Document:

Servicing Agreement

 Exhibit 4.2.1 
  

 EMC MORTGAGE CORPORATION, 
 as Servicer, 
 WELLS FARGO BANK, N.A., 
 as Master Servicer, 
 PEOPLE’S
CHOICE HOME LOAN, INC., 
 as Subservicer 
 and 
 HSBC BANK USA, NATIONAL ASSOCIATION 
 as Trustee 
 SERVICING AGREEMENT

 Dated as of July 1, 2006 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I DEFINITIONS
	  	1
			
	 Section 1.01.
	  	Defined Terms	  	1
		
	ARTICLE II SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS	  	4
			
	 Section 2.01.
	  	Servicing of Mortgage Loans	  	4
	 Section 2.02.
	  	Maintenance of Servicing Files	  	4
	 Section 2.03.
	  	Books and Records	  	4
	 Section 2.04.
	  	Delivery of Mortgage Loan Documents	  	5
		
	 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SERVICER
	  	6
			
	 Section 3.01.
	  	Representations of the Servicer	  	6
	 Section 3.02.
	  	Representations of the Subservicer	  	7
		
	 ARTICLE IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
	  	8
			
	 Section 4.01.
	  	Servicer to Act as Servicer	  	8
	 Section 4.02.
	  	Collection of Mortgage Loan Payments	  	11
	 Section 4.03.
	  	Realization Upon Defaulted Mortgage Loans	  	11
	 Section 4.04.
	  	Establishment of Custodial Accounts; Deposits in Custodial Accounts	  	12
	 Section 4.05.
	  	Permitted Withdrawals From the Custodial Account	  	13
	 Section 4.06.
	  	Establishment of Escrow Accounts; Deposits in Escrow Accounts	  	14
	 Section 4.07.
	  	Permitted Withdrawals From Escrow Account	  	15
	 Section 4.08.
	  	Payment of Taxes, Insurance and Other Charges, Collections Thereunder	  	16
	 Section 4.09.
	  	Transfer of Accounts	  	16
	 Section 4.10.
	  	Maintenance of Hazard Insurance	  	16
	 Section 4.11.
	  	Blanket Hazard Insurance	  	17
	 Section 4.12.
	  	Fidelity Bond, Errors and Omissions Insurance	  	18
	 Section 4.13.
	  	Title, Management and Disposition of REO Property	  	18
	 Section 4.14.
	  	Notification of Adjustments	  	19
	 Section 4.15.
	  	Retention of Mortgage Loans	  	20
	 Section 4.16.
	  	Compliance with Applicable Laws	  	20
	 Section 4.17.
	  	Waiver of Prepayment Charges	  	20
	 Section 4.18.
	  	Advance Facility	  	21
		
	 ARTICLE V REMITTANCES TO THE MASTER SERVICER
	  	22
			
	 Section 5.01.
	  	Remittances	  	22
	 Section 5.02.
	  	Monthly Statements	  	23
	 Section 5.03.
	  	Monthly Advances	  	23
	 Section 5.04.
	  	Liquidation Reports	  	24

  

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	 ARTICLE VI GENERAL SERVICING PROCEDURES
	  	24
			
	 Section 6.01.
	  	Assumption Agreements	  	24
	 Section 6.02.
	  	Satisfaction of Mortgages and Release of Mortgage Loan Documents	  	25
	 Section 6.03.
	  	Servicing Compensation	  	26
	 Section 6.04.
	  	Master Servicer’s Right to Examine Servicer Records	  	26
	 Section 6.05.
	  	Non-solicitation	  	26
		
	 ARTICLE VII REPORTS TO BE PREPARED BY SERVICER
	  	27
			
	 Section 7.01.
	  	Servicer Shall Provide Information as Reasonably Required	  	27
		
	 ARTICLE VIII THE SERVICER
	  	27
			
	 Section 8.01.
	  	Indemnification; Third Party Claims	  	27
	 Section 8.02.
	  	Merger or Consolidation of the Servicer	  	28
	 Section 8.03.
	  	Limitation on Liability of the Servicer and Others	  	28
	 Section 8.04.
	  	Servicer Not to Resign	  	29
	 Section 8.05.
	  	No Transfer of Servicing	  	29
		
	 ARTICLE IX DEFAULT
	  	29
			
	 Section 9.01.
	  	Events of Default	  	29
	 Section 9.02.
	  	Waiver of Defaults	  	31
		
	 ARTICLE X TERMINATION
	  	31
			
	 Section 10.01.
	  	Termination	  	31
		
	 ARTICLE XI COMPLIANCE WITH REGULATION AB
	  	32
			
	 Section 11.01.
	  	Additional Representations and Warranties of the Servicer	  	33
	 Section 11.02.
	  	Information to Be Provided by the Servicer	  	34
	 Section 11.03.
	  	Servicer Compliance Statement	  	38
	 Section 11.04.
	  	Report on Assessment of Compliance and Attestation	  	38
	 Section 11.05.
	  	Use of Subservicers and Subcontractors	  	39
	 Section 11.06.
	  	Indemnification; Remedies	  	40
	 Section 11.07.
	  	Intent of the Parties; Reasonableness	  	42
		
	 ARTICLE XII MISCELLANEOUS PROVISIONS
	  	43
			
	 Section 12.01.
	  	Successor to the Servicer	  	43
	 Section 12.02.
	  	Amendment	  	44
	 Section 12.03.
	  	Governing Law	  	44
	 Section 12.04.
	  	Notices	  	44
	 Section 12.05.
	  	Severability of Provisions	  	45
	 Section 12.06.
	  	Exhibits and Schedules	  	45
	 Section 12.07.
	  	General Interpretive Principles	  	45

  

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	 Section 12.08.
	  	Reproduction of Documents	  	46
	 Section 12.09.
	  	Confidentiality of Information	  	46
	 Section 12.10.
	  	No Partnership	  	46
	 Section 12.11.
	  	Counterparts; Successors and Assigns	  	46
	 Section 12.12.
	  	Entire Agreement	  	47
	 Section 12.13.
	  	Further Agreements	  	47

 EXHIBITS 
  

			
	Exhibit A	  	Mortgage Loan Schedule
	Exhibit B	  	Custodial Account Letter Agreement
	Exhibit C	  	Escrow Account Letter Agreement
	Exhibit D	  	Form of Request for Release by Custodian
	Exhibit E	  	Format for Reporting Realized Losses or Gains
	Exhibit F	  	Master Servicer’s Standard File Layout - Scheduled/Scheduled Reporting
	Exhibit G	  	Master Servicer’s Standard File Layout - Delinquency Reporting
	Exhibit H	  	Form of Limited Power of Attorney
	Exhibit I	  	Servicing Criteria to be Addressed in Assessment of Compliance
	Exhibit J	  	Form of Annual Certification

  

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 THIS IS A SERVICING AGREEMENT, dated as of July 1, 2006 (the “Agreement”), and is
executed among EMC Mortgage Corporation, as servicer (the “Servicer”), Wells Fargo Bank, N.A., as master servicer (the “Master Servicer”), People’s Choice Home Loan, Inc., as the subservicer pursuant to the
Subservicing Agreement (the “Subservicer”) and HSBC Bank USA, National Association, as trustee (the “Trustee”). 
 PRELIMINARY STATEMENT: 
 WHEREAS, pursuant to the pooling and servicing agreement, dated as of July 1, 2006, among
People’s Choice Home Loan Securities Corp., as depositor (the “Depositor”), the Master Servicer, Wells Fargo Bank, N.A., as the Securities Administrator, the Trustee, the Servicer, the Subservicer and People’s Choice Home
Loan, Inc., as seller (the “Pooling and Servicing Agreement”), the Issuing Entity (as defined in the Pooling and Servicing Agreement) has issued the Certificates (as defined in the Pooling and Servicing Agreement), which will
evidence an ownership interest in, among other things, trust assets consisting of the mortgage loans identified on Exhibit A attached hereto (the “Mortgage Loans”). The Issuing Entity desires to engage the Servicer to service
the Mortgage Loans, itself or through the Subservicer, for the benefit of the holders of the Certificates, and the Servicer desires to accept such engagement, subject and pursuant to the terms of this Agreement. 
 NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Section 1.01. Defined
Terms. 
 Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Pooling and
Servicing Agreement, which is incorporated herein by this reference. Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings: 
 Agreement: This Servicing Agreement including all exhibits hereto, amendments hereof and supplements hereto. 
 Ancillary Income: All income derived from the Mortgage Loans other than payments of principal, interest and Escrow Payments (excluding Servicing
Fees and Prepayment Charges attributable to the Mortgage Loans), including but not limited to interest received on funds deposited in the Custodial Account or any Escrow Account, all late charges, assumption fees, escrow account benefits (to the
extent permitted by law and in the Mortgage Loan Documents), reinstatement fees, fees received with respect to checks on bank drafts returned by the related bank for insufficient funds, and similar types of fees arising from or in connection with
any Mortgage Loan to the extent not otherwise payable to the Mortgagor under applicable law or pursuant to the terms of the related Mortgage Note. 

 Condemnation Proceeds: All awards or settlements in respect of a Mortgaged Property, whether
permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents. 
 Custodial Account: The separate demand account or accounts created and maintained pursuant to Section 4.04, which shall be entitled
“People’s Choice Home Loan Inc. f/b/o Trustee and Holders of People’s Financial Realty Mortgage Securities Trust, Series Mortgage Pass-Through Certificates, Series 2006-1” and shall be an Eligible Account. 
 Effective Date: July 1, 2006. 
 Escrow Account: The separate trust account or accounts created and maintained pursuant to Section 4.06, which shall be entitled “[Name of Servicer or Subservicer] - Escrow Account, in trust for People’s Financial
Realty Mortgage Securities Trust, Series 2006-1” and shall be an Eligible Account, it being understood that amounts on deposit in an Escrow Account shall be and remain uninvested. 
 Escrow Payments: With respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal
charges, mortgage insurance premiums, fire and hazard insurance premiums and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other related document. 
 Event of Default: Any one of the conditions or circumstances enumerated in Section 9.01. 
 Fidelity Bond: A fidelity bond to be maintained by each of the Servicer and the Subservicer pursuant to Section 4.12. 
 Full Principal Prepayment: A Principal Prepayment made by a Mortgagor of the entire principal balance of a Mortgage Loan. 
 GAAP: Generally accepted accounting principles and procedures, consistently applied. 
 HUD: The United States Department of Housing and Urban Development or any successor thereto. 
 Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual rate of interest remitted to the Master Servicer, which shall be
equal to the related Mortgage Rate minus the Subservicing Fee Rate. 
 Partial Principal Prepayment: A Principal Prepayment by a
Mortgagor in part but not in full of the outstanding principal balance of a Mortgage Loan. 
 Payment Plan: A payment plan agreed to
by the Mortgagor and the Servicer or the Subservicer, in the Servicer’s or the Subservicer’s own discretion (subject, in the case of the Subservicer, to Section 3.02 of the Pooling and Servicing Agreement), which enables a Mortgagor
to bring the related Mortgage Loan current within an amount of time deemed 

  

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reasonable by the Servicer or the Subservicer in the exercise of its prudent business judgment and in accordance with the Servicing Standard. 
 REO Disposition Proceeds: Amounts received by the Servicer or the Subservicer in connection with a related REO Disposition. 
 Servicing Advances: All customary, reasonable and necessary “out-of-pocket” costs and expenses (including reasonable attorneys’
fees and disbursements) incurred in the performance by the Servicer or the Subservicer of its servicing obligations relating to each Mortgage Loan other than a Monthly Advance, including the cost of (a) the preservation, inspection, restoration
and protection of the Mortgaged Property, (b) any enforcement, administrative or judicial proceedings, or any legal work or advice specifically related to servicing the Mortgage Loans, including foreclosures, bankruptcies, condemnations, drug
seizures, elections, foreclosures by subordinate or superior lienholders, and other legal actions incidental to the servicing of the Mortgage Loans (provided that such expenses are reasonable and that the Servicer or the Subservicer specifies
the Mortgage Loan(s) to which such expenses relate), (c) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in full or partial satisfaction of the related Mortgage (including any fees of an
independent contractor (such as a real estate broker) engaged by the Servicer or the Subservicer in connection with such activities), (d) advancing payments of taxes, assessments, water rates, sewer rates and other charges which are or may
become a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy premiums and fire and hazard and flood insurance coverage and (e) compliance with the obligations under Section 4.08 hereof. Neither the Servicer nor the
Subservicer shall have any obligation to make any Servicing Advance if the Servicer or the Subservicer, in accordance with the Servicing Standard, determines that such Servicing Advance is or would constitute a Nonrecoverable Advance; provided
that the determination by the Servicer or the Subservicer that it has made a Nonrecoverable Advance is evidenced by an Officer’s Certificate of the Servicer or the Subservicer delivered to the Master Servicer and detailing the reasons for
such determination. 
 Servicing File: The documents, records and other items pertaining to a particular Mortgage Loan, and any
additional documents relating to such Mortgage Loan as are in, or as may from time to time come into, the Servicer’s or the Subservicer’s possession. 
 Servicing Standard: The servicing and administration of the Mortgage Loans for which the Servicer and the Subservicer are responsible hereunder (a) in the same manner in which, and with the same care,
skill, prudence and diligence with which, the Servicer and the Subservicer services and administers similar mortgage loans with similar mortgagors (i) for other third-parties, giving due consideration to customary and usual standard of practice
of prudent institutional residential mortgage lenders servicing their own loans or (ii) held in the Servicer’s or the Subservicer’s own portfolio, whichever standard is higher, and, in either case, giving due consideration to
customary and usual standards or practice of mortgage lenders and loan servicers servicing and administering similar mortgage loans, (b) with a view to the maximization of the recovery on such Mortgage Loans on a net present value basis and the
best interests of the Trustee on behalf of the Certificateholders, (c) without regard to (i) any relationship that Servicer and the Subservicer or any Affiliate of either thereof may have with the related Mortgagor or any other party to
the transaction; (ii) the right of the Servicer and the Subservicer to receive compensation or other fees for its servicing rendered pursuant to this 

  

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Agreement; (iii) the obligation of the Servicer and the Subservicer to make Servicing Advances; (iv) the ownership, servicing or management by the
Servicer and the Subservicer or any Affiliate of either thereof for others of any other mortgage loans or mortgaged properties; and (v) any debt the Servicer and the Subservicer or any Affiliate of either thereof has extended to any Mortgagor
or any Affiliate of such Mortgagor and (d) in accordance with all applicable state, local and federal laws, rules and regulations. 
 ARTICLE II 
 SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS 
 AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS 
 Section 2.01. Servicing of Mortgage Loans. 
 From and after the Effective Date and pursuant to the
terms of this Agreement, the Servicer does hereby agree to service the Mortgage Loans by itself or through the Subservicer. 
 Section 2.02.
Maintenance of Servicing Files. 
 The Servicer shall, or shall cause the Subservicer to, maintain a Servicing File consisting of all
documents necessary to service the Mortgage Loans. The possession of each Servicing File by the Servicer or the Subservicer is for the sole purpose of servicing the related Mortgage Loan, and such retention and possession by the Servicer or the
Subservicer is in a custodial capacity only. Each of the Servicer and the Subservicer acknowledges that the ownership of each Mortgage Loan is vested in the Trustee on behalf of the Certificateholders. All rights arising out of the Mortgage Loans
including all funds received on or in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans prepared by or which come into the possession of the Servicer or the Subservicer shall be received and held by
the Servicer or the Subservicer for the sole purpose of servicing the Mortgage Loans and such retention and possession by the Servicer or the Subservicer is in a custodial capacity only in trust for the exclusive benefit of the Trustee on behalf of
the Certificateholders as the owners of the Mortgage Loans. Any portion of the related Servicing Files retained by the Servicer or the Subservicer shall be appropriately identified in the Servicer’s or the Subservicer’s computer system to
reflect clearly the ownership of the related Mortgage Loans by the Trustee on behalf of the Certificateholders. The Servicer or the Subservicer shall release its custody of the contents of the related Servicing Files only in accordance with written
instructions of the Master Servicer, except when such release is required as incidental to the Servicer’s or the Subservicer’s servicing of the Mortgage Loans, such written instructions shall not be required. 
 Section 2.03. Books and Records. 
 The Servicer shall be responsible for maintaining, and shall maintain or cause the Subservicer to maintain, a complete set of books and records for the Mortgage Loans which shall be appropriately identified in the Servicer’s or the
Subservicer’s computer system to clearly reflect the ownership of the Mortgage Loan by the Trustee on behalf of the Certificateholders. In particular, the Servicer shall maintain or cause the Subservicer to maintain in its possession, available
for inspection by the Master Servicer or its designee, and shall deliver to the Master Servicer upon demand, evidence of compliance with all federal, state and local laws, rules and 

  

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regulations, including documentation as to the method used in determining the applicability of the provisions of the Flood Disaster Protection Act of 1973,
as amended, to the Mortgaged Property, documentation evidencing insurance coverage and eligibility of any condominium project for approval by Fannie Mae and periodic inspection reports as required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer or the Subservicer may be in the form of microfilm or microfiche or such other reliable means of recreating
original documents, including optical imagery techniques. 
 The Servicer shall maintain, or shall cause the Subservicer to maintain, with
respect to each Mortgage Loan, and make available for inspection by the Master Servicer or its designee, the related Servicing File (or copies thereof) during the time the Certificates remain outstanding and thereafter in accordance with applicable
laws and regulations. 
 Section 2.04. Delivery of Mortgage Loan Documents. 
 The Servicer shall forward, or shall cause the Subservicer to forward, to the Custodian on behalf of the Trustee original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 promptly after their execution; provided, however, that the Servicer shall provide, or shall cause the
Subservicer to provide, to the Custodian on behalf of the Trustee a certified true copy of any such document submitted for recordation promptly after its execution, and shall provide the original of any document submitted for recordation or a copy
of such document certified by the appropriate public recording office to be a true and complete copy of the original promptly after receipt thereof, but in no event later than 240 days after its execution; provided, however, that if such
delivery is not completed within 240 days solely due to delays in making such delivery by reason of the fact that such documents shall not have been returned by the appropriate recording office, the Servicer shall continue to use its best efforts to
obtain such documents, itself or through the Subservicer, and effect delivery as soon as possible after its receipt thereof. 
 From time to
time, the Servicer or the Subservicer may have a need for Mortgage Loan Documents to be released by the Custodian. If the Servicer or the Subservicer shall require any of the Mortgage Loan Documents, the Servicer or the Subservicer shall notify the
Custodian in writing of such request in the form of the request for release attached hereto as Exhibit D. During the time that any such documentation is held by the Servicer or the Subservicer, such possession is in trust for the benefit of
the Trustee on behalf of the Certificateholders, and the Servicer or the Subservicer shall return such documentation to the Custodian when the Servicer’s or the Subservicer’s need therefor no longer exists. 
  

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 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF THE SERVICER 
 Section 3.01. Representations of the
Servicer. 
 The Servicer hereby represents, warrants and covenants to the other parties hereto that, as of the Effective Date:

 (a) The Servicer is a corporation validly existing and in good standing under the laws of the State of Delaware and has all licenses
necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business
of the type conducted by the Servicer, and in any event the Servicer is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of the related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Servicer has the full corporate power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Servicer; and all requisite corporate action has been taken by the Servicer to make this Agreement valid and binding upon the Servicer in accordance with its terms; 
 (b) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Servicer, who is in the business of
servicing subprime mortgage loans; 
 (c) There is no action, suit, proceeding or investigation pending or, to the best knowledge of the
Servicer, threatened against the Servicer which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Servicer, or in any material
impairment of the right or ability of the Servicer to carry on its business substantially as now conducted, or in any material liability on the part of the Servicer, or which would draw into question the validity of this Agreement or the Mortgage
Loans or of any action taken or to be contemplated herein, or which would be likely to impair materially the ability of the Servicer to perform under the terms of this Agreement; 
 (d) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by
the Servicer of or compliance by the Servicer with this Agreement, or if required, such approval has been obtained prior to the Effective Date; 
 (e) The Servicer is an approved seller/servicer of conventional residential mortgage loans for Fannie Mae or an approved servicer of conventional mortgage loans for Freddie Mac, with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as the Mortgage Loans. The Servicer is in good standing to service mortgage loans for Fannie Mae or Freddie Mac, and no event has occurred, including but not limited to a change in
insurance coverage, which would make the Servicer unable to service the Mortgage Loans in accordance with the Servicing Standard and this Agreement; 
 (f) The Servicer will not waive any Prepayment Charge unless it is waived in accordance with the standard set forth in Section 4.17; and 
 (g) The Servicer will fully furnish or cause the Subservicer to fully furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and 

  

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complete information (i.e., favorable and unfavorable) on its borrower credit files to the three national credit repositories on a monthly basis. 

Section 3.02. Representations of the Subservicer. 
 The Subservicer hereby represents, warrants and covenants to the other parties hereto that, as of the Effective Date: 
 (a) The Subservicer is a corporation validly existing and in good standing under the laws of the State of Wyoming and has all licenses necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Subservicer, and in any event the Subservicer
is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of the related Mortgage Loan and the servicing of such Mortgage Loan in accordance with the terms of this Agreement; the Subservicer has the full
corporate power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement)
by the Subservicer and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Subservicer; and all requisite corporate action has
been taken by the Subservicer to make this Agreement valid and binding upon the Subservicer in accordance with its terms; 
 (b) The
consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Subservicer, who is in the business of servicing subprime mortgage loans; 
 (c) There is no action, suit, proceeding or investigation pending or, to the best knowledge of the Subservicer, threatened against the Subservicer which,
either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Subservicer, or in any material impairment of the right or ability of the
Subservicer to carry on its business substantially as now conducted, or in any material liability on the part of the Subservicer, or which would draw into question the validity of this Agreement or the Mortgage Loans or of any action taken or to be
contemplated herein, or which would be likely to impair materially the ability of the Subservicer to perform under the terms of this Agreement; 
 (d) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Subservicer of or compliance by the Subservicer with this Agreement, or if required,
such approval has been obtained prior to the Effective Date; 
 (e) The Subservicer is an approved seller/servicer of conventional
residential mortgage loans for Fannie Mae or an approved servicer of conventional mortgage loans for Freddie Mac, with the facilities, procedures, and experienced personnel necessary for the sound servicing of mortgage loans of the same type as the
Mortgage Loans. The Subservicer is in good 

  

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standing to service mortgage loans for Fannie Mae or Freddie Mac, and no event has occurred, including but not limited to a change in insurance coverage,
which would make the Subservicer unable to service the Mortgage Loans in accordance with the Servicing Standard and this Agreement; 
 (f)
The Subservicer will not waive any Prepayment Charge unless it is waived in accordance with the standard set forth in Section 4.17; and 
 (g) The Subservicer will fully furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to the three
national credit repositories on a monthly basis. 
 ARTICLE IV 
 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 
 Section 4.01. Servicer to
Act as Servicer. 
 (a) General. The Servicer shall, or shall cause the Subservicer to, service and administer the Mortgage Loans
in accordance with this Agreement and with the Servicing Standard (giving due consideration to the Trustee’s reliance on the Servicer and the Subservicer), and shall have full power and authority, acting alone, to do or cause to be done any and
all things in connection with such servicing and administration which the Servicer or the Subservicer may deem necessary or desirable and consistent with the terms of this Agreement and with the Servicing Standard. The Trustee shall deliver
powers-of-attorney, in forms reasonably acceptable to it, to the Servicer and the Subservicer sufficient to allow the Servicer and the Subservicer to execute all documentation requiring execution on behalf of the Trustee with respect to the
servicing of the Mortgage Loans, including satisfactions, partial releases, modifications and foreclosure documentation or, in the alternative, shall as promptly as reasonably feasible, execute and return such documentation to the Servicer or the
Subservicer. 
 (b) Modifications. Consistent with the terms of this Agreement, the Servicer or the Subservicer may waive, modify or
vary any term of any Mortgage Loan or consent to the postponement of any such term or in any manner grant indulgence to any Mortgagor if, in accordance with the Servicing Standard, such waiver, modification, postponement or indulgence is not
materially adverse to the Certificateholders; provided, however, that the Master Servicer, the Servicer or the Subservicer, as the case may be, shall not permit any modification with respect to any Mortgage Loan that would change the Mortgage
Rate, forgive the payment of principal or interest, reduce or increase the outstanding principal balance (except for actual payments of principal) or change the final maturity date on such Mortgage Loan or modify a Mortgage Loan that would result in
a “significant modification” for purposes of the REMIC Provisions, unless the Mortgage Loan is in default or default is reasonably foreseeable, in which case the Servicer or Subservicer, as the case may be, shall obtain the prior written
consent of the Master Servicer; provided further, that in the course of collecting past due payments, the Servicer or the Subservicer, without the consent of the Master Servicer, may temporarily defer the payment of principal or interest in
connection with a Payment Plan with the Mortgagor, 

  

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subject to Section 3.02 of the Pooling and Servicing Agreement in the case of any such action proposed to be taken by the Subservicer. 
 In the event of any such modification that has been agreed to in writing by the Master Servicer and that permits the deferral of interest or principal
payments on any Mortgage Loan, the Servicer or the Subservicer shall, on the Business Day immediately preceding the related Servicer Remittance Date, in any month in which any such principal or interest payment has been deferred, deposit in the
Custodial Account, from its own funds, in accordance with Section 4.04 and Section 5.03 hereof, the difference between (i) such month’s principal and one month’s interest at the related Mortgage Loan Remittance Rate on the
unpaid principal balance of such Mortgage Loan and (ii) the amount paid by the Mortgagor. The Servicer or the Subservicer, as the case may be, shall be entitled to reimbursement for such advances to the same extent as for all other Monthly
Advances pursuant to Section 4.05 hereof. Without limiting the generality of the foregoing, each of the Servicer and the Subservicer shall continue, and is hereby authorized and empowered to continue, to prepare, execute and deliver all
instruments of satisfaction or cancellation or of partial or full release, discharge and all other comparable instruments with respect to the Mortgage Loans and with respect to the Mortgaged Properties, subject to Section 3.02 of the Pooling
and Servicing Agreement, in the case of any such action proposed to be taken by the Subservicer. 
 With respect to Mortgage Loans affected
by a hurricane or other natural disaster, if the Mortgaged Property is located in public and individual assistance counties, as designated by Federal Emergency Management Agency (as set forth on its website www.fema.gov), EMC Mortgage
Corporation, as Servicer (or the Subservicer, if the Servicer is no longer servicing the Mortgage Loans), may, at its sole option, cease collection activities, charging late fees and credit reporting activity for all Mortgagors in such counties for
a period of time and, if reasonably prudent, may extend such period as long as it deems necessary. In addition, the Servicer (or the Subservicer, if the Servicer is no longer servicing the Mortgage Loans) may suspend all foreclosure and bankruptcy
activity relating to such Mortgage Loans for a period of time and, if reasonably prudent, may extend such period as long as it deems necessary. 
 Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or, in the judgment of the Servicer or the Subservicer, default is reasonably foreseeable, the Servicer or the Subservicer, consistent with the Servicing
Standard, may also waive, modify or vary any term of such Mortgage Loan (including modifications that would change the Mortgage Rate, forgive the payment of principal or interest, or waive, in whole or in part, a Prepayment Charge), accept payment
from the related Mortgagor of an amount less than the Stated Principal Balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any
and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “forbearance”), subject to Section 3.02 of the Pooling and Servicing Agreement in
the case of any such action proposed to be taken by the Subservicer. 
 (c) Subservicers. The Servicer shall perform all of its
servicing responsibilities hereunder or may cause the Subservicer, or any other subservicer if the Subservicer has been terminated or has resigned, to perform any such servicing responsibilities on its behalf, but the use by the Servicer, the
Subservicer or any other subservicer shall not release the Servicer from 

  

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any of its obligations hereunder and the Servicer shall remain responsible hereunder for all acts and omissions of each subservicer as fully as if such acts
and omissions were those of the Servicer. The Subservicer and any such other subservicer must be a Fannie Mae approved seller/servicer or a Freddie Mac approved seller/servicer in good standing and no event shall have occurred, including but not
limited to, a change in insurance coverage, which would make it unable to comply with the eligibility requirements for seller/servicers imposed by Fannie Mae or Freddie Mac, or which would require notification to Fannie Mae or Freddie Mac. The
Subservicer may retain its fees and expenses and/or withdraw such fees and expenses from the Custodial Account, to the same extent that the Servicer would be entitled to retain or withdraw such fees and expenses if the Servicer were owed them. The
Servicer shall pay all fees and expenses of any other subservicer from its own funds. A subservicer’s fee shall not exceed the Servicing Fee. 
 At the cost and expense of the Servicer, without any right of reimbursement from the Custodial Account, subject to the terms of the related subservicing agreement, the Servicer shall be entitled to terminate the rights and responsibilities
of a subservicer and arrange for any servicing responsibilities to be performed by a successor subservicer meeting the requirements in the preceding paragraph; provided, however, that nothing contained herein shall be deemed to prevent or
prohibit the Servicer, at the Servicer’s option, from electing to service the related Mortgage Loans itself. In the event that the Servicer’s responsibilities and duties under this Agreement are terminated pursuant to Section 8.04,
Section 9.01 or Section 10.01 hereof, and if requested to do so by the Master Servicer, the Servicer shall at its own cost and expense terminate the rights and responsibilities of each subservicer effective as of the date of termination of
the Servicer; provided that the Subservicer may only be terminated in accordance with the terms of the Subservicing Agreement. The Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of any subservicer from the Servicer’s own funds without reimbursement from any other Person. 
 Notwithstanding any of
the provisions of this Agreement relating to agreements or arrangements between the Servicer and a subservicer or any reference herein to actions taken through a subservicer or otherwise, the Servicer shall not be relieved of its obligations to the
Issuing Entity, the Master Servicer and the Trustee and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Mortgage Loans. The Servicer shall be responsible for ensuring
that the Subservicer and each other subservicer complies with any provision in this Agreement imposing obligations on the Subservicer or any other subservicer. The Servicer shall be entitled to enter into an agreement with the Subservicer or any
other subservicer for indemnification of the Servicer by the Subservicer or such other subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification. 
 Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a subservicer shall be deemed to be between
such subservicer and Servicer alone, and none of the Issuing Entity, the Master Servicer or the Trustee shall have any obligations, duties or liabilities with respect to such subservicer including no obligation, duty or liability to pay such
subservicer’s fees and expenses. For purposes of distributions and advances by the Servicer pursuant to this Agreement, the Servicer shall be deemed to have received a payment on a Mortgage Loan when the Subservicer or another subservicer has
received such payment. 
  

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 Section 4.02. Collection of Mortgage Loan Payments. 
 Continuously from the date hereof until the date each Mortgage Loan ceases to be subject to this Agreement, the Servicer shall proceed, or shall cause
the Subservicer to proceed, with reasonable diligence and in accordance with the Servicing Standard, to collect all payments due under each Mortgage Loan when the same shall become due and payable. Further, the Servicer shall, or shall cause the
Subservicer to, take reasonable care in ascertaining and estimating annual ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, mortgage insurance premiums, and all other charges that, as provided in the Mortgage Loan
Documents, will become due and payable to the end that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable. 
 Section 4.03. Realization Upon Defaulted Mortgage Loans. 
 The Servicer shall, or shall cause the Subservicer to, use its reasonable efforts, consistent with the Servicing Standard, to foreclose upon or otherwise comparably convert the ownership of properties securing such of
the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 4.01 hereof. The Servicer or the Subservicer may also, in its discretion,
as an alternative to foreclosure, sell defaulted Mortgage Loans at fair market value to third-parties, if the Servicer or the Subservicer reasonably believes that such sale would maximize proceeds to the Trustee and the Certificateholders in the
aggregate (on a present value basis) with respect to that Mortgage Loan. The Servicer shall, or shall cause the Subservicer to, use its reasonable efforts to realize upon defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and interest by the Issuing Entity and the Trustee, taking into account, among other things, the timing of foreclosure proceedings. The foregoing is subject to the provisions that, in any case in which any Mortgaged Property shall have
suffered damage, neither the Servicer nor the Subservicer shall be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion (a) that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan to the Trustee and the Certificateholders after reimbursement to itself for such expenses, and (b) that such expenses will be recoverable by the Servicer or the Subservicer, as the case may be, through
Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, as contemplated in Section 4.05 hereof. Each of the Servicer and the Subservicer shall be responsible for all costs and expenses incurred by it in any such
proceedings, sales or functions as Servicing Advances; provided, however, that each shall be entitled to reimbursement therefor as provided in Section 4.05 hereof. Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the Servicer or the Subservicer has reasonable cause to believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if the Master
Servicer otherwise requests an environmental inspection or review of such Mortgaged Property, such an inspection or review is to be conducted by a qualified inspector. Upon completion of the inspection, the Servicer or the Subservicer shall promptly
provide the Master Servicer with a written report of the environmental inspection. After reviewing the environmental inspection report, the Master Servicer shall direct the Servicer or the Subservicer 

  

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as to how the Servicer or the Subservicer shall proceed with respect to the Mortgaged Property, and the Servicer or the Subservicer shall follow the Master
Servicer’s directions with respect thereto. 
 The Servicer or the Subservicer, in its sole discretion, may, with respect to any
second-lien Mortgage Loan that is greater than 180 days delinquent and for which the related superior lien is not a Mortgage Loan, charge off such second-lien Mortgage Loan if it has made a Final Recovery Determination with respect thereto (each
such Mortgage Loan, a “Charged-off Mortgage Loan”). Neither the Servicer nor the Subservicer shall have any obligation to make any Monthly Advances or Servicing Advances with respect to such Charged-off Mortgage Loan for the period
following the date on which such second-lien Mortgage Loan was charged off. Any net Liquidation Proceeds received in connection with any recoveries received with respect to such Charged-off Mortgage Loan shall be deposited in the Custodial Account
pursuant to Section 4.04 hereof. 
 Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial Accounts.

 The Servicer shall, or shall cause the Subservicer to, segregate and hold all funds collected and received pursuant to each Mortgage Loan
separate and apart from any of its own funds and general assets and shall establish and maintain one or more Custodial Accounts. Any funds in a Custodial Account may be invested in Permitted Investments, with any income earned thereon for the
benefit of the party establishing the subject account. Funds deposited in the Custodial Account may be drawn on by the Servicer or the Subservicer, as applicable, only in accordance with Section 4.05 hereof. The creation of any Custodial
Account shall be evidenced by an account certification in the form shown in Exhibit B hereto. The original of such account certification shall be furnished to the Master Servicer upon reasonable request. Each of the Servicer and the
Subservicer acknowledges and agrees that it shall bear any losses incurred with respect to Permitted Investments it directs. The amount of any such losses shall be immediately deposited by the Servicer or the Subservicer, as applicable, into the
Custodial Account, out of its own funds, with no right to reimbursement therefor. 
 The Servicer shall, or shall cause the Subservicer to,
deposit into the Custodial Account within two Business Days of the Servicer’s or the Subservicer’s receipt, and retain therein, the following collections: 
 (a) all payments on account of principal, including Principal Prepayments, on the Mortgage Loans; 
 (b) all
payments on account of interest on the Mortgage Loans (adjusted to the related Mortgage Loan Remittance Rate in the case of deposits by the Subservicer); 
 (c) all Liquidation Proceeds; 
 (d) any net amounts received by the Servicer or the Subservicer in
connection with any REO Property pursuant to Section 4.13 hereof; 
 (e) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 4.08, Section 4.10 and Section 4.11 hereof, other than proceeds to be held in the Escrow 

  

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Account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with the Servicing Standard, the
Mortgage Loan Documents or applicable law; 
 (f) all Condemnation Proceeds affecting any Mortgaged Property other than proceeds to be held
in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with the Servicing Standard, the Mortgage Loan Documents or applicable law; 
 (g) any Monthly Advances as provided in Section 5.03 hereof; 
 (h) any amounts required to be deposited in the Custodial Account pursuant to Section 4.01, Section 4.14, Section 6.01 and Section 6.02 hereof; and 
 (i) any Prepayment Interest Shortfall, to the extent of the Servicing Fee received with respect to the related Due Period. 
 The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of Ancillary Income, to the extent permitted by Section 6.01 hereof, need not be deposited by the Servicer or the Subservicer in the Custodial Account. 
 Section 4.05. Permitted Withdrawals From the Custodial Account. 
 The Servicer or the Subservicer may, from time to time, make withdrawals from the Custodial Account for the following purposes: 
 (a) to make remittances to the Master Servicer in the amounts and in the manner provided for in Section 5.01 hereof; 
 (b) to reimburse itself for Monthly Advances it made, the Servicer’s or the Subservicer’s right to reimburse itself pursuant to this subclause (ii) being limited to amounts received on the related
Mortgage Loan which represent late collections, Liquidation Proceeds and Insurance Proceeds (net of the related Servicing Fees) of principal and/or interest respecting which it made any such Monthly Advance; 
 (c) to reimburse itself for unreimbursed Servicing Advances it made, the Servicer’s or the Subservicer’s right to reimburse itself pursuant to
this subclause (iii) with respect to any Mortgage Loan being limited to Liquidation Proceeds, Condemnation Proceeds, and Insurance Proceeds and REO Disposition Proceeds related to such Mortgage Loan; 
 (d) to pay to itself as servicing compensation (a) any interest earned on funds in the Custodial Account it maintains in its name (all such interest
to be withdrawn monthly not later than each Servicer Remittance Date), (b) any Prepayment Interest Excess and (c) any Servicing Fee or Subservicing Fee to which the Servicer or the Subservicer, respectively, is entitled in accordance with
the terms hereof to the extent such Servicing Fee or Subservicing Fee has not been paid to or retained by the Servicer or the Subservicer, it being understood that the 

  

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Subservicer shall not withdraw any portion of the Servicing Fee for any Due Period in excess of the Subservicing Fee for such Due Period; 
 (e) to reimburse itself for any Nonrecoverable Advances it made; 
 (f) to transfer funds to another Eligible Account in accordance with Section 4.09 hereof; 
 (g) to
remove funds deposited in the Custodial Account in error by the Servicer or the Subservicer; and 
 (h) to clear and terminate the Custodial
Account upon the termination of this Agreement. 
 Section 4.06. Establishment of Escrow Accounts; Deposits in Escrow Accounts.

 The Servicer shall, or shall cause the Subservicer to, segregate and hold all funds collected and received pursuant to each Mortgage Loan
which constitute Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain one or more Escrow Accounts. Any funds deposited in an Escrow Account may be invested in Permitted Investments. Funds
deposited in an Escrow Account may be drawn on by the Servicer or the Subservicer in accordance with Section 4.07 hereof. The creation of any Escrow Account shall be evidenced by an account certification in the form shown in Exhibit C.
The original of such account certification shall be furnished to the Master Servicer upon request. Each of the Servicer and the Subservicer acknowledges and agrees that it shall bear any losses incurred with respect to Permitted Investments it
directs. The amount of any such losses shall be immediately deposited by the Servicer or the Subservicer, as applicable, into the Escrow Account out of its own funds, with no right to reimbursement therefor. 
 The Servicer shall, or shall cause the Subservicer to, deposit in the Escrow Account or Accounts within two Business Days of Servicer’s receipt, and
retain therein: 
 (a) all Escrow Payments collected on account of the Mortgage Loans, for the purpose of effecting timely payment of any
items as are required under the terms of this Agreement; 
 (b) all Insurance Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property; and 
 (c) all Servicing Advances for Mortgagors whose Escrow Payments are insufficient to cover escrow
disbursements. 
 The Servicer or the Subservicer shall make withdrawals from an Escrow Account it maintains only to effect such payments as
are required under this Agreement, and for such other purposes as shall be as set forth in and in accordance with Section 4.07 hereof. Except as provided in Section 4.07 hereof, the Servicer or the Subservicer, as the case may be, shall be
entitled to retain any interest paid on funds deposited in an Escrow Account by the depository institution at which it is maintained. 
  

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 Section 4.07. Permitted Withdrawals From Escrow Account. 
 Withdrawals from the Escrow Account may be made by the Servicer or the Subservicer only: 
 (a) to effect timely payments of ground rents, taxes, assessments, water rates, fire and hazard insurance premiums, Primary Mortgage Insurance Policy
premiums, if applicable, and comparable items; 
 (b) to reimburse the Servicer or the Subservicer for any Servicing Advance made by the
Servicer or the Subservicer, as the case may be, with respect to a Mortgage Loan but only from amounts received on such Mortgage Loan which represent late payments of the amounts advanced thereunder; 
 (c) to refund to Mortgagors any funds as may be determined to be overages; 
 (d) for transfer to the Custodial Account in connection with an acquisition of REO Property; 
 (e) for
application to restoration or repair of the Mortgaged Property; 
 (f) to pay to the Servicer or the Subservicer, as the case may be, or to
the Mortgagor to the extent required by law, any interest paid on the funds deposited in the Escrow Account; 
 (g) to pay to the Mortgagors
or other parties Insurance Proceeds deposited in accordance with Section 4.06 hereof; 
 (h) to remove funds placed in an Escrow Account
in error by the Servicer or the Subservicer; and 
 (i) to clear and terminate the Escrow Account on the termination of this Agreement.

 As part of its servicing duties, the Servicer shall or shall cause the Subservicer to, pay to the Mortgagors interest on funds in an
Escrow Account, to the extent required by law, and to the extent that interest earned on funds in the Escrow Account is insufficient, shall pay such interest from its own funds, without any reimbursement therefor. 
 The Servicer will be responsible for the administration of the Escrow Accounts and will be obligated to make, or to cause the Subservicer to make,
Servicing Advances to the Escrow Account in respect of its obligations under this Section 4.07 hereof, when and as necessary to avoid the lapse of insurance coverage on the Mortgaged Property, and to avoid a tax lien being placed on the
Mortgaged Property. Notwithstanding the foregoing, if any such payment has not been made and the Servicer or the Subservicer receives notice of a tax lien with respect to the Mortgage being imposed, the Servicer will advance, or cause the
Subservicer to advance, Servicing Advances necessary to discharge such lien on the Mortgaged Property in order to prevent loss of title to the Mortgaged Property. 
  

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 Section 4.08. Payment of Taxes, Insurance and Other Charges, Collections Thereunder. 

With respect to each Mortgage Loan, the Servicer shall, or shall cause the Subservicer to, maintain accurate records reflecting the status of ground
rents, taxes, assessments, water rates and other charges which are or may become a lien upon the Mortgaged Property and fire and hazard insurance coverage and shall, or shall cause the Subservicer to, obtain, from time to time, all bills for the
payment of such charges, including renewal premiums and shall, or shall cause the Subservicer to, effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing maximum discounts allowable,
employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Servicer or the Subservicer in amounts sufficient for such purposes, as allowed under the terms of the Mortgage or
applicable law. To the extent that the Mortgage does not provide for Escrow Payments, the Servicer shall, or shall cause the Subservicer to, determine that any such payments are made by the Mortgagor when due. The Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely payments of all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make, or shall
cause the Subservicer to make, Servicing Advances from its own funds to effect such payments. 
 Section 4.09. Transfer of Accounts.

 The Servicer or the Subservicer may transfer the Custodial Account or the Escrow Account to a different Eligible Account from time to
time. The Servicer or the Subservicer, as applicable, shall notify the Master Servicer of any such transfer. 
 Amounts on deposit in the
Custodial Account and the Escrow Account, to the extent permitted by law and the Mortgage Loan Documents, at the option of the Servicer or the Subservicer, as applicable, may be invested in Permitted Investments. Any such Permitted Investment shall
mature no later than one day prior to the Servicer Remittance Date in each month; provided, however, that if such Permitted Investment is an obligation of the depository institution at which the Custodial Account is maintained, then such
Permitted Investment may mature on the related Servicer Remittance Date. Any such Permitted Investment shall be made in the name of the Servicer or the Subservicer, as applicable, in trust for the benefit of the Trustee. All income on or gain
realized from any such Permitted Investment shall be for the benefit of the Servicer or the Subservicer, as applicable, and may be withdrawn at any time by the Servicer or the Subservicer, as the case may be, to the extent permitted by law and the
Mortgage Loan Documents. Any losses incurred in respect of any such investment shall be deposited in the Custodial Account, by the Servicer or the Subservicer, as applicable, out of its own funds immediately as realized without right to
reimbursement therefor. If, at any time, the amount on deposit in the Custodial Account exceeds the amount of the applicable FDIC insurance, such excess above the amount of the applicable FDIC insurance shall be invested in Permitted Investments.

 Section 4.10. Maintenance of Hazard Insurance. 
 The Servicer shall, or shall cause the Subservicer to, cause to be maintained for each Mortgage Loan fire and hazard insurance with extended coverage as is customary in the area 

  

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where the Mortgaged Property is located in an amount which is equal to the lesser of (a) the maximum insurable value of the improvements securing such
Mortgage Loan and (b) the outstanding principal balance of the Mortgage Loan. If the Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as being a special flood hazard area that has
federally-mandated flood insurance requirements, the Servicer will cause to be maintained a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of (i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum insurable value of the improvements securing such Mortgage Loan and (iii) the maximum
amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall also maintain, or cause the Subservicer to maintain, on each REO Property, fire and hazard insurance with extended coverage in an
amount which is at least equal to the maximum insurable value of the improvements which are a part of such property, liability insurance and, to the extent required and available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer or the Subservicer under any such policies other than amounts to be deposited in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or
REO Property, or released to the Mortgagor in accordance with the Servicer’s or the Subservicer’s normal servicing procedures, or shall be deposited in the Custodial Account, subject to withdrawal pursuant to Section 4.05 hereof. It
is understood and agreed that no other additional insurance need be required by the Servicer or the Subservicer of the Mortgagor or maintained on property acquired in respect of the Mortgage Loans, except to the extent that applicable state or
federal laws and regulations as shall at any time be in force shall require such additional insurance. All such policies shall be endorsed with standard mortgagee clauses with loss payable to the Servicer or the Subservicer, as applicable, and its
successors and/or assigns and shall provide for at least thirty days prior written notice of any cancellation, reduction in the amount or material change in coverage to the Servicer or the Subservicer. The Servicer shall not, and shall cause the
Subservicer not to, interfere with the Mortgagor’s freedom of choice in selecting either his insurance carrier or agent; provided, however, that neither the Servicer nor the Subservicer shall accept any such insurance policies from
insurance companies unless such companies currently reflect a General Policy Rating of “B” or better by A.M. Best Company in Best’s Key Rating Guide. 
 Section 4.11. Blanket Hazard Insurance. 
 In the event that the Servicer or the Subservicer shall
obtain and maintain a blanket policy with an insurer acceptable under the Servicing Standard insuring against fire and hazards of extended coverage on all of the Mortgage Loans, then, to the extent such policy names the Servicer or the Subservicer
as loss payee and provides coverage in an amount equal to the amount required under Section 4.10 hereof, and otherwise complies with the requirements of Section 4.10 hereof, the Servicer shall be deemed conclusively to have satisfied its
obligations under Section 4.10 hereof, it being understood and agreed that such blanket policy may contain a deductible clause, in which case, in the event that there shall not have been maintained on the related Mortgaged Property a policy
complying with Section 4.10 hereof, and there shall have been a loss which would have been covered by such policy, the Servicer shall, or shall cause the Subservicer to, deposit into the Custodial Account the difference, if any, between the
amount that would have been payable under a policy complying with Section 4.10 hereof and the amount 

  

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paid under such blanket policy. Upon the request of the Master Servicer, the Servicer shall cause to be delivered to the Master Servicer a certified true
copy of such policy and a statement from the insurer thereunder that such policy shall in no event be terminated or materially modified without thirty days prior written notice to the Master Servicer. 
 Section 4.12. Fidelity Bond, Errors and Omissions Insurance. 
 The Servicer shall maintain, at its own expense, and shall cause the Subservicer to maintain, at its own expense, with an insurer acceptable under the Servicing Standard, a blanket fidelity bond (“Fidelity
Bond”) and an errors and omissions insurance policy, with broad coverage with responsible companies on all officers, employees and other persons acting in any capacity with regard to the Mortgage Loans and who handle funds, money, documents
and papers relating to the Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the Servicer and the Subservicer, as the case may be,
against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such persons. Such Fidelity Bond and errors and omissions insurance shall also protect and insure the Servicer and the Subservicer, as the case
may be, 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 4.12 requiring the Fidelity Bond and errors and omissions insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such
Fidelity Bond and insurance policy shall be at least equal to the corresponding amounts required by Fannie Mae or by Freddie Mac of the Servicer and the Subservicer, as the case may be. The Servicer shall, or shall cause the Subservicer to, deliver
to the Master Servicer, upon the Master Servicer’s request, a certificate from the surety and the insurer as to the existence of the Fidelity Bond and errors and omissions insurance policy and shall, or shall cause the Subservicer to, obtain a
statement from the surety and the insurer that such Fidelity Bond or insurance policy shall in no event be terminated or materially modified without thirty days prior written notice to the Master Servicer. The Servicer shall, or shall cause the
Subservicer to, notify the Master Servicer within five Business Days of receipt of notice that such Fidelity Bond or insurance policy will be, or has been, materially modified or terminated. 
 Section 4.13. Title, Management and Disposition of REO Property. 
 In the event the Trust acquires ownership of any REO Property in respect of any related Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Servicer or the Subservicer, as the case may be, shall sell any REO Property as expeditiously as possible and in accordance with the provisions of this Agreement and the Pooling and Servicing Agreement. The Servicer or the
Subservicer, as the case may be, shall sell any REO Property prior to three years after the end of the calendar year of its acquisition by REMIC I, unless (a) the Trustee shall have been supplied by the Servicer or the Subservicer, as
applicable, with an Opinion of Counsel to the effect that the holding by the Trust of such REO Property subsequent to such three-year period will not result in the imposition of taxes on “prohibited transactions” of any REMIC hereunder as
defined in Section 860F of the Code or cause any REMIC hereunder to fail to qualify as a REMIC at any 

  

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time that any Certificates are outstanding, in which case the Trust may continue to hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel) or (b) the Servicer or the Subservicer, as applicable, shall have applied for, prior to the expiration of such three-year period, an extension of such three-year period in the manner contemplated by Section 856(e)(3) of
the Code, in which case the three-year period shall be extended by the applicable extension period. The Servicer or the Subservicer, as the case may be, shall protect and conserve such REO Property in the manner and to the extent provided in the
Servicing Agreement, in accordance with the REMIC Provisions and in a manner that does not result in a tax on “net income from foreclosure property” or cause such REO Property to fail to qualify as “foreclosure property” within
the meaning of Section 860G(a)(8) of the Code. 
 The Servicer shall assume the responsibility for marketing each REO Property in
accordance with the Servicing Standard, itself or through the Subservicer. Following acquisition of any REO Property, the Servicer shall, or shall cause the Subservicer to, provide certain administrative services relating to such REO Property as set
forth in this Section 4.13. If a period longer than three years is necessary to sell any REO Property, the Servicer shall, or shall cause the Subservicer to, report monthly to the Master Servicer as to progress being made in selling such REO
Property after the end of the third year following the conversion of the related Mortgage Loan into REO Property. 
 The Servicer shall,
either itself or through the Subservicer or through an agent selected by the Servicer or the Subservicer, as applicable, in accordance with the Servicing Standard, manage, conserve, protect and operate each REO Property. Each REO Disposition shall
be carried out by the Servicer or the Subservicer, as the case may be, at such price and upon such terms and conditions as the Servicer or the Subservicer, as applicable, deems to be in the best interest of the Trustee and the Certificateholders and
as are approved in writing by the Master Servicer. The REO Disposition Proceeds from the sale of the REO Property shall be promptly deposited in the Custodial Account. As soon as practical thereafter, the expenses of such sale shall be paid and the
Servicer or the Subservicer, as applicable, shall reimburse itself for any related Servicing Advances, or Monthly Advances made by it with respect to such REO Property or the related Mortgage Loan. 
 The Servicer shall cause each REO Property to be inspected promptly upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least monthly thereafter or more frequently as may be required by the circumstances. The Servicer shall make or cause the inspector to make a written report of each such inspection. 
 Section 4.14. Notification of Adjustments. 
 With respect to each Mortgage Loan, the Servicer shall, or shall cause the Subservicer to, adjust (a) the Mortgage Rate on each related Interest Rate Adjustment Date and (b) the monthly payment amount in compliance with
requirements of applicable law and the related electronic data received on the Mortgage and Mortgage Note. The Servicer shall, or shall cause the Subservicer to, execute and deliver any and all necessary notices required under applicable law and the
terms of the related electronic data received on the Mortgage Note and Mortgage regarding the Mortgage Rate adjustments. The Servicer shall, or shall cause the Subservicer to, deliver to the Master Servicer promptly upon written request by the
Master Servicer, such 

  

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notifications and any additional applicable data regarding such adjustments and the methods used to calculate and implement such adjustments. Upon the
discovery by the Servicer or the receipt of notice by the Servicer or the Subservicer from the Master Servicer that the Servicer or the Subservicer has failed to adjust a Mortgage Rate or monthly payment amount in accordance with the terms of the
related Mortgage Note and Mortgage, the Servicer shall, or shall cause the Subservicer to, immediately deposit in the Custodial Account from its own funds the amount of any interest loss or deferral caused to the Trustee or Certificateholders
thereby. 
 Section 4.15. Retention of Mortgage Loans. 
 With respect to each Mortgage Loan for which the related Mortgagor, or its agent, has requested a payoff statement, People’s Choice Home Loan, Inc. may pursue measures aimed at retaining its mortgagee
relationship with such Mortgagor, including, without limitation, offering to refinance the related Mortgage Loan. 
 Section 4.16.
Compliance with Applicable Laws. 
 All requirements of any federal, state or local law applicable to the servicing of the Mortgage
Loans will be complied with by the Servicer and the Subservicer in all material respects. 
 Section 4.17. Waiver of Prepayment
Charges. 
 The Servicer shall waive (or permit the Subservicer to waive) a Prepayment Charge only under the following circumstances:
(a) such waiver is standard and customary in servicing similar Mortgage Loans and such waiver is related to a default or reasonably foreseeable default and would, in the reasonable judgment of the Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage Loan and, if such waiver is made in connection with a refinancing of the related Mortgage Loan, such refinancing is related to a default or a reasonably foreseeable
default, (b) such Prepayment Charge is unenforceable in accordance with applicable law or the collection of such related Prepayment Charge would otherwise violate applicable law or (c) the mortgage debt has been accelerated as a result of
the related Mortgagor’s default in making the related Monthly Payments. Notwithstanding any provision in this Agreement to the contrary, in the event the Prepayment Charge payable under the terms of the Mortgage Note is less than the amount of
the Prepayment Charge set forth in the Prepayment Charge schedule or other information provided to the Servicer by the Seller, the Servicer shall not have any liability or obligation with respect to such difference, and in addition shall not have
any liability or obligation to pay the amount of any uncollected Prepayment Charge if the failure to collect such amount is the direct result of inaccurate or incomplete information on the Prepayment Charge schedule. 
 Notwithstanding anything to the contrary contained in this Agreement, if the covenant of the Servicer set forth in this Section 4.17 is breached,
the Servicer will pay, or cause the Subservicer to pay, the amount of such waived Prepayment Charge, from its own funds without any right of reimbursement. 
  

 20 

 Section 4.18. Advance Facility. 
 Each of the Servicer and the Subservicer is hereby authorized to enter into any facility (an “Advance Facility”) with any Person (any
such Person, an “Advance Facility Counterparty”), without the consent of any party to this Agreement, which provides that the Servicer or the Subservicer may pledge or sell its rights to receive reimbursement of Monthly Advances and
Servicing Advances (collectively, “Advances”) pursuant to this Agreement and the Pooling and Servicing Agreement (“Advance Reimbursement Rights”) pursuant to credit facilities, repurchase facilities or similar
facilities providing liquidity for the funding of Advances, including facilities providing that such Advance Facility Counterparty may make all or a portion of the Advances. Notwithstanding the existence of any Advance Facility under which an
Advance Facility Counterparty agrees to fund Monthly Advances and/or Servicing Advances on the Servicer’s or the Subservicer’s behalf, the Servicer or the Subservicer, as the case may be, shall remain obligated pursuant to this Agreement
to make Monthly Advances and Servicing Advances pursuant to and as required by this Agreement and shall not be relieved of such obligations by virtue of such Advance Facility. 
 If the Servicer or the Subservicer enters into an Advance Facility, and for so long as an Advance Facility Counterparty remains entitled to receive
reimbursement for any Monthly Advances including Nonrecoverable Advances related thereto (“Monthly Advance Reimbursement Amounts”) and/or Servicing Advances including Nonrecoverable Advances related thereto (“Servicing
Advance Reimbursement Amounts” and, together with Monthly Advance Reimbursement Amounts, “Advance Reimbursement Amounts”) (in each case to the extent that such type of Advance Reimbursement Amount is included in the Advance
Facility), as applicable, then the Servicer or the Subservicer, as the case may be, shall identify such Advance Reimbursement Amounts as received, consistently with the reimbursement rights set forth in Section 4.05 and Section 4.07 of
this Agreement, and shall remit such Advance Reimbursement Amounts in accordance with the documentation establishing the Advance Facility to such Advance Facility Counterparty or to a trustee, agent or custodian (an “Advance Facility
Trustee”) designated by such Advance Facility Counterparty. Notwithstanding the foregoing, if so required pursuant to the terms of the Advance Facility, the Servicer or the Subservicer, as applicable, may direct the Securities Administrator
to pay, and if so directed the Securities Administrator is herby authorized to and shall pay, to the Advance Facility Counterparty or the Advance Facility Trustee the Advance Reimbursement Amounts identified pursuant to the preceding sentence.

 Advance Reimbursement Amounts shall consist solely of amounts in respect of Monthly Advances and/or Servicing Advances made with respect
to the Mortgage Loans for which the Servicer or the Subservicer, as the case may be, would be permitted to reimburse itself in accordance with this Agreement, assuming the Servicer or the Subservicer, as the case may be, had made the related Monthly
Advances and/or Servicing Advances. Notwithstanding anything to the contrary herein, in no event shall Advance Reimbursement Amounts be included in Available Funds or distributed to Certificateholders. An Advance Facility Counterparty whose
obligations are limited to the making of Advances will not be deemed to be a subservicer under this Agreement or be required to meet the criteria for qualification as a subservicer under this Agreement. 
  

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 Advance Reimbursement Amounts allocated to reimburse Monthly Advances or Servicing Advances made with
respect to any particular Mortgage Loan shall be allocated to the reimbursement of the unreimbursed Monthly Advances or Servicing Advances (as the case may be) made with respect to that Mortgage Loan on a “first-in, first out”
(“FIFO”) basis, such that the Advance Reimbursement Amounts shall be applied to reimburse the Monthly Advance or Servicing Advance (as the case may be) for that Mortgage Loan that was disbursed earliest in time first, and to
reimburse the Monthly Advance or Servicing Advance (as the case may be) for that Mortgage Loan that was disbursed latest in time last. The Servicer or the Subservicer, as the case may be, shall provide to the related Advance Facility Counterparty or
Advance Facility Trustee loan-by-loan information with respect to each Advance Reimbursement Amount remitted to such Advance Facility Counterparty or Advance Facility Trustee, to enable the Advance Facility Counterparty or Advance Facility Trustee
to make the FIFO allocation of each such Advance Reimbursement Amount with respect to each Mortgage Loan. 
 Upon request of the Servicer or
the Subservicer, as the case may be, the Securities Administrator and the Trustee agrees to execute such acknowledgments, certificates, and other documents recognizing the interests of any Advance Facility Counterparty in such Advance Reimbursement
Rights as the Servicer or the Subservicer may cause to be made subject to Advance Facilities pursuant to this Section 4.18, and such other documents in connection with such Advance Facilities as may be reasonably requested from time to time by
any Advance Facility Counterparty. Any amendment necessary for the implementation of the arrangement described in this Section 4.18 shall not require the consent of Certificateholders, the Master Servicer, the Securities Administrator, the
Issuing Entity, the Trustee or any other Person, so long as the amendment does not have any adverse effect on the rights of such parties. 
 ARTICLE V 
 REMITTANCES TO THE MASTER SERVICER 
 Section 5.01. Remittances. 
 On each
Servicer Remittance Date, the Servicer shall remit or cause the Subservicer to remit, by wire transfer of immediately available funds, to the Master Servicer the amounts required to be so remitted pursuant to Section 4.01(c) of the Pooling and
Servicing Agreement. Such amounts shall be wired pursuant to the following instructions: 
 PFRMS 2006-1 
 Wells Fargo Bank, N.A. 
 ABA# 121 000 248

 SAS Clearing 
 Account #
3970771416 
 For Further Credit to: PFRMS 2006-1 Account # 50938600 
 With respect to any remittance received by the Master Servicer after the Business Day on which such remittance was due, the Servicer shall remit to the
Master Servicer interest on any such late remittance amount at an annual rate equal to the Prime Rate, adjusted as of the date of each change, plus two percentage points, but in no event greater than the maximum amount permitted by applicable law.
Such interest shall be deposited in the Custodial Account by the 

  

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Servicer on the date such late remittance is made and shall cover the period commencing with the day following the Business Day such payment was due and
ending with the Business Day on which such remittance is made, both inclusive. Such interest shall be remitted along with the remittance required on the next succeeding Servicer Remittance Date. The payment by the Servicer of any such interest shall
not be deemed an extension of time for remittance or a waiver of any Event of Default by the Servicer. 
 Section 5.02. Monthly
Statements. 
 Not later than the tenth calendar day, or if such day is not a Business Day, the first Business Day immediately preceding
the tenth calendar day of the month of the related Servicer Remittance Date, the Servicer shall, or cause the Subservicer to, furnish to the Master Servicer a monthly remittance advice containing the information identified in Exhibit E,
Exhibit F and Exhibit G or otherwise in a mutually agreeable format, with regard to realized losses, to monthly loan remittance data and defaulted mortgage loans, with a trial balance report attached thereto, and such other loan level
information reasonably available to the Servicer and the Subservicer and requested by the Master Servicer; provided, however, that information with respect to Principal Prepayments in full during the related Prepayment Period shall not be
required to be delivered until noon Eastern Time on the Servicer Remittance Date. 
 Section 5.03. Monthly Advances. 
 On the Business Day immediately preceding each Servicer Remittance Date, the Servicer shall deposit, or shall cause the Subservicer to deposit, into the
Custodial Account from its own funds, an amount equal to all Monthly Payments (with interest adjusted to the Mortgage Loan Remittance Rate, in the case of Monthly Advances by the Subservicer) which were due on the Mortgage Loans during the
applicable Due Period and which were delinquent at the close of business on the immediately preceding Determination Date or which were deferred pursuant to Section 4.01 hereof. The Servicer or the Subservicer shall be deemed to have complied
with the Monthly Advance requirement if it includes in its remittance to the Master Servicer amounts held for future distribution in the Custodial Account in an amount which, when added to amounts deposited in respect of Monthly Advances out of the
Servicer’s or the Subservicer’s own funds, is equal to the amount of the required Monthly Advances. The Servicer shall replace, or shall cause the Subservicer to replace, in the Custodial Account any amounts held for future distribution
and used to cover some or all of the Monthly Advance obligations by deposit into the Custodial Account on or before any future Servicer Remittance Date if funds in the Custodial Account on such Servicer Remittance Date shall be less than payments to
the Master Servicer required to be made on such Servicer Remittance Date. The Servicer’s obligation to make, or cause the Subservicer to make, such Monthly Advances as to any Mortgage Loan will continue through the last Monthly Payment due
prior to the payment in full of the Mortgage Loan, or through the last Servicer Remittance Date prior to the Servicer Remittance Date for the distribution of all Liquidation Proceeds and other payments or recoveries (including REO Disposition
Proceeds, Insurance Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided, however, that such obligation shall cease if the Servicer or the Subservicer, as applicable, determines, in its sole reasonable opinion, that
advances with respect to such Mortgage Loan are non-recoverable by such Servicer or Subservicer from Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect to a particular 

  

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Mortgage Loan. In the event that the Servicer or the Subservicer, as the case may be, determines that any such Monthly Advance is a Nonrecoverable Advance,
such Servicer or Subservicer shall provide the Master Servicer with a certificate signed by an officer of the Servicer or the Subservicer, as the case may be, evidencing such determination. 
 Section 5.04. Liquidation Reports. 
 Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof on behalf of the Trustee pursuant to a deed-in-lieu of foreclosure, the Servicer shall, or shall cause the Subservicer to, submit to the Master Servicer a
liquidation report in the format set forth in Exhibit E attached hereto (or in such other format mutually agreed to by the Servicer or the Subservicer, as applicable, and the Master Servicer) and all supporting documentation reasonably
required by the Master Servicer. The Servicer shall also provide, or cause the Subservicer to provide, reports on the status of REO Property containing such information as the Master Servicer may reasonably require. 
 ARTICLE VI 
 GENERAL SERVICING
PROCEDURES 
 Section 6.01. Assumption Agreements. 
 The Servicer shall, or shall cause the Subservicer to, exercise its rights to accelerate the maturity of such Mortgage Loan under any “due-on-sale” clause to the extent permitted by law, to the extent it has
knowledge of any conveyance or prospective conveyance by any Mortgagor of a Mortgaged Property (whether by absolute conveyance or by contract of, sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage); provided, however, that the Servicer shall not, and shall cause the Subservicer not to, exercise any such rights if prohibited by law or the terms of the Mortgage Note from doing so or if the exercise of such rights would
impair or threaten to impair any recovery under the related Primary Mortgage Insurance Policy, if any. If the Servicer or the Subservicer, as the case may be, reasonably believes it is unable under applicable law to enforce such
“due-on-sale” clause, the Servicer shall, or shall cause the Subservicer to, enter into an assumption agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. If an assumption is allowed pursuant to this Section 6.01, the Servicer or the Subservicer, as applicable, with
the prior consent of the primary mortgage insurer, if any, is authorized to enter into a substitution of liability agreement with the person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to which the
original mortgagor is released from liability and such Person is substituted as mortgagor and becomes liable under the related Mortgage Note. Any such substitution of liability agreement shall be in lieu of an assumption agreement. 
 In connection with any such assumption or substitution of liability, the Servicer shall, or shall cause the Subservicer to, follow the Servicing
Standard. With respect to an assumption or substitution of liability, the Mortgage Rate borne by the related Mortgage Note and the amount of the Monthly Payment may not be changed. The Servicer shall, or shall cause the Subservicer to, notify the
Master Servicer that any such substitution of liability or assumption agreement has 

  

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been completed by forwarding to the Custodian, with a copy to the Master Servicer, the original of any such substitution of liability or assumption
agreement, which document shall be added to the related Mortgage Loan Documents and shall, for all purposes, be considered a part of such related mortgage file to the same extent as all other documents and instruments constituting a part thereof.
All fees collected by the Servicer or the Subservicer for entering into an assumption or substitution of liability agreement shall belong to the Servicer or the Subservicer, as the case may be. 
 Notwithstanding the foregoing paragraphs of this Section 6.01 or any other provision of this Agreement, the Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or any assumption which the Servicer may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 6.01, the term “assumption” is deemed to also include a sale of the Mortgaged Property subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement. 
 Section 6.02. Satisfaction of Mortgages and Release of Mortgage Loan Documents. 
 Upon the payment in full of any Mortgage Loan, the Servicer shall, or shall cause the Subservicer to, immediately notify the Custodian with a
certification and request for release in the form of Exhibit D by a Servicing Officer, which certification shall include (a) a statement to the effect that all amounts received in connection with such payment that are required to be
deposited in the Custodial Account pursuant to Section 4.04 hereof have been so deposited and (b) a request for delivery to the Servicer or the Subservicer of the Mortgage Loan Documents held by the Custodian. Upon receipt of such
certification and request, the Trustee shall promptly release or cause the Custodian to promptly release the related Mortgage Loan Documents to the Servicer or the Subservicer and the Servicer or the Subservicer shall prepare and deliver for
execution by the Trustee or, at the Trustee’s option, execute under the authority of a power of attorney, substantially in the form of Exhibit H hereto, delivered to the Servicer or the Subservicer by the Trustee any satisfaction or
release. No expense incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Custodial Account. 
 In the event the Servicer or the Subservicer satisfies or releases a Mortgage without having obtained payment in full of the indebtedness secured by the Mortgage or should it otherwise prejudice any right the Issuing
Entity or the Trustee may have under the mortgage instruments, the Servicer, upon written demand, shall remit, or shall cause the Subservicer to remit, to the Master Servicer within three Business Days the then outstanding principal balance of the
related Mortgage Loan by deposit thereof in the Custodial Account. The Servicer shall, or shall cause the Subservicer to, maintain the Fidelity Bond and errors and omissions insurance insuring the Servicer or the Subservicer against any loss it may
sustain with respect to any Mortgage Loan not satisfied in accordance with the procedures set forth herein. 
 From time to time and as
appropriate for the servicing or foreclosure of the Mortgage Loans, including for the purpose of collection under any Primary Mortgage Insurance Policy, the Servicer or the Subservicer may request the Custodian, as described in Section 3.07(a)
of the Pooling and Servicing Agreement pursuant to a request and certification in the form of Exhibit B  

  

 25 

 
to the Pooling and Servicing Agreement, to release to the Servicer or the Subservicer the related Mortgage Loan Documents held by the Custodian. The Servicer
or the Subservicer, as the case may be, shall promptly return the related Mortgage Loan Documents to the Custodian, when the need therefor by the Servicer or the Subservicer, as applicable, no longer exists, unless (i) the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Custodial Account, in which case, upon receipt of another request pursuant to Section 3.07(a) of the Pooling and Servicing Agreement, the
Trustee or the Custodian shall release the Mortgage File to the Servicer or the Subservicer, as applicable, or (ii) such documents have been delivered to an attorney, or to a public trustee or other public official as required by law, for
purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer or the Subservicer, as the case may be, has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the Person to whom such documents were delivered and the purpose or purposes of such delivery. 
 Section 6.03. Servicing Compensation. 
 As compensation to the Servicer for its services hereunder,
the Master Servicer shall pay to the Servicer, from interest payments on the Mortgage Loans, the amounts provided for as the Servicing Fee, minus the Subservicing Fee with respect to such Mortgage Loans for so long as the Subservicer is performing
the primary servicing of the Mortgage Loans pursuant to the Subservicing Agreement. Additional servicing compensation in the form of Ancillary Income shall be retained by the Subservicer or by the Servicer if the Subservicer is no longer performing
the primary servicing of the Mortgage Loans pursuant to the Subservicing Agreement. Each of the Servicer and the Subservicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for herein. The Subservicer shall be entitled to withdraw its Subservicing Fee from the Custodial Account or to retain its Subservicing Fee from interest collections on the Mortgage
Loans. 
 Section 6.04. Master Servicer’s Right to Examine Servicer Records. 
 The Master Servicer shall have the right to examine and audit, at its expense, upon reasonable notice to the Servicer or the Subservicer, during business
hours or at such other times as might be reasonable under applicable circumstances upon five Business Days notice (or two Business Days notice during an Event of Default), any and all of the books, records, documentation or other information of the
Servicer or the Subservicer, or held by another for the Servicer or the Subservicer or on its behalf or otherwise, which relate to the performance or observance by the Servicer or the Subservicer of the terms, covenants or conditions of this
Agreement. 
 Section 6.05. Non-solicitation. 
 Neither the Servicer nor the Subservicer or any other subservicer shall conduct any solicitation targeted to the Mortgagors for the purpose of inducing or encouraging the early prepayment or refinancing of the related
Mortgage Loans. It is understood and agreed that promotions undertaken by the Servicer or the Subservicer or any other subservicer or any agent 

  

 26 

 
or affiliate of the Servicer or the Subservicer or any other subservicer that are directed to the general public at large, including mass mailings based on
commercially acquired mailing lists, newspaper, radio and television advertisements, shall not constitute solicitation under this Section 6.05. 
 ARTICLE VII 
 REPORTS TO BE PREPARED BY SERVICER 
 Section 7.01. Servicer Shall Provide Information as Reasonably Required. 
 The Servicer shall, or shall cause the Subservicer to, furnish to the Master Servicer upon reasonable request, during the term of this Agreement, such
periodic, special or other reports or information, whether or not provided for herein, as shall be necessary, reasonable or appropriate with respect to the purposes of this Agreement. The Servicer or the Subservicer, as the case may be, may
negotiate with the Master Servicer for a reasonable fee for providing such report or information, unless (a) the Servicer or the Subservicer is required to supply such report or information pursuant to any other section of this Agreement, or
(b) the report or information has been requested in connection with Internal Revenue Service or other regulatory agency requirements. All such reports or information shall be provided by and in accordance with all reasonable instructions and
directions given by the Master Servicer. Each of the Servicer and the Subservicer agrees to execute and deliver all such instruments and take all such action as the Master Servicer, from time to time, may reasonably request in order to effectuate
the purpose and to carry out the terms of this Agreement. 
 ARTICLE VIII 
 THE SERVICER 
 Section 8.01. Indemnification; Third Party Claims.

 The Servicer agrees to indemnify the Issuing Entity, the Master Servicer, the Trustee, their respective successors and assigns, and any
agent of any of the foregoing (each an “Indemnified Person”) and hold each such Indemnified Person harmless from and against any and all claims, losses, damages, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that such Indemnified Person may sustain in any way related to the failure of the Servicer to perform its duties and service the Mortgage Loans in strict compliance with the terms of this Agreement
and for breach of any representation, warranty or covenant of the Servicer contained herein. The Servicer shall immediately notify the Master Servicer or other Indemnified Person if a claim is made by a third party with respect to this Agreement or
the Mortgage Loans, assume (with the prior written consent of the Master Servicer and such other Indemnified Person) the defense of any such claim and pay all expenses in connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or such other Indemnified Person in respect of such claim but failure to so notify the Master Servicer and such other Indemnified Person shall not limit its obligations hereunder. The
Servicer agrees that it will not enter into any settlement of any such claim without the consent of the Master Servicer and such other Indemnified Person unless such settlement includes an unconditional release of the Master Servicer and such other
Indemnified Person from all liability that is the subject matter of such claim. The provisions of 

  

 27 

 
this Section 8.01 shall survive termination of this Agreement, and the resignation or removal of the Trustee under the Pooling and Servicing Agreement.

 Section 8.02. Merger or Consolidation of the Servicer. 
 The Servicer shall keep in full effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation except as
permitted herein, and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement. 
 Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or any Person succeeding to the business of the Servicer whether or not related to loan servicing, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person shall be an
institution (a) having a GAAP net worth of not less than $25,000,000, (b) the deposits of which are insured by the FDIC, or which is a HUD-approved mortgagee whose primary business is in origination and servicing of first-lien 1-4 family
mortgage loans, and (c) which is a Fannie Mae or Freddie Mac approved seller/servicer in good standing. Furthermore, in the event the Servicer transfers or otherwise disposes of all or substantially all of its assets to an affiliate of the
Servicer, such affiliate shall satisfy the condition above, and shall also be fully liable to the Master Servicer, the Issuing Entity and the Trustee for all of the Servicer’s obligations and liabilities hereunder. 
 Section 8.03. Limitation on Liability of the Servicer and Others. 
 Neither the Servicer nor any of the directors, officers, employees or agents of the Servicer nor the Subservicer or any other subservicer shall be under any liability to any Person for any action taken or for
refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment made in good faith; provided, however, that this provision shall not protect the Servicer, the Subservicer or any such Person against
any breach of warranties or representations made herein, or failure to perform its obligations in compliance with any standard of care set forth in this Agreement, or any liability which would otherwise be imposed under this Agreement. The Servicer,
the Subservicer, each other subservicer and any director, officer, employee or agent of the Servicer, the Subservicer or any such other subservicer 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. None of the Servicer, the Subservicer, nor any such other subservicer shall be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to service
the Mortgage Loans in accordance with this Agreement and which in its opinion may involve it in any expenses or liability; provided, however, that the Servicer, the Subservicer or another subservicer may, with the consent of the Master
Servicer, undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto. In such event, the reasonable legal expenses and costs of such action and any liability
resulting therefrom shall be Servicing Advances. 
  

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 Section 8.04. Servicer Not to Resign. 
 The Servicer shall not assign this Agreement or resign from the obligations and duties hereby imposed on it except by mutual consent of the Servicer and
the Master Servicer or upon the determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by the Servicer. Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Master Servicer which Opinion of Counsel shall be in form and substance acceptable to the Master Servicer. No such resignation shall become effective until a successor shall have
assumed the Servicer’s responsibilities and obligations hereunder in the manner provided in Section 12.01 hereof. 
 Section 8.05.
No Transfer of Servicing. 
 With respect to the retention of the Servicer to service the Mortgage Loans hereunder, the Servicer
acknowledges that each of the Issuing Entity, the Trustee and the Master Servicer has acted in reliance upon the Servicer’s independent status, the adequacy of its servicing facilities, plan, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any way limiting the generality of this Section 8.05, the Servicer shall not either assign this Agreement or the servicing hereunder or delegate its rights or duties
hereunder or any portion thereof, or sell or otherwise dispose of all or substantially all of its property or assets, without the prior written approval of the Master Servicer. 
 ARTICLE IX 
 DEFAULT 
 Section 9.01. Events of Default. 
 Each of the following shall constitute an Event of Default on the part of the Servicer: 
 (a) any failure by the Servicer or the
Subservicer to remit to the Master Servicer any payment required to be made under the terms of this Agreement which continues unremedied for a period of two Business Days after written notice to the Servicer thereof it being understood that this
subparagraph shall not affect the Servicer’s obligation pursuant to Section 5.01 hereof to pay default interest on any remittance received by the Master Servicer after the Business Day on which such payment was due; 
 (b) any failure by the Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Servicer
set forth in this Agreement, the breach of which has a material adverse effect and which continues unremedied for a period of thirty days (except that such number of days shall be fifteen in the case of a failure to pay any premium for any insurance
policy required to be maintained under this Agreement) after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Master Servicer (other than with respect to
Section 11.03, Section 11.04 and Section 11.05 hereof, which shall precipitate an automatic default with no notice requirement or cure period); 
  

 29 

 (c) a decree or order of a court or agency or supervisory authority having jurisdiction for the
appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty days; 
 (d) the
Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Servicer or of or relating to
all or substantially all of its property; 
 (e) the Servicer shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency, bankruptcy or reorganization statute, make an assignment for the benefit of its creditors, voluntarily suspend payment of its obligations or cease its normal business operations
for two Business Days; 
 (f) the Servicer is no longer an approved Servicer by either Fannie Mae or Freddie Mac; 
 (g) the Servicer attempts, without the consent of the Master Servicer, to sell or otherwise dispose of all or substantially all of its property or assets
or to assign this Agreement or the servicing responsibilities hereunder or to delegate its duties hereunder or any portion thereof except as otherwise permitted herein; 
 (h) the Servicer ceases to be qualified to transact business in any jurisdiction where it is currently so qualified, but only to the extent such non-qualification materially and adversely affects the Servicer’s
ability to perform its obligations hereunder; 
 (i) if (i) any of the Rating Agencies reduces or withdraws the rating of any of the
Certificates due to a reason attributable to the Servicer or (ii) the Servicer’s residential primary servicer rating for servicing of subprime loans issued by any of the Rating Agencies is reduced by more than one level from the level in
effect on the Reconstitution Date; or 
 (j) the net worth of the Servicer shall be less than $25,000,000. 
 In each and every such case, so long as an Event of Default shall not have been remedied, the Master Servicer, by notice in writing to the Servicer may,
in addition to whatever rights the Master Servicer may have under Section 8.01 or Section 11.07 hereof and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the
Servicer, the Subservicer or any other subservicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Servicer, the Subservicer or any other subservicer for the same; provided, however, that
the Subservicer may not be terminated unless the Event of Default resulted from a breach by the Subservicer. 
 From and after the
receipt by the Servicer, the Subservicer or any other subservicer, as the case may be, of such written notice, all authority and power of the Servicer, the Subservicer or any other subservicer, as the case may be, under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the successor appointed pursuant to 

  

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Section 12.01 hereof. Upon written request from the Master Servicer, the Servicer, the Subservicer or any other subservicer, as the case may be, shall
prepare, execute and deliver, any and all documents and other instruments, place in such successor’s possession all Servicing Files (except to the extent they are in the possession of the Subservicer and the Subservicer is not being
terminated), and do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Servicer’s, the Subservicer’s or any other subservicer’s sole expense, as the case may be. The Servicer, the Subservicer or any other subservicer, as the case may be, agrees to cooperate with the Master Servicer and
such successor in effecting the termination of the Servicer’s, the Subservicer’s or any other subservicer’s responsibilities and rights hereunder, including, without limitation, the transfer to such successor for administration by it
of all cash amounts which shall at the time be credited by the Servicer, the Subservicer or any other subservicer, as the case may be, to the Custodial Account or Escrow Account or thereafter received with respect to the Mortgage Loans (except to
the extent such accounts are maintained by the Subservicer and the Subservicer is not being terminated). 
 Section 9.02. Waiver of
Defaults. 
 The Master Servicer may waive, only by written notice, any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived in writing. 
 ARTICLE X 
 TERMINATION 
 Section 10.01. Termination. 
 The respective obligations and responsibilities of the Servicer shall
terminate upon the earliest to occur of the following: (a) the later of the final payment or other liquidation (or any advance with respect thereto) of the last Mortgage Loan or the disposition of any REO Property and the remittance of all
funds due hereunder, in which case the servicing shall belong to the Subservicer, and (b) termination by the Master Servicer pursuant to Section 9.01 hereof. Simultaneously with any such termination, the Servicer shall be entitled to be
reimbursed for any outstanding Servicing Advances and Monthly Advances made by the Servicer (net of any amounts owed by the Servicer to the Master Servicer hereunder). In no event shall the Servicer be entitled to any termination fee or other
compensation with respect to any termination of this Agreement or the Servicer’s rights hereunder, in whole or in part. 
 The Servicer
shall have the right to exercise a clean up call by purchasing all of the Mortgage Loans and REO Properties if the holders of a majority of the Certificates by Percentage Interest do not redeem the Certificates within 90 days after the date the
Stated Principal Balance of the Mortgage Loans is reduced to less than 10% of the Stated Principal Balance of such Mortgage Loans as of the Cut-off Date. The price for such purchase shall be 

  

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equal to the aggregate unpaid principal balance of the Mortgage Loans plus interest thereon at the applicable Mortgage Rates through the end of the month of
such repurchase, plus the fair market value of any REO property included in the Trust as determined by the Servicer in good faith; provided, however, that such purchase price shall at least equal the outstanding principal balance of all
Outstanding Certificates plus interest accrued thereon at the related Certificate Rates through the date of the purchase; and provided further, that this right to purchase shall belong solely to the Subservicer for as long as the Subservicer
is performing the primary servicing of the Mortgage Loans pursuant to the Subservicing Agreement. 
 ARTICLE XI 
 COMPLIANCE WITH REGULATION AB 
 DEFINED
TERMS 
 The following definitions apply to this Article XI: 
 Exchange Act: The Securities Exchange Act of 1934, as amended. 
 Qualified Correspondent: Any
Person from which the Servicer purchased Mortgage Loans, provided that the following conditions are satisfied: (a) such Mortgage Loans were originated pursuant to an agreement between the Servicer and such Person that contemplated that such
Person would underwrite mortgage loans from time to time, for sale to the Servicer, in accordance with underwriting guidelines designated by the Servicer (“Designated Guidelines”) or guidelines that do not vary materially from such
Designated Guidelines; (b) such Mortgage Loans were in fact underwritten as described in clause (a) above and were acquired by the Servicer within 180 days after origination; (c) either (i) the Designated Guidelines were, at the
time such Mortgage Loans were originated, used by the Servicer in origination of mortgage loans of the same type as the Mortgage Loans for the Servicer’s own account or (ii) the Designated Guidelines were, at the time such Mortgage Loans
were underwritten, designated by the Servicer on a consistent basis for use by lenders in originating mortgage loans to be purchased by the Servicer; and (d) the Servicer employed, at the time such Mortgage Loans were acquired by the Servicer,
pre-purchase or post-purchase quality assurance procedures (which may involve, among other things, review of a sample of mortgage loans purchased during a particular time period or through particular channels) designed to ensure that Persons from
which it purchased mortgage loans properly applied the underwriting criteria designated by the Servicer. 
 Reconstitution: Any
Securitization Transaction or Whole Loan Transfer. 
 Securitization Transaction: Any transaction involving either (a) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities or (b) an issuance of publicly
offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of residential mortgage loans consisting, in whole or in part, of some or all of the Mortgage Loans.

 Servicer: For purposes of Section 11.03(e), as defined in such Section; otherwise, as defined in the introductory paragraph to
this Agreement. 
  

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 Servicer Information: As defined in Section 11.07(a). 
 Static Pool Information: Static pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation AB. 
 Subcontractor: Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly
understood by participants in the mortgage-backed securities market) of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of
the Servicer or a Subservicer. 
 Third-Party Originator: Each Person, other than a Qualified Correspondent, that originated Mortgage
Loans acquired by the Servicer. 
 Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction. 
 Section 11.01. Additional Representations and Warranties of the Servicer. 
 (a) The Servicer hereby represents to any Master Servicer and to the Depositor, as of the date on which information is first provided to any Master
Servicer or the Depositor under Section 11.02 that, except as disclosed in writing to such Master Servicer or the Depositor prior to such date: (i) the Servicer is not aware and has not received notice that any default, early amortization
or other performance triggering event has occurred as to any other securitization due to any act or failure to act of the Servicer; (ii) the Servicer has not been terminated as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance test or trigger; (iii) no material noncompliance with the applicable servicing criteria with respect to other securitizations of residential mortgage loans involving the
Servicer as servicer has been disclosed or reported by the Servicer; (iv) no material changes to the Servicer’s policies or procedures with respect to the servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have occurred during the three-year period immediately preceding the related Securitization Transaction; (v) there are no aspects of the Servicer’s financial condition
that could have a material adverse effect on the performance by the Servicer of its servicing obligations under this Agreement or any Reconstitution Agreement; (vi) there are no material legal or governmental proceedings pending (or known to be
contemplated) against the Servicer, any Subservicer or any Third-Party Originator; and (vii) there are no affiliations, relationships or transactions relating to the Servicer, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related Depositor of a type described in Item 1119 of Regulation AB. 
 (b) If so requested by any Master Servicer or the Depositor on any date following the date on which information is first provided to any Master Servicer or the Depositor under Section 11.02, the Servicer shall, within five Business
Days following such request, confirm in writing the accuracy of the representations and warranties set forth in paragraph (a) of this Section 11.01 or, if any such representation and warranty is not accurate as of the date of such 

  

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request, provide reasonably adequate disclosure of the pertinent facts, in writing, to the requesting party. 
 Section 11.02. Information to Be Provided by the Servicer. 
 (a) In connection with any Securitization Transaction, the Servicer shall (i) within five Business Days following request by the Depositor, provide to the Depositor (or, as applicable, cause each Third-Party
Originator and each Subservicer to provide), in writing and in form and substance reasonably satisfactory to the Depositor, the information and materials specified in paragraphs (a), (b), (c), (e), (f) and (g) of this Section 11.02,
and (ii) as promptly as practicable following notice to or discovery by the Servicer, provide to the Depositor (in writing and in form and substance reasonably satisfactory to the Depositor) the information specified in paragraph (d) of
this Section 11.02. 
 (b) If so requested by the Depositor, the Servicer shall provide such information regarding (i) the
Servicer, as originator of the Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified Correspondent), or (ii) each Third-Party Originator, and (iii) as applicable, each Subservicer, as is requested for the purpose of
compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such information shall include, at a minimum: 
 (i) the originator’s form of organization; 
 (ii) a description of the originator’s origination program
and how long the originator has been engaged in originating residential mortgage loans, which description shall include a discussion of the originator’s experience in originating mortgage loans of a similar type as the Mortgage Loans;
information regarding the size and composition of the originator’s origination portfolio; and information that may be material, in the good faith judgment of the Depositor, to an analysis of the performance of the Mortgage Loans, including the
originators’ credit-granting or underwriting criteria for mortgage loans of similar type(s) as the Mortgage Loans and such other information as the Depositor may reasonably request for the purpose of compliance with Item 1110(b)(2) of
Regulation AB; 
 (iii) a description of any material legal or governmental proceedings pending (or known to be contemplated)
against the Servicer, each Third-Party Originator and each Subservicer; and 
 (iv) a description of any affiliation or
relationship between the Servicer, each Third-Party Originator, each Subservicer and any of the following parties to a Securitization Transaction, as such parties are identified to the Servicer by the Depositor in writing in advance of such
Securitization Transaction: 
 (A) the sponsor; 
 (B) the depositor; 
 (C) the issuing entity; 
  

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 (D) any servicer; 
 (E) any trustee; 
 (F) any originator; 
 (G) any significant obligor; 
 (H) any enhancement or support provider; and 
 (I) any other material transaction party. 
 (c) If so requested by the Depositor, the Servicer shall provide
(or, as applicable, cause each Third-Party Originator to provide) Static Pool Information with respect to the mortgage loans (of a similar type as the Mortgage Loans, as reasonably identified by the Depositor as provided below) originated by
(i) the Servicer, if the Servicer is an originator of Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified Correspondent), and/or (ii) each Third-Party Originator. Such Static Pool Information shall be prepared by
the Servicer (or Third-Party Originator) on the basis of its reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably available to the Servicer (or
Third-Party Originator) Static Pool Information with respect to more than one mortgage loan type, the Depositor shall be entitled to specify whether some or all of such information shall be provided pursuant to this paragraph. The content of such
Static Pool Information may be in the form customarily provided by the Servicer, and need not be customized for the Depositor. Such Information for each vintage origination year or prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life of the mortgage loans included in the vintage origination year or prior securitized pool. The most recent periodic increment must be as of a date no later than 135 days prior to the date of
the prospectus or other offering document in which the Static Pool Information is to be included or incorporated by reference. The Static Pool Information shall be provided in an electronic format that provides a permanent record of the information
provided, such as a portable document format (pdf) file, or other such electronic format reasonably required by the Depositor. 
 (d) If so
requested by the Depositor, the Servicer shall provide (or, as applicable, cause each Third-Party Originator to provide), at the expense of the requesting party (to the extent of any additional incremental expense associated with delivery pursuant
to this Agreement), such statements and agreed-upon procedures letters of certified public accountants reasonably acceptable to the Depositor, pertaining to Static Pool Information relating to prior securitized pools for securitizations closed on or
after January 1, 2006, or, in the case of Static Pool Information with respect to the Servicer’s or Third-Party Originator’s originations or purchases, to calendar months commencing January 1, 2006, as the Depositor shall
reasonably request. Such statements and letters shall be addressed to and be for the benefit of such parties as the Depositor shall designate, which may include, by way of example, any Sponsor, the Depositor and any broker dealer acting as
underwriter, placement agent or initial purchaser with respect to a Securitization Transaction. Any such statement or letter may take the form of a 

  

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standard, generally applicable document accompanied by a reliance letter authorizing reliance by the addressees designated by the Depositor. 
 (e) If so requested by the Depositor, the Servicer shall provide such information regarding the Servicer, as servicer of the Mortgage Loans, and each
Subservicer (each of the Servicer and each Subservicer, for purposes of this paragraph, a “Servicer”), as is requested for the purpose of compliance with Items 1108, 1117 and 1119 of Regulation AB. Such information shall include, at
a minimum: 
 (i) the Servicer’s form of organization; 
 (ii) a description of how long the Servicer has been servicing residential mortgage loans; a general discussion of the Servicer’s
experience in servicing assets of any type as well as a more detailed discussion of the Servicer’s experience in, and procedures for, the servicing function it will perform under this Agreement and any Reconstitution Agreements; information
regarding the size, composition and growth of the Servicer’s portfolio of residential mortgage loans of a type similar to the Mortgage Loans and information on factors related to the Servicer that may be material, in the good faith judgment of
the Depositor, to any analysis of the servicing of the Mortgage Loans or the related asset-backed securities, as applicable, including, without limitation: 
 (A) whether any prior securitizations of mortgage loans of a type similar to the Mortgage Loans involving the Servicer have defaulted or experienced an early amortization or other performance triggering event because
of servicing during the three-year period immediately preceding the related Securitization Transaction; 
 (B) the extent of
outsourcing the Servicer utilizes; 
 (C) whether there has been previous disclosure of material noncompliance with the
applicable servicing criteria with respect to other securitizations of residential mortgage loans involving the Servicer as a servicer during the three-year period immediately preceding the related Securitization Transaction; 
 (D) whether the Servicer has been terminated as servicer in a residential mortgage loan securitization, either due to a servicing default
or to application of a servicing performance test or trigger; and 
 (E) such other information as the Depositor may
reasonably request for the purpose of compliance with Item 1108(b)(2) of Regulation AB; 
 (iii) a description of any
material changes during the three-year period immediately preceding the related Securitization Transaction to the Servicer’s policies or procedures with respect to the servicing function it will perform under this Agreement and any
Reconstitution Agreements for mortgage loans of a type similar to the Mortgage Loans; 
 (iv) information regarding the
Servicer’s financial condition, to the extent that there is a material risk that an adverse financial event or circumstance involving the Servicer 

  

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could have a material adverse effect on the performance by the Servicer of its servicing obligations under this Agreement or any Reconstitution Agreement;

 (v) information regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s overall servicing
portfolio of residential mortgage loans for the three-year period immediately preceding the related Securitization Transaction, which may be limited to a statement by an authorized officer of the Servicer to the effect that the Servicer has made all
advances required to be made on residential mortgage loans serviced by it during such period, or, if such statement would not be accurate, information regarding the percentage and type of advances not made as required, and the reasons for such
failure to advance; 
 (vi) a description of the Servicer’s processes and procedures designed to address any special or
unique factors involved in servicing loans of a similar type as the Mortgage Loans; 
 (vii) a description of the
Servicer’s processes for handling delinquencies, losses, bankruptcies and recoveries, such as through liquidation of mortgaged properties, sale of defaulted mortgage loans or workouts; 
 (viii) information as to how the Servicer defines or determines delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other practices with respect to delinquency and loss experience; and 
 (ix) a description of any material legal or governmental proceedings pending (or known to be contemplated) against the Servicer; and 
 (x) a description of any affiliation or relationship between the Servicer and any of the following parties to a Securitization Transaction, as such parties are identified to the Servicer by the Depositor in writing in
advance of such Securitization Transaction: 
 (A) the sponsor; 
 (B) the depositor; 
 (C) the issuing entity; 
 (D) any servicer; 
 (E) any trustee; 
 (F) any originator; 
 (G) any significant obligor; 
 (H) any enhancement or support provider; and 
 (I) any other material transaction party. 
  

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 (f) For the purpose of satisfying the Depositor’s reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Servicer and the Subservicer, along with any other subservicers, will adhere to their respective obligations under Article XII of the Pooling and Servicing Agreement. 
 (g) The Servicer shall provide to any Master Servicer and the Depositor evidence of the authorization of the person signing any certification or
statement, copies or other evidence of Fidelity Bond and errors and omission insurance, financial information and reports and such other information related to the Servicer or any Subservicer or the Servicer or such Subservicer’s performance
hereunder as may be reasonably requested by such Master Servicer or the Depositor. 
 Section 11.03. Servicer Compliance Statement.

 On or before March 15th of each calendar year, commencing in 2007, the Servicer and the Subservicer shall deliver to any Master Servicer and the Depositor a statement of compliance addressed to such Master Servicer and the Depositor and signed by
an authorized officer of the Servicer and the Subservicer, to the effect that (a) a review of the Servicer’s or Subservicer’s activities during the immediately preceding calendar year (or applicable portion thereof) and of its
performance under this Agreement and any applicable Reconstitution Agreement during such period has been made under such officer’s supervision, and (b) to the best of such officers’ knowledge, based on such review, the Servicer or the
Subservicer, as applicable, has fulfilled all of its obligations under this Agreement and any applicable Reconstitution Agreement in all material respects throughout such calendar year (or applicable portion thereof) or, if there has been a failure
to fulfill any such obligation in any material respect, specifically identifying each such failure known to such officer and the nature and the status thereof. 
 Section 11.04. Report on Assessment of Compliance and Attestation. 
 (a) On or before
March 15th of each calendar year, commencing in 2007, the Servicer and the Subservicer shall: 
 (i) deliver to any Master Servicer and the Depositor a report (in form and substance reasonably satisfactory to such Master Servicer and
the Depositor) regarding the Servicer’s or the Subservicer’s assessment of compliance with the Servicing Criteria during the immediately preceding calendar year (or applicable portion thereof), as required under Rules 13a-18 and 15d-18 of
the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to such Master Servicer and the Depositor and signed by an authorized officer of the Servicer and the Subservicer, and shall address the specific terms for the
Servicer and the Subservicer on the “Applicable Servicing Criteria” specified on Exhibit I hereto delivered to the Depositor at the time of any Securitization Transaction; 
 (ii) deliver to any Master Servicer and the Depositor a report of a registered public accounting firm reasonably acceptable to such Master
Servicer and the Depositor that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation
S-X under the Securities Act and the Exchange Act; 
  

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 (iii) cause each Subservicer, and each Subcontractor determined by the Servicer pursuant
to Section 11.05(b) to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to any Master Servicer and the Depositor an assessment of compliance and accountants’
attestation as and when provided in paragraphs (a) and (c) of this Section 11.04; and 
 (iv) deliver, and
cause each Subservicer and Subcontractor described in clause (iii) to provide, to the Depositor, any Master Servicer and any other Person that will be responsible for signing the certification (a “Sarbanes Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of an asset-backed Issuing Entity with respect to a Securitization Transaction a certification, signed by the
appropriate officer of the Servicer and the Subservicer, as applicable, in the form attached hereto as Exhibit J. 
 (b) The Servicer
acknowledges that the parties identified in clause (a)(iv) above may rely on the certification provided by the Servicer pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission. 
 (c) Each assessment of compliance provided by a Subservicer pursuant to Section 11.04(a)(i) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Exhibit I hereto delivered to the Depositor concurrently with the execution of this Agreement or, in the case of a Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant to Section 11.04(a)(iii) need not address any elements of the Servicing Criteria other than those specified by the Servicer pursuant to Section 11.05.

 Section 11.05. Use of Subservicers and Subcontractors. 
 (a) The Servicer shall not hire or otherwise utilize the services of any Subservicer to fulfill any of the obligations of the Servicer as servicer under
this Agreement or any Reconstitution Agreement unless the Servicer complies with the provisions of paragraph (b) of this Section 11.05. The Servicer shall not hire or otherwise utilize the services of any Subcontractor, and shall not
permit any Subservicer to hire or otherwise utilize the services of any Subcontractor, to fulfill any of the obligations of the Servicer as servicer under this Agreement or any Reconstitution Agreement unless the Servicer complies with the
provisions of paragraphs (c) and (d) of this Section 11.05. 
 (b) It shall not be necessary for the Servicer to seek the
consent of any Master Servicer or the Depositor to the utilization of any Subservicer. The Servicer shall cause any Subservicer used by the Servicer (or by any Subservicer) for the benefit of the Depositor to comply with the provisions of this
Section 11.05 and with Sections 11.01, 11.02(e), (f) and (g), 11.03, 11.04 and 11.06 of this Agreement to the same extent as if such Subservicer were the Servicer, and to provide the information required with respect to such Subservicer
under Section 11.02(f) of this Agreement. The Servicer shall be responsible for obtaining from each Subservicer and delivering to the Depositor any servicer compliance statement required to be delivered by such Subservicer under
Section 11.03, any assessment of compliance and attestation required to be delivered by such Subservicer under Section 11.04 and any certification required 

  

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to be delivered to the Person that will be responsible for signing the Sarbanes Certification under Section 11.04 as and when required to be delivered.

 (c) It shall not be necessary for the Servicer to seek the consent of any Master Servicer or the Depositor to the utilization of any
Subcontractor. The Servicer shall promptly upon request provide to any Master Servicer and the Depositor (or any designee of the Depositor, such as an administrator) a written description (in form and substance satisfactory to the Depositor and such
Master Servicer) of the role and function of each Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the identity of each such Subcontractor, (ii) which (if any) of such Subcontractors are “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB, and (iii) which elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor identified pursuant to clause
(ii) of this paragraph. 
 (d) As a condition to the utilization of any Subcontractor determined to be “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) for the benefit of the Depositor to comply with the provisions of
Section 11.04 and Section 11.06 of this Agreement to the same extent as if such Subcontractor were the Servicer. The Servicer shall be responsible for obtaining from each Subcontractor and delivering to the Depositor any assessment of
compliance and attestation and the other certifications required to be delivered by such Subcontractor under Section 11.04, in each case as and when required to be delivered. 
 Section 11.06. Indemnification; Remedies. 
 (a) The Servicer and the Subservicer shall indemnify the Depositor, each affiliate of the Depositor, and each of the following parties participating in a Securitization Transaction: the Sponsor, the Issuing Entity; each Person (including,
but not limited to, any Master Servicer) responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Securitization Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Securitization Transaction; each broker dealer acting as underwriter, placement agent or initial purchaser, each Person who controls any of such parties or the Depositor
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act); and the respective present and former directors, officers, employees, agents and affiliates of each of the foregoing and of the Depositor (each,
an “Indemnified Party”), and shall hold each of them harmless from and against any claims, losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon: 
 (i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification, data, accountants’ letter or other material provided under this Article XI or Article XII of the Pooling and Servicing Agreement by or on behalf of the Servicer, any
Subservicer, Subcontractor or Third-Party Originator (collectively, the “Servicer Information”), or (B) the omission or alleged omission to state in the Servicer Information a material fact required to be stated in the Servicer
Information or necessary in order to make the statements therein, in the light of the circumstances under which they were made, 

  

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not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by reference to the Servicer Information
and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Servicer Information or any portion thereof is presented together with or separately from such other information;

 (ii) any breach by the Servicer or the Subservicer of its obligations under this Article XI or Article XII of the Pooling
and Servicing Agreement, including particularly any failure by the Servicer, any Subservicer, any Subcontractor or any Third-Party Originator to deliver any information, report, certification, accountants’ letter or other material when and as
required under this Article XI, including any failure by the Servicer to identify pursuant to Sections 11.05(c) or (d) any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB;

 (iii) any breach by the Servicer of a representation or warranty set forth in Section 11.01(a) or in a writing
furnished pursuant to Section 11.01(b) and made as of a date prior to the closing date of the related Securitization Transaction, to the extent that such breach is not cured by such closing date, or any breach by the Servicer of a
representation or warranty in a writing furnished pursuant to Section 11.01(b) to the extent made as of a date subsequent to such closing date; or 
 (iv) the negligence, bad faith or willful misconduct of the Servicer or the Subservicer in connection with its performance under this Article XI or Article XII of the Pooling and Servicing Agreement. 
 If the indemnification provided for herein is unavailable or insufficient to hold harmless an Indemnified Party, then the Servicer agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result of any claims, losses, damages or liabilities incurred by such Indemnified Party in such proportion as is appropriate to reflect the relative fault of such Indemnified
Party on the one hand and the Servicer on the other. 
 In the case of any failure of performance described in clause (a)(ii) of this
Section 11.06, the Servicer shall promptly reimburse the Depositor, and each Person responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Securitization Transaction, for all costs reasonably incurred by each such party in order to obtain the information, report,
certification, accountants’ letter or other material not delivered as required by the Servicer, any Subservicer, any Subcontractor or any Third-Party Originator. 
 This indemnification shall survive the termination of this Agreement and the Pooling and Servicing Agreement, as applicable or the termination of any party to this Agreement and the Pooling and Servicing Agreement, as
applicable. 
 (b) (i) Any failure by the Servicer, any Subservicer, any Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants’ letter or other material when and as required under this Article XI or Article XII of the Pooling and 

  

 41 

 
Servicing Agreement, or any breach by the Servicer of a representation or warranty set forth in Section 11.01(a) or in a writing furnished pursuant to
Section 11.01(b) and made as of a date prior to the closing date of the related Securitization Transaction, to the extent that such breach is not cured by such closing date, or any breach by the Servicer of a representation or warranty in a
writing furnished pursuant to Section 11.01(b) to the extent made as of a date subsequent to such closing date, shall, except as provided in clause (ii) of this paragraph, immediately and automatically, without notice or grace period,
constitute an Event of Default with respect to the Servicer under this Agreement and any applicable Reconstitution Agreement, and shall entitle the Depositor, in its sole discretion to terminate the rights and obligations of the Servicer as servicer
under this Agreement and/or any applicable Reconstitution Agreement without payment (notwithstanding anything in this Agreement or any applicable Reconstitution Agreement to the contrary) of any compensation to the Servicer (and if the Servicer is
servicing any of the Mortgage Loans in a Securitization Transaction, appoint a successor servicer reasonably acceptable to any Master Servicer for such Securitization Transaction); provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly provides for the survival of certain rights or obligations following termination of the Servicer as servicer, such provision shall be given effect. 
 (ii) Any failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification or
accountants’ letter when and as required under Section 11.03 or Section 11.04, including any failure by the Servicer to identify pursuant to Sections 11.05(c) and (d) any Subcontractor “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, after the date on which such information, report, certification or accountants’ letter was required to be delivered shall constitute an Event of Default (notwithstanding any
other provision in this Agreement or any Reconstitution Agreement to the contrary) with respect to the Servicer under this Agreement and any applicable Reconstitution Agreement, and shall entitle any Master Servicer or the Depositor, as applicable,
in its sole discretion to terminate the rights and obligations of the Servicer as servicer under this Agreement and/or any applicable Reconstitution Agreement without payment (notwithstanding anything in this Agreement to the contrary) of any
compensation to the Servicer; provided that to the extent that any provision of this Agreement and/or any applicable Reconstitution Agreement expressly provides for the survival of certain rights or obligations following termination of the
Servicer as servicer, such provision shall be given effect. 
 (iii) The Servicer shall promptly reimburse the Depositor or
any Master Servicer, for all reasonable expenses incurred by the Depositor or such Master Servicer, as such are incurred, in connection with the termination of the Servicer as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit whatever rights the Depositor or any Master Servicer may have under other provisions of this Agreement and/or any applicable Reconstitution Agreement or otherwise, whether in
equity or at law, such as an action for damages, specific performance or injunctive relief. 
 Section 11.07. Intent of the Parties;
Reasonableness. 
 The parties hereto acknowledge that interpretations of the requirements of Regulation AB may change over time, whether
due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel 

  

 42 

 
or otherwise and agree to comply with reasonable requests made by the Depositor (including its assignees or designees) in good faith for delivery of
information under the provisions of this Article XI on the basis of evolving interpretations of Regulation AB. In connection with the Trust, the Securities Administrator, the Master Servicer, the Servicer, the Subservicer and the Trustee shall
cooperate fully with the Depositor (including its assignees or designees) to deliver to the Depositor (including its assignees or designees) any and all statements, reports, certifications, records and any other information readily available to such
party and reasonably necessary in the good-faith determination of the Depositor (including its assignees or designees) to permit the Depositor (including its assignees or designees) to comply with the provisions of Regulation AB. 
 ARTICLE XII 
 MISCELLANEOUS
PROVISIONS 
 Section 12.01. Successor to the Servicer. 
 Upon termination of the Servicer’s responsibilities and duties under this Agreement pursuant to Section 8.04, Section 9.01 or
Section 10.01(ii) hereof, the Master Servicer shall (a) succeed to and assume all of the Servicer’s responsibilities, rights, duties and obligations under this Agreement, or (b) appoint a successor having the characteristics set
forth in Section 8.02 hereof and which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement prior to the termination of the Servicer’s responsibilities, duties and
liabilities under this Agreement. In connection with such appointment and assumption, the Master Servicer may make such arrangements for the compensation of such successor out of payments on Mortgage Loans as the Master Servicer and such successor
shall agree. In the event that the Servicer’s duties, responsibilities and liabilities under this Agreement should be terminated pursuant to the aforementioned sections, the Servicer shall discharge such duties and responsibilities during the
period from the date it acquires knowledge of such termination until the effective date thereof with the same degree of diligence and prudence which it is obligated to exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of its successor. The resignation or removal of the Servicer pursuant to the aforementioned sections shall not become effective until a successor shall be appointed pursuant to this section and
shall in no event relieve the Servicer of the representations and warranties made pursuant to Article III and the remedies available to the Master Servicer under Section 8.01 hereof, it being understood and agreed that the provisions of such
Article III and Section 8.01 hereof shall be applicable to the Servicer notwithstanding any such resignation or termination of the Servicer, or the termination of this Agreement. 
 Any successor appointed as provided herein shall execute, acknowledge and deliver to the Servicer and to the Master Servicer an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the rights, powers, duties, responsibilities, obligations and liabilities of the Servicer, with like effect as if originally named as a party to this Agreement. Any termination
or resignation of the Servicer or termination of this Agreement pursuant to Section 8.04, Section 9.01 or Section 10.01 hereof shall not affect any claims that the Master Servicer, the Issuing Entity or the Trustee may have against
the Servicer arising prior to any such termination or resignation. 
  

 43 

 The Servicer shall promptly deliver to the successor the funds in the Custodial Account and the Escrow
Account and the Servicing Files and related documents and statements held by it hereunder and the Servicer shall account for all funds (except to the extent such items are maintained or in the possession of the Subservicer, and the Subservicer is
not then being terminated). The Servicer shall execute and deliver such instruments and do such other things as may reasonably be required to more fully and definitely vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer. The successor shall make such arrangements as it may deem appropriate to reimburse the Servicer for unrecovered Monthly Advances and Servicing Advances made by the Servicer. 

Upon a successor’s acceptance of appointment as such, the Servicer shall notify the Master Servicer of such appointment. 
 Section 12.02. Amendment. 
 This
Agreement may be amended from time to time by the parties hereto by written agreement signed by the parties hereto. 
 Section 12.03.
Governing Law. 
 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 

Section 12.04. Notices. 
 Any
demands, notices or other communications permitted or required hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, and return receipt requested or
transmitted by telecopier and confirmed by a similar mailed writing, as follows: 
  

	 	(i)	if to the Servicer with respect to servicing issues: 

 EMC
Mortgage Corporation 
 2780 Lake Vista Drive 
 Lewisville, Texas 75067 
 Attn: Jenna Kemp 
 Telecopy No.: (972) 831-2554 
  

	 	(ii)	if to the Master Servicer: 

 Wells Fargo Bank, N.A.

 9062 Old Annapolis Road 
 Columbia, Maryland 21045 
 Attn: PFRMS 2006-1 
 Telecopy No.: (410) 715-2380 
  

 44 

	 	(iii)	if to the Trustee: 

 HSBC Bank USA, National Association,
as Trustee 
 452 Fifth Avenue 
 New York, New York 10018 
 Attn: Corporate Trust & Loan Agency - PFRMS 2006-1 
 Telecopy No. [PLEASE PROVIDE PREFERRED #] 
  

	 	(iv)	if to the Issuing Entity: 

 People’s Financial Realty
Mortgage Securities Trust, Series 2006-1 
 c/o People’s Choice Home Loan Securities Corp. 
 7515 Irvine Center Drive 
 Irvine, California
92618 
 Attention: General Counsel 
 Telecopy No. [PLEASE PROVIDE PREFERRED #] 
 or such other address as may hereafter be furnished to the other party by like notice. Any such
demand, notice, or communication hereunder shall be deemed to have been received on the date delivered to or received at the premises of the address (as evidenced, in the case of registered or certified mail, by the date noted on the return
receipt). 
 Section 12.05. Severability of Provisions. 
 If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be held invalid for any reason whatsoever, 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. 
 Section 12.06. Exhibits and Schedules. 
 The exhibits, schedules and other addenda and supplements to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. 
 Section 12.07. General Interpretive Principles. 
 For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: 
 (a) the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender; 
 (b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;

  

 45 

 (c) references herein to “Articles,” “Sections,” “Subsections,”
“Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement; 
 (d) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other subdivisions; 
 (e) the words “herein,”
“hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and 
 (f) the term “include” or “including” shall mean without limitation by reason of enumeration. 
 Section 12.08. Reproduction of Documents. 
 This Agreement and all documents relating hereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed, (b) documents received by any party at the closing, and (c) financial statements, certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. 
 Section 12.09. Confidentiality of Information. 
 Each party recognizes that, in connection with this Agreement, it may become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Except as required to be disclosed by law, each party agrees to keep all non-public information regarding the other party strictly confidential, and to use all such information solely in order to
effectuate the purpose of this Agreement. 
 Section 12.10. No Partnership. 
 Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture between the parties hereto and the services of the
Servicer and the Subservicer shall be rendered as an independent contractor and not as agent for Master Servicer, the Issuing Entity or the Trustee. 
 Section 12.11. Counterparts; Successors and Assigns. 
 This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement. Subject to Section 8.05,
this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. 
  

 46 

 Section 12.12. Entire Agreement. 
 Each of the parties hereto acknowledges that no representations, agreements or promises were made to it by the other party or any of its employees other
than those representations, agreements or promises specifically contained herein. This Agreement sets forth the entire understanding among the parties hereto with respect to the matters set forth herein, and shall be binding upon all successors of
both parties. 
 Section 12.13. Further Agreements. 
 Each of the parties hereto agrees to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purpose of
this Agreement. 
 {Signature page follows.} 
  

 47 

 IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the date and year first above written. 
  

			
	 EMC MORTGAGE CORPORATION, as Servicer

		
	By:	 	 /s/ Sue Stepanek

	 Name:
	 	 Sue Stepanek

	 Title:
	 	 Executive Vice President

	
	 WELLS FARGO BANK, N.A., as Master Servicer

		
	By:	 	 /s/ Peter Gobell

	 Name:
	 	 Peter Gobell

	 Title:
	 	 Vice President

	
	PEOPLE’S CHOICE HOME LOAN, INC., as Subservicer
		
	By:	 	 /s/ Brad Plantiko

	 Name:
	 	 Brad Plantiko

	 Title:
	 	 Executive Vice President

		
	By:	 	 /s/ Irwin Gubman

	 Name:
	 	 Irwin Gubman

	 Title:
	 	 Secretary and General Counsel

	
	HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee
		
	By:	 	 /s/ Elena Zheng

	 Name:
	 	 Elena Zheng

	 Title:
	 	 Assistant Vice President

 {Signature Page to PFRMS 2006-1 Servicing Agreement} 

 EXHIBIT A 
 MORTGAGE LOAN SCHEDULE 
 Available Upon Request 
  

 A-1 

 EXHIBIT B 
 FORMS OF CUSTODIAL ACCOUNT CERTIFICATIONS 
 CUSTODIAL ACCOUNT CERTIFICATION 
                     ,
20         
 People’s Choice Home Loan, Inc. hereby certifies that it or its subservicer
has established the account described below as a Custodial Account pursuant to Section 4.04 of the Servicing Agreement, dated as of July 1, 2006. 
  

	Title of Account:	People Choice Financial Corporation - Custodial Account in trust for 

	    	People’s Financial Realty Mortgage Securities Trust, Series 2006-1 - P & I 

 Address of office or branch 
 of the Servicer at which 
 Account is maintained: 
  

			
	PEOPLE’S CHOICE HOME LOAN, INC., Subservicer
		
	 By:
	 	  
	 Name:
	 	
	 Title:
	 	

  

 B-1 

 EXHIBIT C 
 FORMS OF ESCROW ACCOUNT CERTIFICATIONS 
 ESCROW ACCOUNT CERTIFICATION 
                     ,
20         
 People’s Choice Home Loan, Inc. hereby certifies that it or its subservicer
has established the account described below as an Escrow Account pursuant to Section 4.06 of the Servicing Agreement, dated as of July 1, 2006. 
  

	Title of Account:	People’s Choice Financial Corporation - Escrow Account in trust for 

	    	People’s Financial Realty Mortgage Securities Trust, Series 2006-1 -T & I 

 Address of office or branch 
 of the Servicer at which 
 Account is maintained: 
  

			
	PEOPLE’S CHOICE HOME LOAN, INC., Subservicer
		
	 By:
	 	  
	 Name:
	 	
	 Title:
	 	

  

 C-1 

 EXHIBIT D 
 FORM OF REQUEST FOR RELEASE BY CUSTODIAN 
 Wells Fargo Bank, N.A. (the “Custodian”) 
 24 Executive Park Drive, Suite 100 
 Irvine,
California 92614 
 Attn.: PFRMS 2006-1 
  

	RE:	Pooling and Servicing Agreement, dated as of July 1, 2006 (the “Pooling and Servicing Agreement”), among People’s Financial Realty Mortgage Securities Trust,
Series 2006-1, as Issuing Entity, People’s Choice Home Loan Securities Corp., as Depositor, HSBC Bank USA, National Association, as Trustee, Wells Fargo Bank, N.A., as Securities Administrator and Master Servicer, EMC Mortgage Corporation, as
Servicer, People’s Choice Home Loan, Inc., as Subservicer and People’s Choice Home Loan, Inc., as Seller. 

 In
connection with the administration of the Mortgage Loans held by the Custodian for the benefit of the Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we request the release, and hereby acknowledge receipt, of the Mortgage
File for the Mortgage Loan described below, for the reason indicated. 
 This release will not invalidate any insurance coverage provided in
respect of the Mortgage Loan under any of the Insurance Policies. 
 Mortgage Loan Number: 
 Mortgagor Name, Address & Zip Code: 
 Reason for Requesting Documents (check one): 
  

					
	 ̈	 	1.	  	Mortgage Paid in Full and proceeds have been deposited into the Payment Account
			
	 ̈	 	2.	  	Foreclosure
			
	 ̈	 	3.	  	Substitution
			
	 ̈	 	4.	  	Other Liquidation
			
	 ̈	 	5.	  	Nonliquidation                                    
                                        
                 Reason: ____________________________________
			
	 ̈	 	6.	  	California Mortgage Loan paid in full

  

 D-1 

			
	 SERVICER OR SUBSERVICER

		
	 By:
	 	  
		 	(authorized signer)

			
	 Issuing Entity:
	 	  

			
	 Address:
	 	  

			
	 Date:
	 	  

  

 2 

 EXHIBIT E 
 Calculation of Realized Loss/Gain Form 332– Instruction Sheet 
 NOTE: Do not net or combine items. Show all expenses
individually and all credits as separate line items. Claim packages are due on the remittance report date. Late submissions may result in claims not being passed until the following month. The Servicer is responsible to remit all funds pending loss
approval and /or resolution of any disputed items. 
 The numbers on the 332 form correspond with the numbers listed below. 
 Liquidation and Acquisition Expenses: 
  

	 	1.	The Actual Unpaid Principal Balance of the Mortgage Loan. For documentation, an Amortization Schedule from date of default through liquidation breaking out the net interest and
servicing fees advanced is required. 

  

	 	2.	The Total Interest Due less the aggregate amount of servicing fee that would have been earned if all delinquent payments had been made as agreed. For documentation, an Amortization
Schedule from date of default through liquidation breaking out the net interest and servicing fees advanced is required. 

  

	 	3.	Accrued Servicing Fees based upon the Stated Principal Balance of the Mortgage Loan as calculated on a monthly basis. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and servicing fees advanced is required. 

 4-12.     Complete as applicable. Required documentation: 
  

	 	*	For taxes and insurance advances – see page 2 of 332 form - breakdown required showing period of coverage, base tax, interest, penalty. Advances prior to default require
evidence of servicer efforts to recover advances. 

  

	 	*	For escrow advances - complete payment history 

 (to
calculate advances from last positive escrow balance forward) 
  

	 	*	Other expenses - copies of corporate advance history showing all payments 

  

	 	*	REO repairs > $1500 require explanation 

  

	 	*	REO repairs >$3000 require evidence of at least 2 bids. 

  

	 	*	Short Sale or Charge Off require P&L supporting the decision and WFB’s approved Officer Certificate 

  

	 	*	Unusual or extraordinary items may require further documentation. 

  

 E-1 

	 	13.	The total of lines 1 through 12. 

  

	 	(a)	Credits: 

 14-21.    
Complete as applicable. Required documentation: 
  

	 	*	Copy of the HUD 1 from the REO sale. If a 3rd
Party Sale, bid instructions and Escrow Agent / Attorney 

 Letter of Proceeds Breakdown. 
  

	 	*	Copy of EOB for any MI or gov’t guarantee 

  

	 	*	All other credits need to be clearly defined on the 332 form

  

	 	22.	The total of lines 14 through 21. 

 Please Note:
    For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for Part B/Supplemental proceeds. 
 Total Realized Loss (or Amount of Any Gain) 
  

	 	23.	The total derived from subtracting line 22 from 13. If the amount represents a realized gain, show the amount in parenthesis (    ). 

  

 2 

 Calculation of Realized Loss/Gain Form 332 
  

			
	Prepared by: _______________________________	  	Date: ___________________________________
	Phone: ___________________________________	  	Email Address: ___________________________

  

									
	Servicer Loan No.	 		 	Servicer Name	  		 	Servicer Address
	  	 		 	  	  		 	  
	  	 		 	  	  		 	  

 WELLS FARGO BANK, N.A. Loan
No.                                       
                                        
                          
 Borrower’s Name:
                                        
                                        
                                        
                       
 Property Address:
                                        
                                        
                                        
                       
  

							
	Liquidation Type: REO Sale	  	3rd Party Sale    	  	Short Sale    	  	Charge Off
				
	Was this loan granted a Bankruptcy deficiency or cramdown	  		  	Yes	  	No
	 If “Yes”, provide deficiency or cramdown amount
                                        
                                        
        

  

						
	Liquidation and Acquisition Expenses:	  			  	
	 (1)    Actual Unpaid Principal Balance of Mortgage Loan
	  	$	______________	  	(1)
	 (2)    Interest accrued at Net Rate
	  	 	______________	  	(2)
	 (3)    Accrued Servicing Fees
	  	 	______________	  	(3)
	 (4)    Attorney’s Fees
	  	 	______________	  	(4)
	 (5)    Taxes (see page 2)
	  	 	______________	  	(5)
	 (6)    Property Maintenance
	  	 	______________	  	(6)
	 (7)    MI/Hazard Insurance Premiums (see page 2)
	  	 	______________	  	(7)
	 (8)    Utility Expenses
	  	 	______________	  	(8)
	 (9)    Appraisal/BPO
	  	 	______________	  	(9)
	 (10)  Property Inspections
	  	 	______________	  	(10)
	 (11)  FC Costs/Other Legal Expenses
	  	 	______________	  	(11)
	 (12)  Other (itemize)
	  	 	______________	  	(12)
	 Cash for Keys
                                        
                                        
          
	  	 	______________	  	(12)
	 HOA/Condo Fees
                                        
                                        
    
	  	 	______________	  	(12)
	 _________________________________________________________
	  	 	______________	  	(12)
	 Total Expenses
	  	$	______________	  	(13)
	 Credits:
	  			  	
	 (14)  Escrow Balance
	  	$	______________	  	(14)
	 (15)  HIP Refund
	  	 	______________	  	(15)
	 (16)  Rental Receipts
	  	 	______________	  	(16)
	 (17)  Hazard Loss Proceeds
	  	 	______________	  	(17)
	 (18)  Primary Mortgage Insurance / Gov’t Insurance
	  	 	______________	  	(18a) HUD Part A
		  	 	______________	  	(18b) HUD Part B
	 (19)  Pool Insurance Proceeds
	  	 	______________	  	(19)
	 (20)  Proceeds from Sale of Acquired Property
	  	 	______________	  	(20)
	 (21)  Other (itemize)
	  	 	______________	  	(21)
	          _________________________________
	  	 	______________	  	(21)
	 Total Credits
	  	$	______________	  	(22)
	Total Realized Loss (or Amount of Gain)	  	$	______________	  	(23)

  

 3 

 Escrow Disbursement Detail 
  

													
	 Type
 (Tax /Ins.)
	  	Date Paid	  	Period of Coverage	  	Total Paid	  	Base Amount	  	Penalties	  	Interest
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	
		  		  		  		  		  		  	

  

 4 

 EXHIBIT F 
 Standard File Layout - Master Servicing 
  

									
	 Column Name
	  	 Description
	  	Decimal	  	 Format Comment
	  	Max Size
	SER_INVESTOR_NBR	  	A value assigned by the Servicer to define a group of loans.	  		  	Text up to 10 digits	  	20
					
	LOAN_NBR	  	A unique identifier assigned to each loan by the investor.	  		  	Text up to 10 digits	  	10
					
	SERVICER_LOAN_NBR	  	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR.	  		  	Text up to 10 digits	  	10
					
	BORROWER_NAME	  	The borrower name as received in the file. It is not separated by first and last name.	  		  	Maximum length of 30 (Last, First)	  	30
					
	SCHED_PAY_AMT	  	Scheduled monthly principal and scheduled interest payment that a borrower is expected to pay, P&I constant.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	NOTE_INT_RATE	  	The loan interest rate as reported by the Servicer.	  	4	  	Max length of 6	  	6
					
	NET_INT_RATE	  	The loan gross interest rate less the service fee rate as reported by the Servicer.	  	4	  	Max length of 6	  	6
					
	SERV_FEE_RATE	  	The servicer’s fee rate for a loan as reported by the Servicer.	  	4	  	Max length of 6	  	6
					
	SERV_FEE_AMT	  	The servicer’s fee amount for a loan as reported by the Servicer.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	NEW_PAY_AMT	  	The new loan payment amount as reported by the Servicer.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	NEW_LOAN_RATE	  	The new loan rate as reported by the Servicer.	  	4	  	Max length of 6	  	6
					
	ARM_INDEX_RATE	  	The index the Servicer is using to calculate a forecasted rate.	  	4	  	Max length of 6	  	6
					
	ACTL_BEG_PRIN_BAL	  	The borrower’s actual principal balance at the beginning of the processing cycle.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	ACTL_END_PRIN_BAL	  	The borrower’s actual principal balance at the end of the processing cycle.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	BORR_NEXT_PAY_DUE_DATE	  	The date at the end of processing cycle that the borrower’s next payment is due to the Servicer, as reported by Servicer.	  		  	MM/DD/YYYY	  	10
					
	SERV_CURT_AMT_1	  	The first curtailment amount to be applied.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SERV_CURT_DATE_1	  	The curtailment date associated with the first curtailment amount.	  		  	MM/DD/YYYY	  	10
					
	CURT_ADJ_ AMT_1	  	The curtailment interest on the first curtailment amount, if applicable.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SERV_CURT_AMT_2	  	The second curtailment amount to be applied.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SERV_CURT_DATE_2	  	The curtailment date associated with the second curtailment amount.	  		  	MM/DD/YYYY	  	10
					
	CURT_ADJ_ AMT_2	  	The curtailment interest on the second curtailment amount, if applicable.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SERV_CURT_AMT_3	  	The third curtailment amount to be applied.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SERV_CURT_DATE_3	  	The curtailment date associated with the third curtailment amount.	  		  	MM/DD/YYYY	  	10
					
	CURT_ADJ_AMT_3	  	The curtailment interest on the third curtailment amount, if applicable.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	PIF_AMT	  	The loan “paid in full” amount as reported by the Servicer.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	PIF_DATE	  	The paid in full date as reported by the Servicer.	  		  	MM/DD/YYYY	  	10

  

 F-1 

									
	ACTION_CODE	  	The standard FNMA numeric code used to indicate the default/delinquent status of a particular loan.	  		  	 Action Code Key: 15=Bankruptcy, 30=Foreclosure,
 60=PIF, 63=Substitution, 65=Repurchase,70=REO
	  	2
					
	INT_ADJ_AMT	  	The amount of the interest adjustment as reported by the Servicer.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SOLDIER_SAILOR_ADJ_AMT	  	The Soldier and Sailor Adjustment amount, if applicable.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	NON_ADV_LOAN_AMT	  	The Non Recoverable Loan Amount, if applicable.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	LOAN_LOSS_AMT	  	The amount the Servicer is passing as a loss, if applicable.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SCHED_BEG_PRIN_BAL	  	The scheduled outstanding principal amount due at the beginning of the cycle date to be passed through to investors.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SCHED_END_PRIN_BAL	  	The scheduled principal balance due to investors at the end of a processing cycle.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SCHED_PRIN_AMT	  	The scheduled principal amount as reported by the Servicer for the current cycle — only applicable for Scheduled/Scheduled Loans.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	SCHED_NET_INT	  	The scheduled gross interest amount less the service fee amount for the current cycle as reported by the Servicer — only applicable for Scheduled/Scheduled Loans.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	ACTL_PRIN_AMT	  	The actual principal amount collected by the Servicer for the current reporting cycle — only applicable for Actual/Actual Loans.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	ACTL_NET_INT	  	The actual gross interest amount less the service fee amount for the current reporting cycle as reported by the Servicer — only applicable for Actual/Actual Loans.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	PREPAY_PENALTY_ AMT	  	The penalty amount received when a borrower prepays on his loan as reported by the Servicer.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	PREPAY_PENALTY_ WAIVED	  	The prepayment penalty amount for the loan waived by the servicer.	  	2	  	No commas(,) or dollar signs ($)	  	11
					
	MOD_DATE	  	The Effective Distribution Date of the Modification for the loan.	  		  	MM/DD/YYYY	  	10
					
	MOD_TYPE	  	The Modification Type.	  		  	Varchar - value can be alpha or numeric	  	30
					
	DELINQ_P&I_ADVANCE_AMT	  	The current outstanding principal and interest advances made by Servicer.	  	2	  	No commas(,) or dollar signs ($)	  	11

  

 2 

 EXHIBIT G 
 Standard File Layout – Delinquency Reporting 
  

							
	 Column/Header Name
	  	 Description
	  	Decimal	  	 Format Comment

	SERVICER_LOAN_NBR	  	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR	  		  	
				
	LOAN_NBR	  	A unique identifier assigned to each loan by the originator.	  		  	
				
	CLIENT_NBR	  	Servicer Client Number	  		  	
				
	SERV_INVESTOR_NBR	  	Contains a unique number as assigned by an external servicer to identify a group of loans in their system.	  		  	
				
	BORROWER_FIRST_NAME	  	First Name of the Borrower.	  		  	
				
	BORROWER_LAST_NAME	  	Last name of the borrower.	  		  	
				
	PROP_ADDRESS	  	Street Name and Number of Property	  		  	
				
	PROP_STATE	  	The state where the property located.	  		  	
				
	PROP_ZIP	  	Zip code where the property is located.	  		  	
				
	BORR_NEXT_PAY_DUE_DATE	  	The date that the borrower’s next payment is due to the servicer at the end of processing cycle, as reported by Servicer.	  		  	MM/DD/YYYY
				
	LOAN_TYPE	  	Loan Type (i.e. FHA, VA, Conv)	  		  	
				
	BANKRUPTCY_FILED_DATE	  	The date a particular bankruptcy claim was filed.	  		  	MM/DD/YYYY
				
	BANKRUPTCY_CHAPTER_CODE	  	The chapter under which the bankruptcy was filed.	  		  	
				
	BANKRUPTCY_CASE_NBR	  	The case number assigned by the court to the bankruptcy filing.	  		  	
				
	POST_PETITION_DUE_DATE	  	The payment due date once the bankruptcy has been approved by the courts	  		  	MM/DD/YYYY
				
	BANKRUPTCY_DCHRG_DISM_DATE	  	The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged and/or a Motion For Relief Was Granted.	  		  	MM/DD/YYYY
				
	LOSS_MIT_APPR_DATE	  	The Date The Loss Mitigation Was Approved By The Servicer	  		  	MM/DD/YYYY
				
	LOSS_MIT_TYPE	  	The Type Of Loss Mitigation Approved For A Loan Such As;	  		  	
				
	LOSS_MIT_EST_COMP_DATE	  	The Date The Loss Mitigation /Plan Is Scheduled To End/Close	  		  	MM/DD/YYYY
				
	LOSS_MIT_ACT_COMP_DATE	  	The Date The Loss Mitigation Is Actually Completed	  		  	MM/DD/YYYY
				
	FRCLSR_APPROVED_DATE	  	The date DA Admin sends a letter to the servicer with instructions to begin foreclosure proceedings.	  		  	MM/DD/YYYY
				
	ATTORNEY_REFERRAL_DATE	  	Date File Was Referred To Attorney to Pursue Foreclosure	  		  	MM/DD/YYYY
				
	FIRST_LEGAL_DATE	  	Notice of 1st legal filed by an Attorney in a Foreclosure Action	  		  	MM/DD/YYYY
				
	FRCLSR_SALE_EXPECTED_DATE	  	The date by which a foreclosure sale is expected to occur.	  		  	MM/DD/YYYY
				
	FRCLSR_SALE_DATE	  	The actual date of the foreclosure sale.	  		  	MM/DD/YYYY
				
	FRCLSR_SALE_AMT	  	The amount a property sold for at the foreclosure sale.	  	2	  	No commas(,) or dollar signs ($)
				
	EVICTION_START_DATE	  	The date the servicer initiates eviction of the borrower.	  		  	MM/DD/YYYY
				
	EVICTION_COMPLETED_DATE	  	The date the court revokes legal possession of the property from the borrower.	  		  	MM/DD/YYYY
				
	LIST_PRICE	  	The price at which an REO property is marketed.	  	2	  	No commas(,) or dollar signs ($)
				
	LIST_DATE	  	The date an REO property is listed at a particular price.	  		  	MM/DD/YYYY
				
	OFFER_AMT	  	The dollar value of an offer for an REO property.	  	2	  	No commas(,) or dollar signs ($)
				
	OFFER_DATE_TIME	  	The date an offer is received by DA Admin or by the Servicer.	  		  	MM/DD/YYYY
				
	REO_CLOSING_DATE	  	The date the REO sale of the property is scheduled to close.	  		  	MM/DD/YYYY
				
	REO_ACTUAL_CLOSING_DATE	  	Actual Date Of REO Sale	  		  	MM/DD/YYYY

  

 G-1 

							
	OCCUPANT_CODE	  	Classification of how the property is occupied.	  		  	
				
	PROP_CONDITION_CODE	  	A code that indicates the condition of the property.	  		  	
				
	PROP_INSPECTION_DATE	  	The date a property inspection is performed.	  		  	MM/DD/YYYY
				
	APPRAISAL_DATE	  	The date the appraisal was done.	  		  	MM/DD/YYYY
				
	CURR_PROP_VAL	  	The current “as is” value of the property based on brokers price opinion or appraisal.	  	2	  	
				
	REPAIRED_PROP_VAL	  	The amount the property would be worth if repairs are completed pursuant to a broker’s price opinion or appraisal.	  	2	  	
				
	If applicable:	  		  		  	
				
	DELINQ_STATUS_CODE	  	FNMA Code Describing Status of Loan	  		  	
				
	DELINQ_REASON_CODE	  	The circumstances which caused a borrower to stop paying on a loan. Code indicates the reason why the loan is in default for this cycle.	  		  	
				
	MI_CLAIM_FILED_DATE	  	Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.	  		  	MM/DD/YYYY
				
	MI_CLAIM_AMT	  	Amount of Mortgage Insurance Claim Filed	  		  	No commas(,) or dollar signs ($)
				
	MI_CLAIM_PAID_DATE	  	Date Mortgage Insurance Company Disbursed Claim Payment	  		  	MM/DD/YYYY
				
	MI_CLAIM_AMT_PAID	  	Amount Mortgage Insurance Company Paid On Claim	  	2	  	No commas(,) or dollar signs ($)
				
	POOL_CLAIM_FILED_DATE	  	Date Claim Was Filed With Pool Insurance Company	  		  	MM/DD/YYYY
				
	POOL_CLAIM_AMT	  	Amount of Claim Filed With Pool Insurance Company	  	2	  	No commas(,) or dollar signs ($)
				
	POOL_CLAIM_PAID_DATE	  	Date Claim Was Settled and The Check Was Issued By The Pool Insurer	  		  	MM/DD/YYYY
				
	POOL_CLAIM_AMT_PAID	  	Amount Paid On Claim By Pool Insurance Company	  	2	  	No commas(,) or dollar signs ($)
				
	FHA_PART_A_CLAIM_FILED_DATE	  	Date FHA Part A Claim Was Filed With HUD	  		  	MM/DD/YYYY
				
	FHA_PART_A_CLAIM_AMT	  	Amount of FHA Part A Claim Filed	  	2	  	No commas(,) or dollar signs ($)
				
	FHA_PART_A_CLAIM_PAID_DATE	  	Date HUD Disbursed Part A Claim Payment	  		  	MM/DD/YYYY
				
	FHA_PART_A_CLAIM_PAID_AMT	  	Amount HUD Paid on Part A Claim	  	2	  	No commas(,) or dollar signs ($)
				
	FHA_PART_B_CLAIM_FILED_DATE	  	Date FHA Part B Claim Was Filed With HUD	  		  	MM/DD/YYYY
				
	FHA_PART_B_CLAIM_AMT	  	Amount of FHA Part B Claim Filed	  	2	  	No commas(,) or dollar signs ($)
				
	FHA_PART_B_CLAIM_PAID_DATE	  	Date HUD Disbursed Part B Claim Payment	  		  	MM/DD/YYYY
				
	FHA_PART_B_CLAIM_PAID_AMT	  	Amount HUD Paid on Part B Claim	  	2	  	No commas(,) or dollar signs ($)
				
	VA_CLAIM_FILED_DATE	  	Date VA Claim Was Filed With the Veterans Admin	  		  	MM/DD/YYYY
				
	VA_CLAIM_PAID_DATE	  	Date Veterans Admin. Disbursed VA Claim Payment	  		  	MM/DD/YYYY
				
	VA_CLAIM_PAID_AMT	  	Amount Veterans Admin. Paid on VA Claim	  	2	  	No commas(,) or dollar signs ($)

 Exhibit 2: Standard File Codes – Delinquency Reporting 
 The Loss Mit Type field should show the approved Loss Mitigation Code as follows: 
  

	 	•	 	ASUM- Approved Assumption 

  

	 	•	 	BAP- Borrower Assistance Program 

  

	 	•	 	CO- Charge Off 

  

 G-2 

	 	•	 	DIL- Deed-in-Lieu 

  

	 	•	 	FFA- Formal Forbearance Agreement 

  

	 	•	 	MOD- Loan Modification 

  

	 	•	 	PRE- Pre-Sale 

  

	 	•	 	SS- Short Sale 

  

	 	•	 	MISC- Anything else approved by the PMI or Pool Insurer 

 NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those above, provided that they are consistent with industry standards. If Loss Mitigation Types other than those above are used, the Servicer must supply
Wells Fargo Bank with a description of each of the Loss Mitigation Types prior to sending the file. 
 The Occupant
Code field should show the current status of the property code as follows: 
  

	 	•	 	Mortgagor 

  

	 	•	 	Tenant 

  

	 	•	 	Unknown 

  

	 	•	 	Vacant 

 The Property Condition field should show the last
reported condition of the property as follows: 
  

	 	•	 	Damaged 

  

	 	•	 	Excellent 

  

	 	•	 	Fair 

  

	 	•	 	Gone 

  

	 	•	 	Good 

  

	 	•	 	Poor 

  

	 	•	 	Special Hazard 

  

	 	•	 	Unknown 

  

 G-3 

 Exhibit 2: Standard File Codes – Delinquency Reporting, Continued 
 The FNMA Delinquent Reason Code field should show the Reason for Delinquency as follows: 
  

			
	 Delinquency
Code
	  	 Delinquency Description

	001	  	FNMA-Death of principal mortgagor
	002	  	FNMA-Illness of principal mortgagor
	003	  	FNMA-Illness of mortgagor’s family member
	004	  	FNMA-Death of mortgagor’s family member
	005	  	FNMA-Marital difficulties
	006	  	FNMA-Curtailment of income
	007	  	FNMA-Excessive Obligation
	008	  	FNMA-Abandonment of property
	009	  	FNMA-Distant employee transfer
	011	  	FNMA-Property problem
	012	  	FNMA-Inability to sell property
	013	  	FNMA-Inability to rent property
	014	  	FNMA-Military Service
	015	  	FNMA-Other
	016	  	FNMA-Unemployment
	017	  	FNMA-Business failure
	019	  	FNMA-Casualty loss
	022	  	FNMA-Energy environment costs
	023	  	FNMA-Servicing problems
	026	  	FNMA-Payment adjustment
	027	  	FNMA-Payment dispute
	029	  	FNMA-Transfer of ownership pending
	030	  	FNMA-Fraud
	031	  	FNMA-Unable to contact borrower
	INC	  	FNMA-Incarceration

  

 G-4 

 Exhibit 2: Standard File Codes – Delinquency Reporting, Continued 
 The FNMA Delinquent Status Code field should show the Status of Default as follows: 
  

			
	 Status Code
	  	 Status Description

	09	  	Forbearance
	17	  	Pre-foreclosure Sale Closing Plan Accepted
	24	  	Government Seizure
	26	  	Refinance
	27	  	Assumption
	28	  	Modification
	29	  	Charge-Off
	30	  	Third Party Sale
	31	  	Probate
	32	  	Military Indulgence
	43	  	Foreclosure Started
	44	  	Deed-in-Lieu Started
	49	  	Assignment Completed
	61	  	Second Lien Considerations
	62	  	Veteran’s Affairs-No Bid
	63	  	Veteran’s Affairs-Refund
	64	  	Veteran’s Affairs-Buydown
	65	  	Chapter 7 Bankruptcy
	66	  	Chapter 11 Bankruptcy
	67	  	Chapter 13 Bankruptcy

  

 G-5 

 EXHIBIT H 
 FORM OF POWER OF ATTORNEY 
 LIMITED POWER OF ATTORNEY 
 HSBC Bank USA, National Association, a national banking association having its principal place of business in [     ],
[     ], in its capacity as trustee with respect to the People’s Financial Realty Mortgage Securities Trust, Series 2006-1, Mortgage-Backed Certificates, Series 2006-1 (hereinafter called the “Trustee”)
hereby appoints People’s Choice Home Loan, Inc. (hereinafter called “PCHLI”), as its true and lawful attorney-in-fact to act in the name, place and stead of the Trustee for the purposes set forth below. 
 The said attorneys-in-fact, and each of them, are hereby authorized, and empowered, as follows: 
  

	1.	To execute, acknowledge, seal and deliver deed of trust/mortgage note endorsements, lost note affidavits, assignments of deed of trust/mortgage and other recorded documents,
satisfactions/releases/reconveyances of deed of trust/mortgage, subordinations and modifications, tax authority notifications and declarations, deeds, bills of sale, and other instruments of sale, conveyance, and transfer, appropriately completed,
with all ordinary or necessary endorsements, acknowledgments, affidavits, and supporting documents as may be necessary or appropriate to effect its execution, delivery, conveyance, recordation or filing. 

  

	2.	To execute and deliver insurance filings and claims, affidavits of debt, substitutions of trustee, substitutions of counsel, non-military affidavits, notices of rescission,
foreclosure deeds, transfer tax affidavits, affidavits of merit, verifications of complaints, notices to quit, bankruptcy declarations for the purpose of filing motions to lift stays, and other documents or notice filings on behalf of the Trustee in
connection with insurance, foreclosure, bankruptcy and eviction actions. 

  

	3.	To pursue any deficiency, debt or other obligation, secured or unsecured, including but not limited to those arising from foreclosure or other sale, promissory note or check. This
power also authorizes PCHLI to collect, negotiate or otherwise settle any deficiency claim, including interest and attorney’s fees. 

  

	4.	To do any other act or complete any other document that arises in the normal course of servicing of all Mortgage Loans and REO Properties, as defined in, and subject to the terms of
(a) the Pooling and Servicing Agreement, dated as of July 1, 2006, among People’s Choice Home Loan Securities Corp., as depositor (the “Depositor”), People’s Financial Realty Mortgage Securities Trust, Series 2006-1, as
the Issuing Entity (the “Issuing Entity”), the Trustee, Wells Fargo Bank, N.A., as master servicer and securities administrator, EMC Mortgage Corporation, as servicer (the “Servicer”), and PCHLI, as subservicer, and (b) the
Servicing Agreement, dated as of July 1, 2006, among the Servicer, Wells Fargo Bank, N.A., as master servicer, PCHLI, as subservicer, the Issuing Entity and the Trustee. 

  

 H-1 

 Dated:
                    , 200        . 
  

					
	 Witness:
	 		 	
			
	   	 		 	   
	 Name:
	 		 	 Name:

		 		 	 Title: ___________________________________________

	  	 		 	
	 Name:
	 		 	

  

 H-2 

					
	State of	  	                                      
  )	 	
		  	                                       
         :	 	ss
	County of	  	                                      
  )	 	

 BEFORE ME,
                                        
                    , a Notary Public in and for the jurisdiction aforesaid, on this
                     day of
                                    , personally appeared
                                        
                                        
                         who resides at
                                        
                                        
                         and who is personally known to me (or sufficiently proven) to be a
                                        
                     of
                                        
                             and the person who executed the foregoing instrument by virtue of the
authority vested in him/her and he/she did acknowledge the signing of the foregoing instrument to be his/her free and voluntary act and deed as a
                                        
                         for the uses, purposes and consideration therein set forth. 
 Witness my hand and official seal this                     
day of                     , 200__. 
  

					
	 	 		 	  
	 	 		 	 
	 	 		 	 NOTARY STAMP

	 	 		 	  
	 	 		 	  
			 
	 My Commission Expires:
                                        
                
	 		 	   
	 	 		 	 

  

 H-3 

 EXHIBIT I 
 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE 
 The assessment of compliance to be
delivered by [the Servicer] [the Subservicer] shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”: 
  

							
	 Servicing
Criteria
	  	Subservicer1	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
		  	General Servicing Considerations	  		  	
				
	1122(d)(1)(i)	  	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	  	X	  	X
				
	1122(d)(1)(ii)	  	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing
activities.	  		  	X
				
	1122(d)(1)(iii)	  	Any requirements in the transaction agreements to maintain a back-up servicer for the mortgage loans are maintained.	  		  	
				
	1122(d)(1)(iv)	  	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction agreements.	  	X	  	X
				
		  	Cash Collection and Administration	  		  	
				
	1122(d)(2)(i)	  	Payments on mortgage loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two (2) business days following receipt, or such other
number of days specified in the transaction agreements.	  	X	  	
				
	1122(d)(2)(ii)	  	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	  	X	  	
				
	1122(d)(2)(iii)	  	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the
transaction agreements.	  	X	  	
				
	1122(d)(2)(iv)	  	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling
of cash) as set forth in the transaction agreements.	  	X	  	

	1	For line items not also marked as Servicer obligations, so long as the Subservicer remains People’s Choice Home Loan, Inc. (“PCHLI”), the Subservicer
shall provide the information required thereby. If PCHLI should be removed from its role as Subservicer, then the Servicer shall become responsible for such line items, unless and until it shall appoint a successor subservicer who agrees to provide
such information. 

  

 I-1 

							
	 Servicing
Criteria
	  	Subservicer1	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
				
	1122(d)(2)(v)	  	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured
depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	  	X	  	
				
	1122(d)(2)(vi)	  	Unissued checks are safeguarded so as to prevent unauthorized access.	  	X	  	
				
	1122(d)(2)(vii)	  	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared
the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	  	X	  	
				
		  	Investor Remittances and Reporting	  		  	
				
	1122(d)(3)(i)	  	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such
reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the
Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of mortgage loans serviced by the Servicer.	  	X	  	
				
	1122(d)(3)(ii)	  	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	  	X	  	
				
	1122(d)(3)(iii)	  	Disbursements made to an investor are posted within two (2) business days to the Servicer’s investor records, or such other number of days specified in the transaction
agreements.	  	X	  	
				
	1122(d)(3)(iv)	  	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	  	X	  	
				
		  	Pool Asset Administration	  		  	
				
	1122(d)(4)(i)	  	Collateral or security on mortgage loans is maintained as required by the transaction agreements or related mortgage loan documents.	  	X	  	
				
	1122(d)(4)(ii)	  	Mortgage loan and related documents are safeguarded as required by the transaction agreements.	  	X	  	
				
	1122(d)(4)(iii)	  	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	  	X	  	

  

 I-2 

							
	 Servicing
Criteria
	  	Subservicer1	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
	1122(d)(4)(iv)	  	Payments on mortgage loans, including any payoffs, made in accordance with the related mortgage loan documents are posted to the Servicer’s obligor records maintained no more than two
(2) business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan documents.	  	X	  	
				
	1122(d)(4)(v)	  	The Servicer’s records regarding the mortgage loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	  	X	  	
				
	1122(d)(4)(vi)	  	Changes with respect to the terms or status of an obligor’s mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance
with the transaction agreements and related pool asset documents.	  	X	  	
				
	1122(d)(4)(vii)	  	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements established by the transaction agreements.	  	X	  	
				
	1122(d)(4)(viii)	  	Records documenting collection efforts are maintained during the period a mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).	  	X	  	
				
	1122(d)(4)(ix)	  	Adjustments to interest rates or rates of return for mortgage loans with variable rates are computed based on the related mortgage loan documents.	  	X	  	
				
	1122(d)(4)(x)	  	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s mortgage loan documents, on at least an annual
basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor
within 30 calendar days of full repayment of the related mortgage loans, or such other number of days specified in the transaction agreements.	  	X	  	
				
	1122(d)(4)(xi)	  	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for
such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	  	X	  	\

  

 I-3 

							
	 Servicing
Criteria
	  	Subservicer1	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
	1122(d)(4)(xii)	  	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment
was due to the obligor’s error or omission.	  	X	  	
				
	1122(d)(4)(xiii)	  	Disbursements made on behalf of an obligor are posted within two (2) business days to the obligor’s records maintained by the servicer, or such other number of days specified in the
transaction agreements.	  	X	  	
				
	1122(d)(4)(xiv)	  	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	  	X	  	
				
	1122(d)(4)(xv)	  	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	  		  	

  

 I-4 

 EXHIBIT J 
 FORM OF ANNUAL CERTIFICATION 
  

	 	Re:	The [    ] agreement dated as of [                ],
200[        ] (the “Agreement”), among [IDENTIFY PARTIES] 

 I,
                                        
                                    , the
                                        
                                        
                 of [NAME OF COMPANY] (the “Company”), certify to [the Purchaser], [the Depositor], and the [Master Servicer] [Securities Administrator]
[Trustee], and their officers, with the knowledge and intent that they will rely upon this certification, that: 
 1. I have
reviewed the servicer compliance statement of the Company provided in accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the report on assessment of the Company’s compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of Regulation
AB (the “Servicing Assessment”), the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other information relating to the servicing of the Mortgage Loans by the Company during 200[ ] that were delivered by the Company to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee] pursuant to the Agreement (collectively, the “Company Servicing Information”); 
 2. Based on my knowledge, the Company Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Servicing Information; 
 3. Based on my knowledge, all of the Company Servicing Information required to be provided by the Company under the Agreement has been provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee]; 
 4. I am responsible for reviewing the activities performed by the Company as servicer under the Agreement, and
based on my knowledge and the compliance review conducted in preparing the Compliance Statement and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report, the Company has fulfilled its obligations under
the Agreement in all material respects; and 
 5. The Compliance Statement required to be delivered by the Company pursuant to
the Agreement, and the Servicing Assessment and Attestation Report required to be provided by the Company and by any Subservicer and Subcontractor pursuant to the Agreement, have been provided to the [Depositor] [Master Servicer]. Any material
instances of noncompliance described in such reports have been disclosed to the 

  

 J-1 

 
[Depositor] [Master Servicer]. Any material instance of noncompliance with the Servicing Criteria has been disclosed in such reports. 
  

			
	Date: _____________________________________
		
	 By:
	 	  
	 Name:
	 	
	 Title:
	 	

  

 J-2Subservicing Agreement

 Exhibit 4.6 
 SUBSERVICING AGREEMENT 
 This SUBSERVICING AGREEMENT, dated as of July 1, 2006 (this
“Agreement”), is by and between EMC Mortgage Corporation (the “Servicer”) and People’s Choice Home Loan, Inc., as seller (the “Seller”) and as subservicer (the “Subservicer”). 
 W I T N E S S E T H: 
 WHEREAS,
Schedule I attached hereto and made a part hereof identifies one pool of conventional, first- and second-lien, adjustable- and fixed-rate, fully and dual-amortizing, residential mortgage loans, some of which include a balloon-payment feature
(collectively, the “Mortgage Loans”) conveyed by the Seller to People’s Financial Realty Mortgage Securities Trust, Series 2006-1 (the “Issuing Entity”) pursuant to the terms of a pooling and servicing agreement (the
“Pooling and Servicing Agreement”), dated as of July 1, 2006, by and among the Seller, Wells Fargo Bank, N. A., as master servicer and securities administrator (“Wells Fargo”), the Servicer, the Subservicer and HSBC Bank
USA, National Association, as trustee (the “Trustee”); 
 WHEREAS, the Servicer has agreed, itself or through the Subservicer, to
service the Mortgage Loans under the terms of a servicing agreement (the “Servicing Agreement”), dated as of July 1, 2006, a copy of which is attached hereto as Exhibit A, among the Servicer, the Subservicer, Wells Fargo and
the Trustee; 
 WHEREAS, the Servicing Agreement provides that the Servicer may retain one or more subservicers to perform the servicing
functions with respect to the Mortgage Loans; 
 WHEREAS, the Servicer desires to appoint the Subservicer as its subservicer; 
 WHEREAS, the parties to this Agreement intend that, effective as of the Closing Date, the Mortgage Loans shall be serviced by the Subservicer on behalf
of the Servicer pursuant to the provisions of the Servicing Agreement; 
 NOW THEREFORE, in consideration of the mutual promises herein made
and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
 Section 1.
Definitions. 
 Adjusted Debt: means Debt minus Securitization Debt. 
 Adjusted Tangible Net Worth: means, with respect to the PCFC Companies, as of any date of determination, the excess of the PCFC Companies’
total assets over the PCFC Companies’ total liabilities on such date in accordance with GAAP, plus the sum of (i) the portion of Subordinated Debt not due within one year of such date and (ii) the face amount of the PCFC
Companies’ convertible preferred stock on such date (to the extent not already included in the determination of Adjusted Tangible Net Worth). For purposes of calculating Adjusted Tangible Net Worth, the following shall be excluded from the
calculation of the PCFC Companies’ total assets: (a) the aggregate amount of advances or loans to shareholders, 

 
directors, officers, employees of the PCFC Companies, (b) assets of the PCFC Companies pledged to secure any liabilities not included in the definition
of “Indebtedness,” (c) intangible assets and (d) the aggregate value of any assets that would be deemed by the Department of Housing and Urban Development (or any successor thereto) to be non-acceptable in calculating adjusted
net worth in accordance with the requirements set forth in the “Consolidated Audit Guide for Audits of HUD Programs” as in effect on such date. 
 Aggregate Available Borrowing Capacity: means the sum of the Available Borrowing Capacity under the Financing Facilities. 
 Available Borrowing Capacity: means the excess of the product of Cash Equivalents plus the mortgage loans and other assets eligible for financing under one or more of the Financing Facilities minus margin
requirements on purchased assets under any Financing Facility (“Other Purchased Assets”). For avoidance of doubt, Available Borrowing Capacity plus Other Purchased Assets shall not exceed the value of a Financing Facility. 
 Cash Equivalents: means (a) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of 90 days or less from the date of acquisition and overnight bank deposits of any commercial bank having capital
and surplus in excess of $500,000,000, (c) repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by Standard and Poor’s Ratings Group (“S&P”), F-1 or the equivalent thereof by
Fitch, Inc. (“Fitch”) or P-1 or the equivalent thereof by Moody’s Investors Service, Inc. (“Moody’s”) and in either case maturing within 90 days after the day of acquisition, (e) securities with maturities of 90
days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or Fitch or A by Moody’s, (f) securities with maturities
of 90 days or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds that
invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition. 
 Debt: means, with
respect to any Person at any date, (a) the total liabilities of such entity, determined in accordance with GAAP, and (b) all indebtedness or other obligations of such entity, for borrowed money or for the deferred purchase price of
property or services not included in total liabilities; provided that for the purposes of this calculation, there shall be excluded from Debt, at any date, any liability on such entity’s balance sheet consisting of reserves for loan
repurchases. 
 EMC Servicing Fee: with respect to each Mortgage Loan and any Distribution Date, an amount equal to the product of
(a) the EMC Servicing Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan in respect of such Distribution Date. 
  

 2 

 EMC Servicing Fee Rate: with respect to each Mortgage Loan, 0.03% per annum. 
 Financing Facilities: shall mean all mortgage loan warehousing and repurchase facilities used to finance the origination or acquisition of
mortgage loans. 
 Monthly Period: shall mean each calendar month, provided that the initial Monthly Period hereunder shall
mean the period from (and including) the Closing Date to (and including) the last day of the calendar month thereafter. 
 PCFC:
People’s Choice Financial Corporation or its permitted successors and assigns. 
 PCFC Companies: PCFC and its consolidated
Subsidiaries. 
 PC Subservicing Fee: with respect to each Mortgage Loan and any Distribution Date, an amount equal to the product of
(a) the PC Subservicing Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan in respect of such Distribution Date. 
 PC Subservicing Fee Rate: with respect to each Mortgage Loan, 0.47% per annum. 
 Securitization Debt: means the
outstanding principal amount of any Debt recorded on a PCFC Company’s consolidated financial statements in connection with a PCFC Company’s securitization of assets and with respect to which there is no recourse to a PCFC Company or any
Subsidiary (except other Non-Recourse Subsidiaries) of a PCFC Company except for breaches of typical seller’s representation and warranties made by a PCFC Company or any of its Subsidiaries in connection with the securitization of assets.

 Subservicer Event of Default: has the meaning given such term in Section 4 hereof. 
 Subsidiary: shall mean any corporation, association or other business entity in which more than 50% of the total voting power or shares of stock
entitled to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more of the other Subsidiaries of that Person or a combination thereof. 
 Tangible Net Worth: means with respect to any Person at any date, the excess of the total assets of such Person over the liabilities of such
Person on such date, each to be determined in accordance with GAAP consistent with those applied in the preparation of the financial statements (“Net Worth”) plus any convertible preferred stock so long as such stock does not mature within
one year of the date of such calculation, minus advances or loans to managers, members, shareholders, officers, or employees (“Advances/Loans”), intangible assets (“Intangible Assets”), those other assets that would be deemed by
HUD to be non-acceptable in calculating adjusted net worth in accordance with its requirements in effect as of such date, as such requirements appear in the “Audit Guide for Audit of Approved Non-Supervised Mortgagees” (“HUD
Adjustments”) and other assets deemed unacceptable by Bear Stearns Mortgage Capital Corporation in its sole discretion (“Buyer Adjustments”). 
 Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Servicing Agreement or in the Pooling and Servicing Agreement. 
  

 3 

 Section 2. Subservicing of Mortgage Loans. 
 (a) The Subservicer shall service the Mortgage Loans from and after the Closing Date in accordance with the provisions of the Servicing Agreement and
provide all reports required under the Servicing Agreement, in all cases, in the same manner and subject to the same terms as if the Subservicer were the “Servicer” under the Servicing Agreement. The duties and obligations of the
Subservicer shall include all of the duties and obligations to be fulfilled and performed by the Servicer in the ordinary course of servicing the Mortgage Loans and otherwise, such as, by way of illustration and not limitation, collection of
payments and other recoveries, maintenance of any and all required insurance and fidelity bonds, payment of taxes and insurance premiums, reporting and remitting, all at the time and in the manner prescribed in the Servicing Agreement;
provided, however, that copies of any and all reports, statements and notifications that the Subservicer shall be required to provide or deliver in accordance with the servicing provisions of the Servicing Agreement shall simultaneously
be delivered to the Servicer; and provided, further, that copies of confirmations of any and all payments or remittances that the Subservicer shall be required to pay or remit in accordance with the servicing provisions of the Servicing
Agreement shall be provided to the Servicer. 
 (b) On a monthly basis, the Servicer may (i) verify that the Subservicer’s
reporting and remitting are mathematically accurate and are being performed in accordance with the terms of the Servicing Agreement; (ii) verify that the custodial account reconciliations are being performed according to Uniform Single
Attestation Program for Mortgage Bankers guidelines; (iii) monitor the Delinquency Rate and identify any substantial increases or decreases on a monthly basis and (iv) review the Subservicing Report Card (a sample of which is attached as
Exhibit C hereto), regular reports generated by the Subservicer’s servicing computer system to assess the Subservicer’s performance on the Subservicer Requests and Escalation Notices sent to Master Servicer as referenced in
Section 3.02 of the Pooling and Servicing Agreement. The Servicer shall have the right to request and the Subservicer shall afford the Servicer reasonable access at the Servicer’s expense to any and all reports, information or on-site
visits as the Servicer shall deem necessary to ensure that the Subservicer is servicing the Mortgage Loans in accordance with the terms of the Pooling and Servicing Agreement; provided that any such access shall be afforded only upon two
Business Days prior written notice (or without prior written notice in the event a Subservicer Event of Default shall have occurred and be continuing) and during normal business hours at the office designated by the Subservicer. In addition, the
Subservicer shall cooperate in a commercially reasonable manner with any party exercising its audit rights with respect to the Servicer or the Subservicer provided under the Servicing Agreement or the Pooling and Servicing Agreement. 
 (c) In addition to any reports required to be provided to the Master Servicer under the terms of the Servicing Agreement, the Subservicer shall provide
the Servicer, on the date of delivery of such reports as provided above, with loan-level information, including, at a minimum, current delinquency information, outstanding Monthly Advances and Servicing Advances, balances and liquidation information
(including type of liquidation – prepayment, REO sale, discounted payoff, etc. – losses, loss severity, etc., as applicable) and with the information prescribed in Exhibit B hereto. In addition, upon reasonable request of the
Servicer, the Subservicer shall provide such additional reports and information that are necessary for the 

  

 4 

 
Servicer to perform its functions hereunder and under the Servicing Agreement and the Pooling and Servicing Agreement. 
 Section 3. Representations and Warranties of the Subservicer and the Servicer. 
 (a) The Subservicer represents and warrants to the Servicer that, as of the Closing Date: 
 (i) the Subservicer is a corporation duly organized, validly existing and in good standing under the laws of the State of Wyoming; 
 (ii) the Subservicer has full corporate power to own its property, to carry on its business as presently conducted and to enter into and perform its obligations under this Agreement; 
 (iii) the execution and delivery by the Subservicer of this Agreement has been duly authorized by all necessary corporate action on the
part of the Subservicer; and neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, government rule, regulation, judgment, decree or order binding on the Subservicer or its properties or the certificate of incorporation or by-laws of the Subservicer, except those conflicts, breaches
or defaults that would not reasonably be expected to have a material adverse effect on the Subservicer’s ability to enter into this Agreement and to consummate the transactions contemplated hereby; 
 (iv) the execution, delivery and performance by the Subservicer of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or governmental authority or agency, except those consents, approvals, notices,
registrations or other actions as have already been obtained, given or made and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed; 
 (v) this Agreement has been duly executed and delivered by the Subservicer, and, assuming due authorization, execution and delivery by the
Servicer, constitutes a valid and binding obligation of the Subservicer enforceable against it in accordance with its terms (subject to applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of
creditors generally); 
 (vi) there are no actions, litigation, suits or proceedings pending or threatened against the
Subservicer before or by any court, administrative agency, arbitrator or government body (A) with respect to any of the transactions contemplated by this Agreement or (B) with respect to any other matter that, in the judgment of the
Subservicer, if determined adversely to the Subservicer, would reasonably be expected to materially and adversely affect the Subservicer’s ability to perform its obligations under this Agreement; and the Subservicer is not in default with
respect to any order of any 

  

 5 

 
court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement;

 (vii) the Subservicer’s chief executive office and principal place of business are located in the County of Orange in
the State of California; 
 (viii) the Subservicer does not believe, nor does it have any reason or cause to believe, that it
cannot perform each and every covenant contained in this Agreement; 
 (ix) the Subservicer has the facilities, procedures and
experienced personnel necessary for the sound servicing of mortgage loans of the same type as the Mortgage Loans. The Subservicer is in good standing to service mortgage loans, and no event has occurred, including a change in insurance coverage,
which would make the Subservicer unable to service the Mortgage Loans; 
 (x) the Subservicer has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type
conducted by the Subservicer, and in any event the Subservicer is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of the related Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the terms of this Agreement; 
 (xi) the consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Subservicer, who is in the business of servicing loans, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Subservicer pursuant to this Agreement are not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable jurisdiction; and 
 (xii) any reports, statements,
notifications or certificates provided by the Subservicer to the Servicer pursuant to this Agreement will be accurate in all material respects. 
 (b) The Servicer represents and warrants to the Subservicer that, as of the Closing Date: 
 (i) the Servicer is a
corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Servicer has all licenses necessary to carry out its business as now being conducted or is otherwise exempt under applicable law from such
licensing or qualification or is otherwise not required under applicable law to effect such licensing or qualification; 
 (ii) the Servicer has the full power and authority and legal right to enter into and consummate, all transactions contemplated by this Agreement and to conduct its business as presently conducted. The Servicer has duly authorized the
execution, delivery and performance of this Agreement and any agreements contemplated hereby, has duly executed and delivered this Agreement, and any agreements contemplated 

  

 6 

 
hereby, and this Agreement, assuming due authorization, execution and delivery by the Subservicer, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against it in accordance with its terms and all requisite corporate action has been taken by the Servicer to make this Agreement and all agreements contemplated hereby valid and binding upon the Servicer in accordance with
their terms; 
 (iii) neither the execution and delivery of this Agreement by the Servicer, nor the consummation of the
transactions contemplated hereby, or the performance of or compliance with the terms and conditions of this Agreement will conflict with any of the terms, conditions or provisions of the Servicer’s certificate of incorporation or by-laws, or
constitute a default under or result in a breach or acceleration of, any material contract, agreement or other instrument to which the Servicer is a party or that may be applicable to the Servicer or its assets, or result in the material violation
of any law, rule, regulation, order, judgment or decree to which the Servicer or its properties are subject; 
 (iv) the
Servicer is not in violation of, and the execution and delivery of this Agreement by the Servicer and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court
or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over the Servicer or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or
otherwise) or the operation of the Servicer or its assets or might have consequences that would materially and adversely affect the performance of its obligations and duties hereunder; 
 (v) the Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement; and 
 (vi) no consent, approval, authorization or order of any court or governmental agency or
body is required for the execution, delivery and performance by the Servicer of, or compliance by the Servicer with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the date hereof. 
 Section 4. Events of Default. 
 (a) “Subservicer Event of Default” means any one of the following events: 
 (i) any failure by the Subservicer to make any payment or remittance required under the Servicing Agreement by the date such payment or
remittance was required to be made, which failure shall continue unremedied for two Business Days; 
 (ii) the filing of any
certified class action lawsuit naming the Subservicer, or an affiliated entity, as defendant, alleging a violation of any (A) state or federal anti-predatory lending law or other consumer protection law, (B) state or federal unfair or
deceptive trade practices act, (C) state law relating to servicing, including but not limited to, collections, fee charges, or foreclosure practices or (D) law relating to fraud in the 

  

 7 

 
origination of mortgage loans, which action is reasonably likely to result in a judgment for at least $500,000; 
 (iii) any material state or federal regulatory agency investigation naming the Subservicer, or an affiliated entity, as defendant,
relating to mortgage loan origination or servicing, is commenced on or after the Closing Date, which investigation is reasonably likely to result in a material impairment of PCFC’s or the Subservicer’s business operations; 
 (iv) any failure on the part of the Subservicer to observe or perform in any material respect any other of the covenants or agreements on
the part of the Subservicer set forth in this Agreement or the Servicing Agreement (other than a failure to make any payment or remittance required hereunder or thereunder) by the Subservicer, which failure continues unremedied for a period of
15 days, except in the case of a failure to observe or perform under Section 8 of this Agreement (for which no notice shall be required and no cure period shall exist), after the date on which written notice of such failure, requiring the same
to be remedied, is given to the Subservicer by the Servicer, the Master Servicer or the Trustee; 
 (v) a decree or order of a
court or agency or supervisory authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, entered against the Subservicer and such decree or order remained in force undischarged or unstayed for a period of 60 days; 
 (vi) any consent by the Subservicer to the appointment of a conservator, receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Subservicer or of or relating to all or substantially all of its property; 
 (vii) any admission by the Subservicer in writing of its inability to pay its debts generally as they become due, filing of a petition to
take advantage of any applicable insolvency or reorganization statute, making of an assignment for the benefit of its creditors, or voluntarily suspending payment of its obligations; 
 (viii) the Subservicer ceases to be (a) licensed to service first- and/or second-lien residential mortgage loans (as applicable) in
any jurisdiction in which a Mortgaged Property is located and such licensing is required, and (b) qualified to transact business in any jurisdiction where it is currently so qualified, but only to the extent such non-qualification materially
and adversely affects the Subservicer’s ability to perform its obligations hereunder; 
  

 8 

 (ix) the three-month rolling average of the Delinquency Rate for the three prior Due
Periods equals or exceeds 37.47% of the related Senior Enhancement Percentage or if the cumulative realized losses exceeds the applicable percentage of the Cut-off Date Principal Balance on the respective Distribution Date as specified below:

  

			
	 Distribution Date
	  	 Percentage

	25 – 36	  	1.85% for the first month, plus an additional 1/12th of
2.35% for each month thereafter
		
	37 – 48	  	4.20% for the first month, plus an additional 1/12th of
2.00% for each month thereafter
		
	49 – 60	  	6.20% for the first month, plus an additional 1/12th of
2.10% for each month thereafter
		
	61 – 72	  	8.30% for the first month, plus an additional 1/12th of
0.80% for each month thereafter
		
	73 +	  	9.10%

 (x) the Adjusted Tangible Net Worth of PCFC and its Subsidiaries, on a
consolidated basis, at any time is less than two hundred million ($200,000,000) dollars; 
 (xi) PCFC and its Subsidiaries, on
a consolidated basis, do not maintain at least $15,000,000 of Cash Equivalents and Aggregate Available Borrowing Capacity; 
 (xii) PCFC permits the ratio of Adjusted Debt to Tangible Net Worth of PCFC and its Subsidiaries, on a consolidated basis, as of the last day of any Monthly Period to be greater than 16:1; and 
 (xiii) PCFC and its Subsidiaries, on a consolidated basis, do not maintain their right to borrow, on a committed basis, at least
$500,000,000 under the Financing Facilities. 
 (b) In the event that the Subservicer fails to make any payment or remittance required under
the Servicing Agreement by the date such payment or remittance was required to be made, such payment or remittance is unremedied for two Business Days and the Servicer or Master Servicer makes such payment or remittance, the Subservicer shall
promptly pay to the Servicer or the Master Servicer, as applicable, the amount of such payment or remittance plus interest thereon at a per annum rate equal to the prime rate (as published in The Wall Street Journal) on the date of such
default plus 3.0%, accruing from the date on which such payment or remittance was due to but not including the date of payment of such amount by the Subservicer. 
 Section 5. Subservicing Compensation; Reimbursement. 
 As compensation for servicing the Mortgage Loans subject to this
Agreement, the Subservicer, subject to the provisions of the Servicing Agreement, shall be entitled to retain from collections on the related Mortgage Loans or withdraw from the Custodial Account pursuant to the Servicing Agreement an amount equal
to the PC Subservicing Fee for each Mortgage Loan; provided that the aggregate PC Subservicing Fees with respect to any Distribution Date shall be reduced (up to a maximum equal to the aggregate Servicing Fees for such Distribution Date) by
the amount of any Compensating Interest paid by the Subservicer with respect to such Distribution Date. The Subservicer shall be entitled to reimbursement (including with respect to Monthly Advances and Servicing Advances) to the same extent as the
Servicer is entitled under 

  

 9 

 
the Servicing Agreement. The Servicer shall be entitled to receive the EMC Servicing Fee pursuant to the terms of the Servicing Agreement and the Pooling and
Servicing Agreement. 
 Additional subservicing compensation in the form of (a) all income and gain net of any losses realized from
Permitted Investments and (b) assumption fees, late-payment charges, all ancillary income and other receipts not required to be deposited to the Custodial Account pursuant to Section 4.04 of the Servicing Agreement (or otherwise remitted
to any other account or party pursuant to the provisions of the Servicing Agreement) shall be retained by the Subservicer. 
 The Subservicer
shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder to the extent such expenses do not constitute Monthly Advances, Servicing Advances or Nonrecoverable Advances and shall not be entitled to
reimbursement therefor except as specifically provided for herein and in the Servicing Agreement. 
 Section 6. Custodial Account. 
 The Subservicer shall establish and maintain a Custodial Account in accordance with the provisions of Section 4.04 of the Servicing Agreement.

 Section 7. Escrow Account. 
 The
Subservicer shall establish and maintain one or more Escrow Accounts in accordance with the provisions of Section 4.06 of the Servicing Agreement. 
 Section 8. Compliance with Regulation AB. 
 The Subservicer hereby agrees to cooperate with the Servicer with respect to all
provisions applicable to the Subservicer pursuant to the Servicing Agreement, including reports and items relating to the “Applicable Servicing Criteria” specified on Exhibit I thereto and attached as Exhibit D hereto.

 Section 9. Indemnification. 
 The
Subservicer agrees to indemnify and hold harmless the Servicer and each officer, director, agent, employee or affiliate of the Servicer from any liability, claim, loss or damage (including, without limitation, any reasonable legal fees, judgments or
expenses relating to such liability, claim, loss or damage) to the Servicer or any such other Person directly or indirectly resulting from (a) the Subservicer’s failure to observe and perform any or all of the Subservicer’s duties,
obligations, covenants and agreements contained in this Agreement; (b) a breach or alleged breach of any representation or warranty of the Subservicer set forth in this Agreement; provided that any such alleged breach results in a
material liability, claim, loss or damage (including, without limitation, any reasonable legal fees, judgments or expenses relating to such liability, claim, loss or damage) to the Servicer; (c) the Subservicer’s failure to service the
Mortgage Loans in strict compliance with the terms of the Servicing Agreement; or (d) the Subservicer’s failure to promptly transfer the Mortgage Loans and related Mortgage Files to the Servicer or a successor subservicer in accordance
with the Servicer’s or successor subservicer’s 

  

 10 

 
reasonable servicing transfer procedures upon termination of the Subservicer hereunder. The Subservicer immediately shall notify the Servicer if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans. 
 The Servicer and the Subservicer hereby agree that the
provisions of this Section 9 shall survive the termination of this Agreement. 
 Section 10. Assignment. 
 The Subservicer shall not assign its right to servicing compensation hereunder, to sell or otherwise dispose of all or substantially all of its property
or assets or to assign this Agreement or the servicing responsibilities hereunder or to delegate its duties hereunder or any portion thereof without the prior written consent of the Servicer; provided that the Subservicer may enter into an
Advance Facility without consent pursuant to Section 4.17 of the Servicing Agreement, provided that the terms of such facility do not (a) increase the duties, functions or responsibilities of the Servicer hereunder, under the
Servicing Agreement, the Pooling and Servicing Agreement or any documents related hereto or thereto or (b) derogate from any rights of the Servicer hereunder, under the Servicing Agreement, the Pooling and Servicing Agreement or any documents
related hereto or thereto. The Subservicer shall not appoint a successor subservicer without the prior written consent of the Servicer. In each case, such consent cannot be unreasonably withheld. No appointment of a successor subservicer hereunder
shall be effective until such successor shall have assumed the Subservicer’s responsibilities, duties, liabilities and obligations hereunder. 
 Section
11. Limitation on Resignation of Subservicer. 
 The Subservicer shall not resign from the obligations and duties hereby imposed on it
except upon determination that its duties hereunder are no longer permissible under applicable law. Any such determination permitting the resignation of the Subservicer shall be evidenced by an Opinion of Counsel to such effect delivered to the
Servicer. No such resignation shall become effective until the Servicer or a successor subservicer shall have assumed the Subservicer’s responsibilities, duties, liabilities and obligations hereunder. 
 Section 12. Termination. 
 The Servicer shall have
the right, but not the obligation, to terminate all the rights and obligations of the Subservicer under this Agreement and in and to the servicing contract established hereby and the proceeds thereof if a Subservicer Event of Default shall have
occurred. In addition, this Agreement shall terminate upon (a) the mutual agreement of the Servicer and Subservicer (which agreement shall be in writing), (b) the resignation of the Subservicer pursuant to Section 11 hereof,
(c) upon the termination of the Trust pursuant to the provisions of the Pooling and Servicing Agreement, in which case the Servicer’s role as servicer of the Mortgage Loans shall terminate and the Subservicer shall be the servicer of the
Mortgage Loans or (d) the occurrence of an Event of Default (as defined in the Pooling and Servicing Agreement); provided, however, that upon termination of EMC as Servicer under the Servicing Agreement, the obligations of EMC under this
Subservicing Agreement shall terminate, and shall be the sole responsibility of any successor Servicer. 
  

 11 

 In the event that the Subservicer is terminated hereunder due to the occurrence of a Subservicer Event of
Default, the Subservicer shall transfer servicing with respect to the Mortgage Loans to the Servicer or any successor subservicer in accordance with the Servicer’s or such successor subservicer’s servicing transfer procedures. The
terminated Subservicer shall be entitled to payment for unpaid Subservicing Fees and reimbursement for unreimbursed Monthly Advances and Servicing Advances by the Servicer or successor subservicer in accordance with the provisions of
Section 4.05 of the Servicing Agreement; provided, however, that the terminated Subservicer shall provide the Servicer with documentation acceptable to the Servicer evidencing the Subservicer’s right to reimbursement for any such
outstanding amounts. The terminated Subservicer shall be responsible for all costs, fees and expenses incurred by the Servicer, the terminated Subservicer and any successor subservicer in connection with any such servicing transfer. The appointment
of any successor to the Subservicer as subservicer shall not be effective unless and until the Securities Administrator and the Trustee shall have received a letter from each Rating Agency confirming that the appointment of such successor will not
result in the withdrawal, reduction or qualification of any rating then assigned by such Rating Agency to any Class of the Certificates. 
 Section 13.
Notices. 
 All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or transmitted by telecopier, telex or telegraph and confirmed by a similar mailed writing, as follows: 
  

	 	(a)	If to the Servicer: 

 EMC Mortgage Corporation 

2780 Lake Vista Drive 
 Lewisville, Texas
75067 
 Attn: Jenna Kemp 
 Telecopy No.: (972) 831-2554 
  

	 	(b)	If to the Subservicer: 

 People’s Choice Home Loan,
Inc. 
 7515 Irvine Center Drive 
 Irvine, California 92618 
 Attention: Irwin Gubman, Esq. 
 Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice. 
 Section 14. Severability of Provisions. 
 Any part, provision, representation or warranty of this Agreement that is prohibited or is held to be void or unenforceable shall be ineffective to the
extent of such prohibition or 

  

 12 

 
unenforceability without invalidating the remaining provisions hereof. Any part, provision, representation or warranty of this Agreement that is prohibited
or unenforceable or is held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction as to any Mortgage Loan shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of
law that prohibits or renders void or unenforceable any provision hereof. 
 Section 15. GOVERNING LAW. 
 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 Section 16. Miscellaneous. 
 This Agreement shall be executed by each party (a) in one or more
fully executed copies, each of which shall constitute a fully executed original Agreement, and/or (b) in counterparts having one or more original signatures, and all such counterparts containing the original signatures of all of the parties
hereto taken together shall constitute a fully executed original Agreement and/or (c) by delivery of one or more original signed signature pages to the other parties hereto (i) by mail or courier, and/or (ii) by electronic
transmission, including without limitation by telecopier, facsimile or email of a scanned image (“Electronic Transmission”), each of which as received shall constitute for all purposes an executed original signature page of such party. The
Servicer may deliver a copy of this Agreement, fully executed as provided herein, to each other party hereto by mail and/or courier and/or Electronic Transmission, and such copy as so delivered shall constitute a fully executed original Agreement
superseding any prior form of the Agreement that differs therefrom in any respect. 
 This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns. 
 This Agreement may not be assigned, pledged or hypothecated
by any party without the written consent of each other party to this Agreement. 
 This Agreement supersedes all prior agreements and
understandings relating to the subject matter hereof. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof. 
  

 13 

 Section 17. Relationship with Master Servicer. 
 The Subservicer acknowledges that Wells Fargo has been appointed as the master servicer of the Mortgage Loans pursuant to the Pooling and Servicing
Agreement and therefor has the right to enforce all obligations of the Servicer and the Subservicer, as they relate to the Mortgage Loans, under the Pooling and Servicing Agreement. The Subservicer further acknowledges that pursuant to its role as
subservicer under this Agreement, Wells Fargo shall have the right to make inquiries into the servicing of the Mortgage Loans by the Subservicer and to conduct inspections of the Subservicer, its servicing facilities and personnel, and the
Subservicer agrees to cooperate and communicate directly with, and to provide such information as may be reasonably requested by, Wells Fargo, necessary to resolve any questions, issues or concerns regarding the servicing and administration of the
Mortgage Loans by the Subservicer. 
 Section 18. Rights of the Master Servicer. 
 Wells Fargo, in its capacity as master servicer under the Pooling and Servicing Agreement, is an intended third-party beneficiary of Section 17 of
this Agreement and shall have the right to enforce the obligations of the parties under such Section, including the right to enforce the obligations of the Subservicer hereunder to the extent of the obligations of the Servicer under the Pooling and
Servicing Agreement. 
 Section 19. Servicer to Cooperate. 
 If the conditions set forth in Section 3.18 of the Pooling and Servicing Agreement are satisfied, the Servicer shall cooperate and undertake all functions necessary to effectuate a servicing transfer to the
Subservicer. 
 Section 20. Guaranty. 
 Effective upon fulfillment of the covenants set forth in the second paragraph of this Section 20, PCFC hereby unconditionally and irrevocably guarantees the full and punctual performance of any obligation of, and the full and punctual
payment of any amount payable by, the Subservicer under this Agreement, the Servicing Agreement or the Pooling and Servicing Agreement. Upon failure by the Subservicer to perform fully any such obligation or pay fully any such amount, PCFC shall
forthwith immediately upon demand perform or cause to be performed any such obligation not performed or pay or cause to be paid any such amount not so paid, in each case at the place, in the manner and at the time specified in the applicable
agreement. PCFC shall cause the Subservicer to be at all times in compliance with the representations and warranties made by the Subservicer in Section 3(a) of this Agreement. 
 If the guaranty provided by PCFC pursuant to this Section 20 is prohibited under the terms of any lending facility to which a PCFC Company is a
party, a waiver or approval from the lender under any such lending facility shall be obtained (and a copy provided to the Servicer) within 30 days after the Closing Date. Any failure to obtain any required waivers or approvals shall constitute a
Subservicer Event of Default under Section 4(a)(iv) of this agreement. The Subservicer shall notify the Servicer when all required waivers or approvals have been obtained. 
  

 14 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their
respective officers thereunto duly authorized as of the date first above written. 
  

			
	 EMC MORTGAGE CORPORATION,
 as Servicer

		
	By:	 	 /s/ Sue Stepanek

	 Name:
	 	 Sue Stepanek

	 Title:
	 	 Executive Vice President

	
	 PEOPLE’S CHOICE HOME LOAN, INC.,
 as Seller

		
	By:	 	 /s/ Brad Plantiko

	 Name:
	 	 Brad Plantiko

	 Title:
	 	 Executive Vice President

	
	 PEOPLE’S CHOICE HOME LOAN, INC.,
 as Subservicer

		
	By:	 	 /s/ Irwin Gubman

	 Name:
	 	 Irwin Gubman

	 Title:
	 	 Secretary and General Counsel

  

			
	 Agreed and accepted as to Section 20:

	
	PEOPLE’S CHOICE FINANCIAL CORPORATION
		
	By:	 	 /s/ Brad Plantiko

	 Name:
	 	 Brad Plantiko

	 Title:
	 	 Executive Vice President

		
	By:	 	 /s/ Irwin Gubman

	 Name:
	 	 Irwin Gubman

	 Title:
	 	 Secretary and General Counsel

 Signature Page to Subservicing Agreement 

 SCHEDULE I 
 MORTGAGE LOAN SCHEDULE 
  

 I-1 

 EXHIBIT A 
 SERVICING AGREEMENT 
  

 A-1 

 EXHIBIT B 
 ADDITIONAL SUBSERVICING REPORTS 
 Additional Reports to be sent with copy of Master Servicer Reports 
  

	 	•	 	Reconciled Test of Pool to Security (Collateral Test) 

  

	 	•	 	Reconciled Test of Minimum Cash Required 

 Reports due to Servicer by the
25th day of the month, or next business day, immediately following the month of distribution: 
  

	 	•	 	Custodial Account and Escrow Account bank statements 

  

	 	•	 	Custodial Account and Escrow Account bank reconciliations 

  

 B-1 

 EXHIBIT C 
 SAMPLE SUBSERVICING REPORT CARD 
  

															
	Master Servicer Approval
Performance Matrix	  		  	SAMPLE	  		  	Subservicer Report Card
								
	Loan No.	  	Borrower
Last	  	Proposed
Action	  	Date
Submitted	  	Submission
Approved,
Denied, Modified
(A/D/M)	  	Master
Servicer
Response
Date	  	Re-submission
approved
(if applicable)	  	 Comments

	7777777	  	Tester	  	short sale	  	7/13/2005	  	A	  	7/15/2005	  		  	Due to close 7-28-05
								
	7777777	  	Tester	  	forbearance
plan 12
months	  	7/13/2005	  	D	  	7/15/2005	  	7/18/2005	  	Borrower income did not support plan, extended to 24 months

  

 C-1 

 EXHIBIT D 
 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE 
 The assessment of compliance to be
delivered by [the Servicer] [Name of Subservicer] shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”: 
  

							
	 Servicing
Criteria
	  	Subservicer	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
		  	General Servicing Considerations	  		  	
				
	1122(d)(1)(i)	  	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	  	X	  	X
				
	1122(d)(1)(ii)	  	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing
activities.	  		  	X
				
	1122(d)(1)(iii)	  	Any requirements in the transaction agreements to maintain a back-up servicer for the mortgage loans are maintained.	  		  	
				
	1122(d)(1)(iv)	  	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction agreements.	  	X	  	X
				
		  	Cash Collection and Administration	  		  	
				
	1122(d)(2)(i)	  	Payments on mortgage loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number
of days specified in the transaction agreements.	  	X	  	
				
	1122(d)(2)(ii)	  	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	  	X	  	
				
	1122(d)(2)(iii)	  	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in
the transaction agreements.	  	X	  	
				
	1122(d)(2)(iv)	  	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to
commingling of cash) as set forth in the transaction agreements.	  	X	  	
				
	1122(d)(2)(v)	  	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured
depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	  	X	  	
				
	1122(d)(2)(vi)	  	Unissued checks are safeguarded so as to prevent unauthorized access.	  	X	  	

  

 D-1 

							
	 Servicing
Criteria
	  	Subservicer	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
				
	1122(d)(2)(vii)	  	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared
the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	  	X	  	
				
		  	Investor Remittances and Reporting	  		  	
				
	1122(d)(3)(i)	  	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such
reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the
Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of mortgage loans serviced by the Servicer.	  	X	  	
				
	1122(d)(3)(ii)	  	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	  	X	  	
				
	1122(d)(3)(iii)	  	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction
agreements.	  	X	  	
				
	1122(d)(3)(iv)	  	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	  	X	  	
				
		  	Pool Asset Administration	  		  	
				
	1122(d)(4)(i)	  	Collateral or security on mortgage loans is maintained as required by the transaction agreements or related mortgage loan documents.	  	X	  	
				
	1122(d)(4)(ii)	  	Mortgage loan and related documents are safeguarded as required by the transaction agreements.	  	X	  	
				
	1122(d)(4)(iii)	  	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	  	X	  	
				
	1122(d)(4)(iv)	  	Payments on mortgage loans, including any payoffs, made in accordance with the related mortgage loan documents are posted to the Servicer’s obligor records maintained no more than two
business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related mortgage loan documents.	  	X	  	

  

 2 

							
	 Servicing
Criteria
	  	Subservicer	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
				
	1122(d)(4)(v)	  	The Servicer’s records regarding the mortgage loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	  	X	  	
				
	1122(d)(4)(vi)	  	Changes with respect to the terms or status of an obligor’s mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance
with the transaction agreements and related pool asset documents.	  	X	  	
				
	1122(d)(4)(vii)	  	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements established by the transaction agreements.	  	X	  	
				
	1122(d)(4)(viii)	  	Records documenting collection efforts are maintained during the period a mortgage loan is delinquent in accordance with the transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).	  	X	  	
				
	1122(d)(4)(ix)	  	Adjustments to interest rates or rates of return for mortgage loans with variable rates are computed based on the related mortgage loan documents.	  	X	  	
				
	1122(d)(4)(x)	  	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s mortgage loan documents, on at least an annual
basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable mortgage loan documents and state laws; and (C) such funds are returned to the obligor
within 30 calendar days of full repayment of the related mortgage loans, or such other number of days specified in the transaction agreements.	  	X	  	
				
	1122(d)(4)(xi)	  	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for
such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	  	X	  	
				
	1122(d)(4)(xii)	  	Any late-payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment
was due to the obligor’s error or omission.	  	X	  	
				
	1122(d)(4)(xiii)	  	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the
transaction agreements.	  	X	  	

  

 3 

							
	 Servicing
Criteria
	  	Subservicer	  	Servicer
	 Reference
	  	 Criteria
	  	 	  	 
				
	1122(d)(4)(xiv)	  	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	  	X	  	
				
	1122(d)(4)(xv)	  	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	  		  	

  

 4

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