignation or Removal of Owner Trustee......................................................26
     SECTION 11.3.  Successor Owner Trustee......................................................................27
     SECTION 11.4.  Merger or Consolidation of Owner Trustee.....................................................27
     SECTION 11.5.  Appointment of Co-Owner Trustee or Separate Owner Trustee....................................28

ARTICLE XII Miscellaneous........................................................................................29

     SECTION 12.1.  Supplements and Amendments...................................................................29
     SECTION 1.2.   No Legal Title to Owner Trust Estate in Residual Certificateholders..........................30
     SECTION 12.3.  Limitations on Rights of Others..............................................................30
     SECTION 12.4.  Notices......................................................................................30
     SECTION 12.5.  Severability.................................................................................31
     SECTION 12.6.  Separate Counterparts........................................................................31
     SECTION 12.7.  Assignments; Insurer.........................................................................31
     SECTION 12.8.  No Petition..................................................................................32
     SECTION 12.9.  No Recourse..................................................................................32
     SECTION 12.10. Headings.....................................................................................32
     SECTION 12.11. GOVERNING LAW................................................................................32
     SECTION 12.12. Servicer.....................................................................................32
</TABLE>

EXHIBITS

Exhibit A.........Form of Class S Certificate
Exhibit B.........Form of Residual Certificate
Exhibit C.........Form of Certificate of Trust

                                      iii

<PAGE>

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

                                   ARTICLE I

                                  Definitions

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

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

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

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

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

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

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

         "Class S Certificate" shall mean an interest only certificate issued
by the Trust, substantially in the form of Exhibit A attached hereto.

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

         SECTION 1.2. Other Definitional Provisions.

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

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

         (c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular

                                      2
<PAGE>

provision of this Agreement; Section and Exhibit references contained in this
Agreement are references to Sections and Exhibits in or to this Agreement
unless otherwise specified; and the term "including" shall mean "including
without limitation."

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

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

                                  ARTICLE II

                                 Organization

         SECTION 2.1. Name. There is hereby formed a trust to be known as
"GreenPoint Home Equity Loan Trust 2000-3", in which name the Owner Trustee
may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.

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

         SECTION 2.3. Purposes and Powers.

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

          (i) to issue the Notes pursuant to the Indenture and the Residual
     Certificates and Class S Certificates pursuant to this Agreement, and to
     sell the Notes, Residual Certificates and Class S Certificates;

          (ii) to assign, grant, transfer, pledge, mortgage and convey the
     Owner Trust Estate to the Indenture Trustee on behalf of the Noteholders
     and for the benefit of the Insurer and to hold, manage and distribute to
     the Residual Certificateholders pursuant to

                                      3
<PAGE>

     the terms of the Sale and Servicing Agreement any portion of the Owner
     Trust Estate released from the Lien of, and remitted to the Trust
     pursuant to, the Indenture;

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

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

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

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

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

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

         SECTION 2.5. Initial Capital Contribution of Trust Estate. The
Sponsor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Sponsor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Collection Account. On or prior to the Closing
Date, the Owner Trustee will also, upon receipt thereof, acknowledge on behalf
of the Trust receipt of the Mortgage Loans pursuant to the Sale and Servicing
Agreement. The Sponsor shall pay organizational expenses of the Trust as they
may arise or shall, upon the request of the Owner Trustee, promptly reimburse
the Owner Trustee for any such expenses paid by the Owner Trustee.

         SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Residual
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute
a business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income tax purposes, the
Trust shall be treated as a branch; provided, however, that in the event
Residual Certificates are owned by more than one Residual Certificateholder,
it is the intention of the parties hereto that, solely for income and
franchise tax purposes, the Trust shall then be treated as a partnership and
that, unless otherwise required by appropriate tax authorities, only after
such time the Trust will file or cause to be filed annual or other necessary
returns, reports and other

                                      4
<PAGE>

forms consistent with the characterization of the Trust as a partnership for
such tax purposes. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth herein and to the extent not
inconsistent herewith, in the Business Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State.

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

         SECTION 2.8. Title to Trust Property.

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

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

         SECTION 2.9. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware
or the State of New York. Payments will be received by the Trust only in
Delaware or New York and payments will be made by the Trust only from Delaware
or New York. The Trust shall not have any employees in any state other than
Delaware; provided, however, that nothing herein shall restrict or prohibit
the Owner Trustee, the Servicer or any agent of the Trust from having
employees within or without the State of Delaware. The only office of the
Trust will be at the Corporate Trust Office in Delaware.

          SECTION 2.10. Representations and Warranties of the Sponsor. The
Sponsor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Notes, the Residual Certificates and the Class S Certificates and upon which
the Insurer relies in issuing the Policy.

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

         (b) It is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which the

                                      5
<PAGE>

ownership or lease of its property, the conduct of its business and the
performance of its obligations under this Agreement and the Basic Documents
requires such qualification;

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

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

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

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

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

                                      6
<PAGE>

Trust, (ii) having incurred all liabilities incurred by the Trust, and (iii)
all transactions between the Trust and the Residual Certificateholder will be
disregarded.

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

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

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

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

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

         (b) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trust or a substantial part of the property of
the Trust or cause or permit the Trust to make any assignment for the benefit
of creditors, or admit in writing the inability of the Trust to pay its

                                      7
<PAGE>

debts generally as they become due, or declare or effect a moratorium on the
debt of the Trust or take any action in furtherance of any such action;

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

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

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

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

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

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

         (d) until the completion of the events specified in Section 10.1(e),
not to, for any reason, institute proceedings for the Trust or the Sponsor to
be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee,

                                      8
<PAGE>

trustee, sequestrator (or other similar official) of the Sponsor or the Trust
or a substantial part of its property, or cause or permit the Sponsor or the
Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any action in furtherance
of any such action.

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

                                 ARTICLE III

                                  [Reserved]

                                  ARTICLE IV

 Ownership of Trust Property; Residual Certificates and Transfer of Interests

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

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

                                      9
<PAGE>

Certificate shall become a Residual Certificateholder or Class S
Certificateholder, respectively, and shall be entitled to the rights and
subject to the obligations of a Residual Certificateholder or Class S
Certificateholder, as appropriate, hereunder, upon due registration of such
Residual Certificate or Class S Certificate in such transferee's name pursuant
to Section 4.4.

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

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

         In furtherance of and not in limitation of the foregoing, each
Residual Certificateholder, by acceptance of its Residual Certificate,
specifically acknowledges that it has no right to or interest in any monies at
any time held in the Reserve Fund prior to the release of such monies pursuant
to Section 8.7(d)(xiv) of the Indenture, such monies being held in trust for
the benefit of the Noteholders and the Insurer. Notwithstanding the foregoing,
in the event that it is ever determined that the monies held in the Reserve
Fund constitute a pledge of collateral, then the provisions of the Sale and
Servicing Agreement shall be considered to constitute a security agreement and
the Sponsor and the Residual Certificateholders hereby grant to the Indenture
Trustee and the Insurer a first priority perfected security interest in such
amounts. In addition, each Residual Certificateholder, by acceptance of its
Residual Certificate, hereby appoints the Sponsor as its agent to pledge a
first priority perfected security interest in the Reserve Fund, and any
amounts held therein from time to time to the Indenture Trustee and the
Insurer and agrees to execute and deliver such instruments of conveyance,
assignment, grant, confirmation, etc., as well as any financing statements, in
each case as the Insurer shall consider reasonably necessary in order to
perfect the Indenture Trustee's security interest in the Mortgage Loans.

         SECTION 4.5. Mutilated, Destroyed, Lost or Stolen Residual
Certificates or Class S Certificates. If (a) any mutilated Residual
Certificate or Class S Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its

                                      10
<PAGE>

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

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

         SECTION 4.7. Access to List of Residual Certificateholders' and Class
S Certificateholders' Names and Addresses. The Owner Trustee shall furnish or
cause to be furnished to the Servicer, the Sponsor or the Insurer, within 15
days after receipt by the Owner Trustee of a request therefor from such Person
in writing, a list, of the names and addresses of the Residual
Certificateholders or Class S Certificateholders as of the most recent Record
Date. If three or more Holders of Residual Certificates or one or more Holders
of Residual Certificates evidencing not less than 25% by Percentage Interest
apply in writing to the Owner Trustee, and such application states that the
applicants desire to communicate with other Residual Certificateholders or
with any Class S Certificateholders with respect to their rights under this
Agreement or under the Residual Certificates or Class S Certificates and such
application is accompanied by a copy of the communication that such applicants
propose to transmit, then the Owner Trustee shall, within five Business Days
after the receipt of such application, afford such applicants access during
normal business hours to the current list of Residual Certificateholders. Each
Holder, by receiving and holding a Residual Certificate or Class S
Certificate, shall be deemed to have agreed not to hold any of the Sponsor,
the Servicer, the Owner Trustee or the Insurer or any agent thereof
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.

                                      11
<PAGE>

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

         SECTION 4.9. ERISA Restrictions. Neither the Residual Certificates
nor the Class S Certificates may be acquired by or for the account of (i) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (ii) a plan described in Section
4975(e)(1) of the Code, or (iii) any entity whose underlying assets include
plan assets by reason of a plan's investment in the entity (each, a "Benefit
Plan"). By accepting and holding its beneficial ownership interest in its
Residual Certificate or Class S Certificate, the Holder thereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.

         SECTION 4.10. Restrictions on Transfer of Residual Certificates and
Class S Certificates.

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

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

         (c) The Residual Certificate, the Class S Certificate and any
interests therein shall not be transferred except upon satisfaction of the
following conditions precedent: (i) the Person that acquires a Residual
Certificate or Class S Certificate shall (A) be organized and existing under
the laws of the United States of America or any state thereof or the District of

                                      12
<PAGE>

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

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

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

                                      13
<PAGE>

         (e) No transfer or pledge of (i) any Residual Certificate or (ii) any
portion of a transferor's interest in any Residual Certificate shall be made
to a proposed holder unless transferor simultaneously transfers to such
proposed holder (i) the Class S Certificate (ii) or an analogous portion (by
percentage) of the transferor's interest in the Class S Certificate,
respectively. No Class S Certificate may be transferred to any proposed holder
except in connection with the transfer of a Residual Certificate made in
accordance with the terms of the preceding sentence.

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

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

                                  ARTICLE V

                        Voting Rights and Other Actions

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

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

         (b) the amendment of the Indenture by a supplemental Indenture in
circumstances where the consent of any Noteholder is required;

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

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

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

                                      14
<PAGE>

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

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

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

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

         SECTION 5.4. Restrictions on Residual Certificateholders' Power.

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

         (b) Neither the Insurer nor any Residual Certificateholder (other
than the Sponsor as sole Residual Certificateholder) shall have any right by
virtue or by availing itself of any provisions of this Agreement to institute
any suit, action, or proceeding in equity or at law upon or under or with
respect to this Agreement or any Basic Document, unless such party is the
Instructing Party pursuant to Section 7.3 and unless such party previously
shall have given to the Owner Trustee a written notice of default and of the
continuance thereof, as provided in this Agreement, and also unless Residual
Certificateholders evidencing not less than 25% by

                                      15
<PAGE>

Percentage Interest or the Insurer shall have made written request upon the
Owner Trustee to institute such action, suit or proceeding in its own name as
Owner Trustee under this Agreement and shall have offered to the Owner Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Owner Trustee, for 30
days after its receipt of such notice, request, and offer of indemnity, shall
have neglected or refused to institute any such action, suit, or proceeding,
and during such 30-day period no request or waiver inconsistent with such
written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 7.3; it being understood and intended,
and being expressly covenanted by each Residual Certificateholder with every
other Residual Certificateholder, the Owner Trustee or the Insurer, that no
Insurer or one or more Holders of Residual Certificates shall have any right
in any manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb, or prejudice the rights of
the Holders of any other of the Residual Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Agreement, except in the manner provided in this Agreement
and for the equal, ratable, and common benefit of all Residual
Certificateholders and the Insurer. For the protection and enforcement of the
provisions of this Section 5.4, each and every Residual Certificateholder, the
Owner Trustee and the Insurer shall be entitled to such relief as can be given
either at law or in equity.

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

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

                                  ARTICLE VI

                                Certain Duties

         SECTION 6.1. Accounting and Records to the Noteholders, Class S
Certificateholders, Residual Certificateholders, the Internal Revenue Service
and Others. Subject to Sections 8.01(b)(iii) and 8.01(c) of the Sale and
Servicing Agreement, the Sponsor shall (a) maintain (or cause to be
maintained) the books of the Trust on a calendar year basis on the accrual
method of accounting, including, without limitation, the allocations of net
income

                                      16
<PAGE>

under Section 2.11 hereof, (b) deliver (or cause to be delivered) to each
Class S Certificateholder and each Residual Certificateholder, as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1, if applicable) to enable each Class S
Certificateholder and each Residual Certificateholder to prepare its Federal
and state income tax returns, (c) file or cause to be filed, if necessary,
such tax returns relating to the Trust (including a partnership information
return, Form 1065), and direct the Owner Trustee or the Servicer, as the case
may be, to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
branch, or if applicable, as a partnership, for Federal income tax purposes
and (d) collect or cause to be collected any withholding tax as described in
and in accordance with Section 8.01(b)(ii) of the Sale and Servicing Agreement
with respect to income or distributions to Class S Certificateholders and
Residual Certificateholders and the appropriate forms relating thereto. The
Owner Trustee or the Servicer, as the case may be, shall make all elections
pursuant to this Section as directed in writing by the Sponsor. The Owner
Trustee shall sign all tax information returns, if any, filed pursuant to this
Section 6.1 and any other returns as may be required by law, and in doing so
shall rely entirely upon, and shall have no liability for information provided
by, or calculations provided by, the Sponsor or the Servicer. The Sponsor will
direct the Owner Trustee and the Owner Trustee shall elect under Section 1278
of the Code to include in income currently any market discount that accrues
with respect to the Mortgage Loans. The Sponsor shall not direct the Owner
Trustee to make, and the Owner Trustee shall not make, the election provided
under Section 754 of the Code.

         SECTION 6.2. Signature on Returns; Tax Matters Partner.

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

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

         SECTION 6.3. Underwriting Agreement. The Servicer is hereby
authorized to execute and deliver the Underwriting Agreement with respect to
the Notes.

                                 ARTICLE VII

                     Authority and Duties of Owner Trustee

         SECTION 7.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is
named as a party and each certificate or other document attached as an exhibit
to or contemplated by the Basic Documents to which the Trust is named as a
party and any amendment thereto, in each case, in such form as the Sponsor
shall approve as evidenced conclusively by the Owner Trustee's execution
thereof, and on behalf of the Trust, to direct the Indenture Trustee to
authenticate and deliver Class A-1 Notes in the aggregate principal amount of
$102,736,000, Class A-2 Notes in the aggregate principal amount of $98,584,000
and Class A-3 Notes in the aggregate principal

                                      17
<PAGE>

amount of $97,966,000. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further authorized
from time to time to take such action as the Instructing Party recommends with
respect to the Basic Documents so long as such activities are consistent with
the terms of the Basic Documents. The Owner Trustee may rely on the Manager to
carry out any action that the Owner Trustee is authorized or directed to
perform hereunder, to the extent permitted by the Management Agreement.

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

         SECTION 7.3. Action upon Instruction.

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

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

         (c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any instruction of the Instructing Party received, the Owner Trustee
shall not be liable on account of such action to any Person. If the Owner
Trustee shall not have received appropriate instruction within ten days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, notwithstanding any other provision of this
Agreement, take or refrain from taking

                                      18
<PAGE>

such action, not inconsistent with this Agreement or the Basic Documents, as
it shall deem to be in the best interests of the Residual Certificateholders
and shall have no liability to any Person for such action or inaction.

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

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

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

         SECTION 7.6. Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation

                                      19
<PAGE>

or a publicly traded partnership for Federal income tax purposes. The Residual
Certificateholders shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.

                                 ARTICLE VIII

                          Concerning the Owner Trustee

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

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

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

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

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

         (e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof
by the Sponsor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents, other than the certificates of
authentication on the Notes, the Residual Certificates and the Class S
Certificates, and the Owner Trustee shall in no event assume or incur any
liability, duty or obligation to the Sponsor, the Insurer, the Indenture
Trustee, any Residual Certificateholder or any Class S Certificateholder,
other than as expressly provided for herein and in the Basic Documents;

                                      20
<PAGE>

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

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

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

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

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

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

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

         SECTION 8.4. Reliance; Advice of Counsel.

         (a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
The Owner Trustee may accept a certified copy of a resolution of the

                                      21
<PAGE>

board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such body
and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein,
the Owner Trustee may for all purposes hereof rely on a certificate, signed by
the president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereon.

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

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

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

                                      22
<PAGE>

any such warranty or representation or any action of the Indenture Trustee or
the Servicer or any subservicer taken in the name of the Owner Trustee.

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

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

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

                                  ARTICLE IX

                          Compensation of Owner Trustee

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

         SECTION 9.2. Indemnification. The Sponsor shall be liable as primary
obligor for, and shall indemnify the Owner Trustee (in its individual and
trust capacities) and its officers, directors, successors, assigns, agents and
servants (collectively, the "Indemnified

                                      23
<PAGE>

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

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

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

                                  ARTICLE X

                        Termination of Trust Agreement

         SECTION 10.1. Termination of Trust Agreement.

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

                                      24
<PAGE>

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

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

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

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

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

                                      25
<PAGE>

                                  ARTICLE XI

            Successor Owner Trustees and Additional Owner Trustees

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

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

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

                                      26
<PAGE>

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

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

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

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

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

         SECTION 11.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section
11.1, without the execution or

                                      27
<PAGE>

filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, further,
that the Owner Trustee shall mail notice of such merger or consolidation to
the Rating Agencies.

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

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

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

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

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

         Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be

                                      28
<PAGE>

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

         Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                                 ARTICLE XII

                                 Miscellaneous

         SECTION 12.1. Supplements and Amendments.

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

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

                                      29
<PAGE>

amendment, without the consent of the Holders of all the outstanding Notes and
Holders of all outstanding Residual Certificates.

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

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

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

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

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

         SECTION 12.4. Notices.

         (a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon receipt
personally delivered, delivered by overnight courier or mailed first class
mail or certified mail, in each case return receipt requested, and shall be
deemed to have been duly given upon receipt, if to the Owner

                                      30
<PAGE>

Trustee, addressed to the Corporate Trust Office; if to the Sponsor, addressed
to GreenPoint Mortgage Securities Inc., 700 Larkspur Landing Circle, Suite
240, Larkspur, California 94939; if to the Insurer, addressed to Insurer,
Financial Guaranty Insurance Company, 115 Broadway, New York, New York 10006,
Attention: Research and Risk Management GreenPoint Home Equity Loan
Trust--2000-3 , Telecopy No.: (212) 312-3225; or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party.

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

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

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

         SECTION 12.7. Assignments; Insurer.

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

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

                                      31
<PAGE>

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

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

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

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

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

                                      32
<PAGE>

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

                                   WILMINGTON TRUST COMPANY,
                                      Owner Trustee

                                   By: /s/ W. Chris Sponenberg
                                      -------------------------------------
                                      Name:  W. Chris Sponenberg
                                      Title: Assistant Vice President

                                   GREENPOINT MORTGAGE SECURITIES INC.,
                                     Sponsor

                                   By: /s/ Nathan Hieter
                                       ------------------------------------
                                       Name:  Nathan Hieter
                                       Title: Vice President

Acknowledged and Agreed:

GREENPOINT MORTGAGE FUNDING, INC.,
Servicer

By: /s/ Peter Hill
   --------------------------------------------
   Name:  Peter Hill
   Title: Senior Vice President

FINANCIAL GUARANTY INSURANCE COMPANY,
Insurer

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

<PAGE>

                                                                       EXHIBIT A

                               CLASS S CERTIFICATE

THIS CLASS S CERTIFICATE REPRESENTS CERTAIN RIGHTS TO PAYMENT OF INTEREST TO THE
EXTENT DESCRIBED HEREIN AND IN THE TRUST AGREEMENT REFERRED TO HEREIN.

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

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

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

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

                                     A-1
<PAGE>

AN EXEMPTION, DESCRIBING THE APPLICABLE EXEMPTION AND THE BASIS THEREFOR, FROM
SAID ACT OR IS BEING MADE PURSUANT TO SAID ACT, WHICH OPINION OF COUNSEL SHALL
NOT BE AN EXPENSE OF THE OWNER TRUSTEE, THE INSURER OR THE SPONSOR. THE HOLDER
OF A CLASS S CERTIFICATE DESIRING TO EFFECT SUCH TRANSFER SHALL, AND DOES
HEREBY AGREE TO, INDEMNIFY THE SPONSOR AND THE INSURER AGAINST ANY LIABILITY
THAT MAY RESULT IF THE TRANSFER IS NOT SO EXEMPT OR IS NOT MADE IN ACCORDANCE
WITH SUCH FEDERAL AND STATE LAWS.

THE CLASS S CERTIFICATES AND ANY INTEREST THEREIN SHALL NOT BE TRANSFERRED
EXCEPT UPON SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT: (I) THE PERSON
THAT ACQUIRES A CLASS S CERTIFICATE SHALL (A) BE ORGANIZED AND EXISTING UNDER
THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE OR THE DISTRICT OF
COLUMBIA THEREOF, (B) EXPRESSLY ASSUME, BY AN AGREEMENT SUPPLEMENTAL HERETO,
EXECUTED AND DELIVERED TO THE OWNER TRUSTEE AND THE INSURER, THE PERFORMANCE OF
EVERY COVENANT AND OBLIGATION OF THE SPONSOR UNDER THE TRUST AGREEMENT AND (C)
AS PART OF ITS ACQUISITION OF A CLASS S CERTIFICATE, ACQUIRE ALL RIGHTS OF THE
SPONSOR OR ANY TRANSFEREE UNDER SECTION 4.10 OF THE TRUST AGREEMENT TO AMOUNTS
PAYABLE TO THE CLASS S CERTIFICATE OR SUCH TRANSFEREE UNDER SECTIONS 9.6(D)(XIV)
AND 9.5(C) OF THE INDENTURE; (II) THE HOLDER OF THE CLASS S CERTIFICATES SHALL
DELIVER TO THE OWNER TRUSTEE AND THE INSURER AN OFFICER'S CERTIFICATE STATING
THAT SUCH TRANSFER AND SUCH SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION 4.10(C)
OF THE TRUST AGREEMENT AND THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION
4.10(C) OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH AND AN OPINION OF COUNSEL
STATING THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION 4.10(C) OF THE TRUST
AGREEMENT HAVE BEEN COMPLIED WITH, AND THE OWNER TRUSTEE MAY CONCLUSIVELY RELY
ON SUCH OFFICER'S CERTIFICATE, SHALL HAVE NO DUTY TO MAKE INQUIRIES WITH REGARD
TO THE MATTERS SET FORTH THEREIN AND SHALL INCUR NO LIABILITY IN SO RELYING;
(III) THE HOLDER OF THE CLASS S CERTIFICATES SHALL DELIVER TO THE OWNER TRUSTEE
AND THE INSURER A LETTER FROM EACH RATING AGENCY CONFIRMING THAT ITS RATING OF
THE NOTES, AFTER GIVING EFFECT TO SUCH TRANSFER, WILL NOT BE REDUCED OR
WITHDRAWN WITHOUT REGARD TO THE POLICY; (IV) THE TRANSFEREE OF THE CLASS S
CERTIFICATES SHALL DELIVER TO THE OWNER TRUSTEE, AND THE INSURER AN OPINION OF
COUNSEL TO THE EFFECT THAT (A) SUCH TRANSFER WILL NOT ADVERSELY AFFECT THE
TREATMENT OF THE NOTES AFTER SUCH TRANSFER AS DEBT FOR FEDERAL AND APPLICABLE
STATE INCOME TAX PURPOSES, (B) SUCH TRANSFER WILL NOT RESULT IN THE TRUST BEING
SUBJECT TO TAX AT THE ENTITY LEVEL FOR FEDERAL OR APPLICABLE STATE TAX PURPOSES,
(C) SUCH TRANSFER WILL NOT HAVE ANY MATERIAL ADVERSE IMPACT ON THE FEDERAL OR
APPLICABLE STATE INCOME TAXATION OF A NOTEHOLDER OR ANY CLASS S
CERTIFICATEHOLDER AND (D) SUCH TRANSFER WILL NOT RESULT IN THE ARRANGEMENT
CREATED BY THE TRUST AGREEMENT OR ANY "PORTION" OF THE TRUST, BEING TREATED AS A
TAXABLE MORTGAGE POOL AS DEFINED IN SECTION 7701(I) OF THE CODE; (V) ALL FILINGS
AND OTHER ACTIONS

                                     A-2
<PAGE>

NECESSARY TO CONTINUE THE PERFECTION OF THE INTEREST OF THE TRUST IN THE
MORTGAGE LOANS AND THE OTHER PROPERTY CONVEYED UNDER THE TRUST AGREEMENT SHALL
HAVE BEEN TAKEN OR MADE AND (VI) THE INSURER SHALL HAVE CONSENTED TO SUCH
TRANSFER.

IN ADDITION, NO TRANSFER OR PLEDGE OF (I) ANY RESIDUAL CERTIFICATE OR (II) ANY
PORTION OF A TRANSFEROR'S INTEREST IN ANY RESIDUAL CERTIFICATE SHALL BE MADE TO
A PROPOSED HOLDER UNLESS TRANSFEROR SIMULTANEOUSLY TRANSFERS TO SUCH PROPOSED
HOLDER (I) THE CLASS S CERTIFICATE OR (II) AN ANALOGOUS PORTION (BY PERCENTAGE)
OF THE TRANSFEROR'S INTEREST IN THE CLASS S CERTIFICATE, RESPECTIVELY. NO CLASS
S CERTIFICATE MAY BE TRANSFERRED TO ANY PROPOSED HOLDER EXCEPT IN CONNECTION
WITH THE TRANSFER OF A RESIDUAL CERTIFICATE MADE IN ACCORDANCE WITH THE TERMS OF
THE PRECEDING SENTENCE.

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

                                     A-3
<PAGE>

         GREENPOINT HOME EQUITY LOAN TRUST 2000-3 CLASS S CERTIFICATE

Percentage Interest: 100%                       Cut-Off Date:  November 30, 2000
First Payment Date:  January 16, 2001             Issue Date:  December 18, 2000

No. 1

                       GreenPoint Mortgage Securities Inc.
                            Class S Certificateholder

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

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

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

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

         This Class S Certificate is one of the duly authorized Class S
Certificates designated as GreenPoint Home Equity Loan "Asset Backed
Certificates" (herein called the "Class S Certificates"). Also issued under
the Trust Agreement are three classes of Notes designated as Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes (collectively referred to herein as the
"Notes") and the Residual Certificate (the "Residual Certificate"). These
Class S Certificates are issued under and are subject to the terms, provisions
and conditions of the Trust Agreement, to which Trust Agreement the holder of
this Class S Certificate by virtue of the acceptance hereof assents and by
which such holder is bound. The property of the Trust includes (A) a pool of
certain adjustable rate home equity revolving credit line loans (the "HELOC
Mortgage Loans") (including any Additional Balances related thereto) and
certain second lien closed-end loans (the "Closed End Mortgage Loans") in each
case which substantially conform to the loan origination standards with
respect to loan balances as of the date of origination set forth by the
Federal National Mortgage Association, (B) a pool of certain HELOC Mortgage
Loans (including any Additional Balances related thereto) and certain Closed
End Mortgage Loans in each case which substantially conform to the loan
origination standards with respect to

                                      A-4
<PAGE>

loan balances as of the date of origination set forth by the Federal Home Loan
Mortgage Corporation, and (C) a pool of certain HELOC Mortgage Loans (including
any Additional Balances related thereto) and Certain Closed End Mortgage Loans
which may not so conform.

         Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business
Day (the "Payment Date"), commencing on January 16, 2001, to the Person in
whose name this Class S Certificate is registered at the close of business on
the Business Day preceding such Payment Date (the "Record Date") such Class S
Certificateholder's Percentage Interest in the amount to be distributed to
Class S Certificateholders on such Payment Date.

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

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

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

                                      A-5
<PAGE>

         Distributions on this Class S Certificate will be made as provided in
the Sale and Servicing Agreement and the Indenture by the Indenture Trustee by
wire transfer or check mailed to the Class S Certificateholder of record in
the Certificate Register without the presentation or surrender of this Class S
Certificate or the making of any notation hereon. Except as otherwise provided
in the Trust Agreement and notwithstanding the above, the final distribution
on this Class S Certificate will be made after due notice by the Owner Trustee
of the pendency of such distribution and only upon presentation and surrender
of this Class S Certificate at the office or agency maintained for the purpose
by the Owner Trustee in the Corporate Trust Office.

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

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

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

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

         As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Class S Certificate is registrable in
the Certificate Register upon surrender of this Class S Certificate for
registration of transfer at the offices or agencies of the

                                      A-6
<PAGE>

Certificate Registrar maintained by the Owner Trustee in the Corporate Trust
Office, accompanied by a written instrument of transfer in form satisfactory
to the Owner Trustee and the Certificate Registrar duly executed by the holder
hereof or such holder's attorney duly authorized in writing, and thereupon one
or more new Class S Certificates in authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Trust
Agreement is Wilmington Trust Company.

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

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

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

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

                  Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual or
facsimile signature, this Class S

                                     A-7

<PAGE>

Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.

                                     A-8

<PAGE>

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

                                   GREENPOINT HOME EQUITY LOAN TRUST 2000-3

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

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

Dated: December 18, 2000

                                     A-9

<PAGE>

                                                                      EXHIBIT B

                              RESIDUAL CERTIFICATE

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

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

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

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

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

                                      B-1
<PAGE>

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

THE RESIDUAL CERTIFICATES AND ANY INTEREST THEREIN SHALL NOT BE TRANSFERRED
EXCEPT UPON SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT: (I) THE PERSON
THAT ACQUIRES A RESIDUAL CERTIFICATE SHALL (A) BE ORGANIZED AND EXISTING UNDER
THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE OR THE DISTRICT OF
COLUMBIA THEREOF, (B) EXPRESSLY ASSUME, BY AN AGREEMENT SUPPLEMENTAL HERETO,
EXECUTED AND DELIVERED TO THE OWNER TRUSTEE AND THE INSURER, THE PERFORMANCE OF
EVERY COVENANT AND OBLIGATION OF THE SPONSOR UNDER THE TRUST AGREEMENT AND (C)
AS PART OF ITS ACQUISITION OF A RESIDUAL CERTIFICATE, ACQUIRE ALL RIGHTS OF THE
SPONSOR OR ANY TRANSFEREE UNDER SECTION 4.10 OF THE TRUST AGREEMENT TO AMOUNTS
PAYABLE TO THE RESIDUAL CERTIFICATE OR SUCH TRANSFEREE UNDER SECTIONS
9.6(D)(XIV) AND 9.5(C) OF THE INDENTURE; (II) THE HOLDER OF THE RESIDUAL
CERTIFICATES SHALL DELIVER TO THE OWNER TRUSTEE AND THE INSURER AN OFFICER'S
CERTIFICATE STATING THAT SUCH TRANSFER AND SUCH SUPPLEMENTAL AGREEMENT COMPLY
WITH SECTION 4.10(C) OF THE TRUST AGREEMENT AND THAT ALL CONDITIONS PRECEDENT
PROVIDED BY SECTION 4.10(C) OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH AND
AN OPINION OF COUNSEL STATING THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION
4.10(C) OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH, AND THE OWNER TRUSTEE
MAY CONCLUSIVELY RELY ON SUCH OFFICER'S CERTIFICATE, SHALL HAVE NO DUTY TO MAKE
INQUIRIES WITH REGARD TO THE MATTERS SET FORTH THEREIN AND SHALL INCUR NO
LIABILITY IN SO RELYING; (III) THE HOLDER OF THE RESIDUAL CERTIFICATES SHALL
DELIVER TO THE OWNER TRUSTEE AND THE INSURER A LETTER FROM EACH RATING AGENCY
CONFIRMING THAT ITS RATING OF THE NOTES, AFTER GIVING EFFECT TO SUCH TRANSFER,
WILL NOT BE REDUCED OR WITHDRAWN WITHOUT REGARD TO THE POLICY; (IV) THE
TRANSFEREE OF THE RESIDUAL CERTIFICATES SHALL DELIVER TO THE OWNER TRUSTEE, AND
THE INSURER AN OPINION OF COUNSEL TO THE EFFECT THAT (A) SUCH TRANSFER WILL NOT
ADVERSELY AFFECT THE TREATMENT OF THE NOTES AFTER SUCH TRANSFER AS DEBT FOR
FEDERAL AND APPLICABLE STATE INCOME TAX PURPOSES, (B) SUCH TRANSFER WILL NOT
RESULT IN THE TRUST BEING SUBJECT TO TAX AT THE ENTITY LEVEL FOR FEDERAL OR
APPLICABLE STATE TAX PURPOSES, (C) SUCH TRANSFER WILL NOT HAVE ANY MATERIAL
ADVERSE IMPACT ON THE FEDERAL OR APPLICABLE STATE INCOME TAXATION OF A
NOTEHOLDER OR ANY RESIDUAL CERTIFICATEHOLDER AND (D) SUCH TRANSFER WILL NOT
RESULT IN THE ARRANGEMENT CREATED BY THE TRUST AGREEMENT OR ANY "PORTION" OF THE
TRUST, BEING TREATED AS A TAXABLE MORTGAGE POOL AS DEFINED IN SECTION 7701(I) OF
THE CODE; (V) ALL FILINGS AND OTHER ACTIONS

                                      B-2

<PAGE>

NECESSARY TO CONTINUE THE PERFECTION OF THE INTEREST OF THE TRUST IN THE
MORTGAGE LOANS AND THE OTHER PROPERTY CONVEYED UNDER THE TRUST AGREEMENT SHALL
HAVE BEEN TAKEN OR MADE AND (VI) THE INSURER SHALL HAVE CONSENTED TO SUCH
TRANSFER.

IN ADDITION, NO TRANSFER OR PLEDGE OF (I) ANY RESIDUAL CERTIFICATE OR (II) ANY
PORTION OF A TRANSFEROR'S INTEREST IN ANY RESIDUAL CERTIFICATE SHALL BE MADE TO
A PROPOSED HOLDER UNLESS TRANSFEROR SIMULTANEOUSLY TRANSFERS TO SUCH PROPOSED
HOLDER (I) THE CLASS S CERTIFICATE OR (II) AN ANALOGOUS PORTION (BY PERCENTAGE)
OF THE TRANSFEROR'S INTEREST IN THE CLASS S CERTIFICATE, RESPECTIVELY. NO CLASS
S CERTIFICATE MAY BE TRANSFERRED TO ANY PROPOSED HOLDER EXCEPT IN CONNECTION
WITH THE TRANSFER OF A RESIDUAL CERTIFICATE MADE IN ACCORDANCE WITH THE TERMS OF
THE PRECEDING SENTENCE.

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

                                     B-3
<PAGE>

         GREENPOINT HOME EQUITY LOAN TRUST 2000-3 RESIDUAL CERTIFICATE

Percentage Interest: 100%                       Cut-Off Date:  November 30, 2000
First Payment Date:  January 16, 2001             Issue Date:  December 18, 2000

No. 1

                       GreenPoint Mortgage Securities Inc.
                           Residual Certificateholder

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

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

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

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

         This Residual Certificate is one of the duly authorized Residual
Certificates designated as GreenPoint Home Equity Loan "Asset Backed
Certificates" (herein called the "Residual Certificates"). Also issued under
the Trust Agreement are three classes of Notes designated as Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes (collectively referred to herein as the
"Notes") and the Class S Certificate (the "Class S Certificate"). These
Residual Certificates are issued under and are subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
holder of this Residual Certificate by virtue of the acceptance hereof assents
and by which such holder is bound. The property of the Trust includes (A) a
pool of certain adjustable rate home equity revolving credit line loans (the
"HELOC Mortgage Loans") (including any Additional Balances related thereto)
and certain second lien closed-end loans (the "Closed End Mortgage Loans") in
each case which substantially conform to the loan origination standards with
respect to loan balances as of the date of origination set forth by the
Federal National Mortgage Association, (B) a pool of certain HELOC Mortgage
Loans (including any Additional Balances related thereto) and certain Closed
End Mortgage Loans in each case which substantially conform to the loan
origination standards with respect to

                                     B-4

<PAGE>

loan balances as of the date of origination set forth by the Federal Home Loan
Mortgage Corporation, and (C) a pool of certain HELOC Mortgage Loans (including
any Additional Balances related thereto) and Certain Closed End Mortgage Loans
which may not so conform.

         Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business
Day (the "Payment Date"), commencing on January 16, 2001, to the Person in
whose name this Residual Certificate is registered at the close of business on
the Business Day preceding such Payment Date (the "Record Date") such Residual
Certificateholder's Percentage Interest in the amount to be distributed to
Residual Certificateholders on such Payment Date.

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

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

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

                                     B-5

<PAGE>

         Distributions on this Residual Certificate will be made as provided
in the Sale and Servicing Agreement and the Indenture by the Indenture Trustee
by wire transfer or check mailed to the Residual Certificateholder of record
in the Certificate Register without the presentation or surrender of this
Residual Certificate or the making of any notation hereon. Except as otherwise
provided in the Trust Agreement and notwithstanding the above, the final
distribution on this Residual Certificate will be made after due notice by the
Owner Trustee of the pendency of such distribution and only upon presentation
and surrender of this Residual Certificate at the office or agency maintained
for the purpose by the Owner Trustee in the Corporate Trust Office.

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

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

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

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

         As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Residual Certificate is registrable in
the Certificate Register upon surrender of this Residual Certificate for
registration of transfer at the offices or agencies of the

                                     B-6

<PAGE>

Certificate Registrar maintained by the Owner Trustee in the Corporate Trust
Office, accompanied by a written instrument of transfer in form satisfactory
to the Owner Trustee and the Certificate Registrar duly executed by the holder
hereof or such holder's attorney duly authorized in writing, and thereupon one
or more new Residual Certificates in authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Trust
Agreement is Wilmington Trust Company.

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

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

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

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

         Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Residual

                                     B-7

<PAGE>

Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.

                                     B-8

<PAGE>

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

                                   GREENPOINT HOME EQUITY LOAN TRUST 2000-3

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

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

Dated: December 18, 2000

                                     B-9

<PAGE>

                                  ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

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

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

Dated:

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

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

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

<PAGE>

                                                                      EXHIBIT C

                            CERTIFICATE OF TRUST OF
                   GREENPOINT HOME EQUITY LOAN TRUST 2000-3

         This Certificate of Trust of GreenPoint Home Equity Loan Trust 2000-3
(the "Trust"), dated as of December __, 2000, is being duly executed and filed
by Wilmington Trust Company, a Delaware banking corporation, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code, ss.
3801 et seq.).

         1. Name. The name of the business trust formed hereby is GreenPoint
Home Equity Loan Trust 2000-3.

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

         3. This Certificate of Trust will be effective December 18, 2000.

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

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

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]